Pricing Strategies During COVID-19
The COVID-19 pandemic has required a new level of resilience, creativity and a generous amount of grit.
As the number of Americans infected with the coronavirus continues to rise, the U.S. unemployment rate has increased as well — putting the economy in its most vulnerable state since the 2009 recession. With the reduced income for millions of Americans, memberships, subscriptions and other recreational expenses have had to take a back seat, forcing associations to rethink pricing models for events, annual dues and other offerings that normally keep members engaged.
Associations offering some resources for free can be beneficial. Sheri Jacobs, FASAE, CAE, president and CEO of Avenue M Group, Chicago, recommended to one of her association clients to make their educational resources free. “While organizations will undoubtedly take a financial hit over the next year, they may be more likely to retain their members and the lifetime value of membership if they pay attention to the overall value proposition of being a member.”
Tweed Thornton, a consultant and CEO of Four Star Initiatives in Chicago, says that pandemic-related staff cuts and budget freezes initially led to associations offering all sorts of resources for free.
“There were a bevy of free webinars that came out at the very beginning of the pandemic, and everyone was trying to figure out: ‘How do we get through this?’” Thornton says. Most people thought that this virus was going to be temporary, so offering free resources was only going to last for a few months. As the pandemic continued, associations realized the need to charge for events, including virtual offerings.
“Associations soon realized while the format of their flagship events might’ve changed, they still had the ability to put together top-quality conversations that not only appeal to their audience but continue to drive best industry practices,” Thornton says. “You’re still creating great content in great conversations that are valuable to members, and that work should be paid for.”
Prioritizing Value Above Perceived Costs
But just what should an event cost? That’s something Warren Hoffman, executive director of the Association for Jewish Studies (AJS) in New York City, grappled with recently, according to a column he wrote for ASAE.
AJS typically hosts an annual in-person conference with more than 1,200 attendees, with the association offering a tiered pricing structure to help make the event equitable to different members. With 2020’s December conference shifting to a virtual event, the association initially had conversations about making the event free, especially knowing that some grad students and faculty members wouldn’t be able to afford the conference. There were also calls to offer a flat rate of $100, $50 or even $20.
“While this would have made the conference affordable, no one knew how many of our members were actually in a position where they couldn’t pay registration fees,” Hoffman wrote in the column. “Plus, lowering our conference registration rates to a token amount would have meant a deficit of at least $100,000 at a time when our organization, like many others, was facing financial challenges.”
Other variables in offering a free or reduced-rate conference impacted AJS’ decision. Giving away content for free isn’t sustainable long term, plus it can lower the perceived value of the product you’re offering.
In a June 2020 LinkedIn article, Alex Greco, MA, Manufacturing Policy and Government Relations Director at Canadian Manufacturers and Exporters, suggested three ways associations could thrive in this economy. The article’s main insight? Associations must continue to improve the effectiveness in which they communicate with their members.
AJS prioritized its communication by sending a pricing strategy FAQ to all members. Part of that communication included explaining to members that putting on a large virtual conference wasn’t just a matter of expenses for the few days the conference occurred — but instead requires paying staff year-round to pull off such a big event.
After deliberation, AJS shifted the narrative to focus not on what the event costs — but on the value the event creates. AJS developed a task force of staff, volunteers and members who met regularly for six months leading up to the event to rethink the conference. They focused on the value of recreating beloved conference events like trivia and movie nights while also looking at new opportunities presented by a digital experience.
By adding all this value, and making a case to members that the new digital event offered all this value, Hoffman felt comfortable pricing the event at the organization’s normal tiered structure.
Hoffman wrote: “But what about members who really were affected by the pandemic and were in a state of financial precarity? We turned to our funding for travel grants, and with our funders’ help, we repurposed this money for conference subvention grants. The result: Anyone who wanted a subvention, regardless of their income level, received support. Recipients were grateful for the support, and it meant that the AJS was able to preserve our bottom line at the same time.”
AJS ultimately had more registrants for 2020 than in 2019. His big takeaway: “While it’s important to make sure everyone who wants to participate in your conferences can, it doesn’t mean you have to sacrifice organizational financial stability at the same time.”
Talk It Through
Liz Lang, marketing director for the American Planning Association (APA), says that her association has been especially communicative during this time.
“We’re putting out messaging every single day — whether it’s content that’s longer, an email, blog post or social media post — and asking ourselves how we can make it relevant to people today,” Lang says. Over the last several months, the APA has worked to encourage its audience, which is made up of mostly planners, that obtaining the American Institute of Certified Planners credential is still beneficial to taking their career to the next level. In general, one of the goals is to help members think of the association’s products and services as needs — not just wants or something that’s nice to have.
Last spring, APA, like AJS and many others, quickly adapted to stay-at-home policies and moved its popular in-person conferences virtual. Lang says that this approach created new engagement opportunities for those who typically don’t attend their in-person events. A lower price point also helped attract additional attendees.
“We just we tested things, we tried things; we had a ton of people who attended our virtual conference perhaps prior to COVID-19 who wouldn’t have been able to afford to attend an in-person experience,” Lang says.
Of course, some of the regular attendees of APA’s in-person conferences didn’t participate in the online version, which was to be expected. But the organization is still interested in learning how they can bring them back. Being agile and testing different pricing models has helped.
Historically, APA has always had an early-bird pricing option for its conferences. APA has continued to test that model with its upcoming National Planning Conference. Additionally, they’ve also tested a tiered pricing structure, which allows attendees to choose the best package. “There are regular and premium prices — the regular one that gives access to the entire conference, and then a premium price offers access to the conference and additional professional development perks,” Lang says. “This structure lets people make the choice and pay for what they need.”
Ultimately, Lang says, it’s about listening to your members. “What they’re saying — the good, the bad, the in-between — these insights are the foundation of new value,” Lang says. “If you can look at listening as an action, then you can start to really tap into what members need now and find solutions that are the things that they might pay for.”
This video was created by FORUM Magazine to answer your questions about non-dues revenue diversification….
Attracting and retaining workers isn’t all about money right now. Flexibility, workplace culture and other...