The Will to Change
In the chaotic year that was 2020, associations could be forgiven for not looking too far ahead. After all, the pandemic spurred on new crises and urgent matters seemingly every day. But with a new year and a full 12-months’ worth of experience in responding to the coronavirus’ novel challenges, association leaders have an opportunity to look to the future once again.
Among the many issues on the horizon, few are more pressing than non-dues revenue generation. The outlook is thorny to say the least: The lack of in-person events crushed revenues. Plus, many in the business community — and subsequent association sponsors — have been hit hard, in some cases withdrawing sponsorships with associations. That’s all in addition to the other challenges that existed before the pandemic struck.
Murky? Maybe. But there’s great news, too: There is no shortage of opportunities for association leaders to diversify and boost non-dues revenue streams. “It’s not so much about what to do or how to do it, it’s the conviction,” says Don Neal, founder and CEO of 360 Live Media. “It’s the will.”
Some hesitancy and risk aversion is certainly understandable. “For organizations that are really under significant pressure, they don’t have reserves, they don’t have a financial war chest, they didn’t get insurance payments,” Neal says. These are the same associations that may have had to furlough employees, reduce salaries or lay off people altogether.
At the same time, Neal says leaders of these associations are also the people most ready to do what’s necessary to capitalize on the moment. “There are two catalysts for change: inspiration and desperation,” Neal says. “I think those who are most desperate are the ones most willing to put operational apparatuses in place to adopt new processes.”
Diversifying revenue streams and exploring new options are key. For a long time, associations have been reliant on the familiar mix of events, publications and membership dues. “Now, with all three under enormous pressure, it’s scary,” Neal says. “What to do and how to do it — while it’s sort of out there for the taking — the ability for leaders to see how it can be customized, tailored and applied in their organization isn’t always obvious.”
The options include revisiting and enlivening partner relationships, diving into more advanced virtual meetings and taking advantage of the digital landscape. In general, though, it will take leadership from on high to drive long-term solutions.
“I don’t know that there are short-term solutions for non-dues revenue,” says David Frankil. Frankil was president of the CrossState Credit Union Association Solutions Corporation before becoming an independent consultant helping associations and vendors maximize non-dues revenue program productivity last year. “There’s no magic bullet, there’s no, ‘oh, my gosh, I just stumbled over a $100,000 check that I didn’t see before.’ A long-term mindset is what drives value.”
There’s optimism lurking in that long-term mindset, Frankil says. “When you start thinking outside the box for non-dues revenue programs, the sky’s the limit.”
In Frankil’s opinion, one of the most fundamental mistakes that associations make is taking vendor relationships for granted. “The worst sort of attitude is: ‘You, as a vendor, should feel honored that we’re giving you the opportunity to send us this big check. Thanks for that, we’ll get back in touch next year when your invoice goes out for next year’s fee. Oh, and by the way, don’t bug us for anything in the meantime.’”
Associations can act as if it’s a hunting license, he says: “When it comes to events, the attitude is that we’d love for you to come and spend a whole bunch of money on our events, but don’t talk to anyone else because you’re just a vendor.”
While Frankil was running the National Association of Federally-Insured Credit Unions Services Corporation (NAFCU Services), he had a vendor partner that was exhibiting at another association’s big trade show in Texas. It was a huge production; people would come days in advance — “really a big-ticket item with a lot of wining and dining.” The vendor had spent around $60,000 on the event.
The association’s opening reception was in the exhibit hall, with the vendor 30 feet from a giant popcorn station. The vendor could hear people gathering around the popcorn station, could smell the popcorn and could also see a giant sign in front of the stand that said, “no vendors allowed.”
What’s that popcorn cost? And more importantly, what does that say about your attitude toward the people who are supporting your association, Frankil wonders. “On top of that, nobody from the association or their board ever stopped by to say thank you to the vendor. And so the next year, the vendor didn’t pay to be at the tradeshow. When people talk about non-dues revenue, the first and most fundamental thing that has to happen is a mindset shift.”
Part of the way forward, Frankil says, is to start treating vendors, sponsors, exhibitors — the whole lot — as valuable partners.
“You want to get to a point where you’re looking at a win-win-win solution,” Frankil says. “Where you’re creating programs that are going to generate opportunities for your vendor partners and that are going to help your members become more productive and be more effective at generating revenue themselves. And then, ultimately, you generate more revenue as an association, right? But you don’t get there by clicking your heels three times and saying, ‘Hey, I’d love to have a robust non-dues revenue program. Come on and write me a check.’”
Frankil found success with a model he developed while at the credit union association, which was to essentially apply the basic principles of content marketing to a non-dues revenue program and from there build a robust partner model.
To do so, associations need to create a structured program where an investment will guarantee certain benefits: a set number of live webinars, blog posts, webcasts, speaking slots at events and so on — all opportunities for them to leverage your channel access. “Go to your vendors with a value proposition, not just asking for a check,” Frankil says.
The first step for an association is to take inventory of all its potential channels to understand the opportunities that can be presented to vendors. Then, Frankil typically creates different levels for vendors depending on their investment — usually on a tiered system such as bronze, silver, gold and platinum. “It’s about going to the vendor with this very structured program that’s focused on your channel but is also going to help them be your partner in this channel together. When you do that, it really distinguishes you from almost every other association that they’re working with. Because very few do that.”
Both members and vendors benefit from this attention to detail. By working closely to partner on solutions that work for the vendors, the association has done the due diligence that lets members have confidence that all vendors are quality companies. After all, not every company can be a vendor. That exclusivity assures members that the association’s vendors have the “proverbial Good Housekeeping Seal of Approval,” Frankil says.
This approach proved fruitful for Frankil. When he took over as CEO at NAFCU Services and implemented this model, Frankil set new revenue records every year for seven consecutive years. He also increased the number of $100,000 sponsors from just one when he took over, to seven before he left. (An eighth $100,000-level sponsor joined shortly after his departure as well.)
“You want 15- to 20-year partners, right?” Frankil asks. “You want partners that see such value in your channel, because of your commitment to them, that they’re going to write you bigger and bigger checks every single year.”
The Main Event
Events. There’s no way around it. They have been associations’ bread and butter for years, and they will continue to, pandemic be damned. “It’s your Super Bowl,” Neal says. “You have to devote your time and resources to that because it has a greater chance to produce revenue.”
For at least the immediate future, events will rely heavily on virtual meetings, with Neal not expecting to see big live events until 2022. “Virtual events can’t be a consolation prize. You can’t just hope to get through the next one and wait for the day that you’re back in person. Even when the vaccine gets distributed, there’s going to be a lag time for all the infrastructure to be in place for these in-person events.”
And there is value to be had in virtual events. “We are figuring out how to exploit that value and get the content in front of people who matter to help improve how they perform in their job,” says John Toner V, vice president, convention and industry collaboration, United Fresh Produce Association.
While virtual events typically generate less revenue than in-person events, associations can still provide value to members, which in turn creates revenue opportunities. United Fresh was able to pull off this sort of revenue-generating virtual event on short notice last year.
The association’s in-person event was scheduled for the middle of June. When the NCAA March Madness basketball tournament got canceled, Toner recognized it as a signal of just how severe the pandemic was. With United Fresh’s big event only 90 days away, they had to act fast.
As Toner started looking into digital platforms, he became encouraged. “I got into video game websites because I was doing a lot of research, and there was a streaming video game that had 120,000 people watching. I was thinking, all right, it’s legitimate. People will show up online to watch ‘Saturday Night Live’ or with news programs getting millions of viewers a night.”
He knew then that his team could make a digital platform work, especially since they had built-in member loyalty and a strong sense of trust among the association’s senior leadership. “Our CEO’s been here for close to 30 years now, our senior vice president of policy has been here for over 20 years, I’ve been here for 21 years,” Toner says. “So we work really well together. We can look at each other and know everything will be OK, and there’s a shared trust there. Working as a team, it’s critically important that we all know our function.”
Even with the pandemic, and the major economic activity that this event provides to the association and the industry, there was a sense that everything was going to be OK. “Our CEO took the reins on everything because this event is critically important to the success of the industry.”
Having that leadership was priceless, Toner says. So was being decisive and acting fast. The association didn’t have to get into production until May, but if it was going to make the event successful, it didn’t have the luxury to sit around and wait to sort through what was going to happen. “If we had 12 weeks, we really could have figured out the attendee engagement piece,” Toner says. But much like the rest of 2020, he and his team made the most of the hand they were dealt.
The Partner Piece
Of course, being mindful of partners translates to association events — and an event that ultimately generates strong revenue relies on a good two-way relationship with partners.
At the early stage of event planning, associations should interview all the suppliers and vendors first, Neal says. Ask them what they need at the event. What are their problems? How can you help them succeed? “Build the event with them in mind because they are the principle source of revenue,” Neal says. “And then try to match up the buyer with the community and audience they want.”
The United Fresh Produce Association understood this dynamic for its big virtual event last year. “We had a staff-led effort that put a lot of energy into educating our exhibitors about what was possible on the virtual platform,” Toner says. “Most of our exhibitors had elaborate offerings: broadcast chef demos, demo kitchens showcasing how to use products, videos from helicopters of growing valleys, prerecorded field visits, lettuce harvesting in real time. Some of it was shot with a smartphone, others had real production value.”
Overall, the exhibitors were well-versed on the platform’s capabilities, including some that really learned how to engage with attendees using digital tools. “It’s the first time we had to do that,” Toner says of training exhibitors.
For all the challenges that virtual events can bring, there are plenty of positives, too: ease of attendance, lower travel costs and a tremendous amount of data. “One of the most valuable things that exhibitors got out of their United Fresh experience was data,” Toner says.
In general, Toner emphasizes the importance of associations paying attention to what matters most for events: value creation, both for partners and members alike. “What does their business do, and how can the event improve their business?” Toner asks. “That’s where the value is.”
Right now, one of the biggest value drivers is a sense of connection, Toner says. The key to generating revenue from events is delivering that connection. Toner adds: “That’s what people are looking for when we get back to in-person meetings, and that’s the key to the next generation of digital events: Did you provide connections that helped me do something that I didn’t have before?”
Supercharged Virtual Events
There isn’t going to be much room to phone in virtual events going forward, Neal says. While associations had some built-in goodwill in 2020 for live events that weren’t necessarily of the highest caliber, that’s not bound to last. “Everybody got a break last year,” Neal says. “Audiences were very forgiving. Now as we go into the new year, the events have to be better.”
With Zoom fatigue — and general virtual fatigue — at all-time highs, how do you get people to pay for a virtual event after a year of all digital all the time? What about after two years of this? “How do you get people to come to an event, be engaged, be willing to spend time in a marketplace?” Neal asks.
The key, Neal says, is to start thinking with a reality-TV mindset. “Two or three hours a day is about all anybody wants to watch,” Neal says. “It’s got to be broken up in a lot of increments. It has to be hands-on interactive — and not just chat and polling, which everybody’s doing. It’s got to be more than that.”
Event organizers, working with their partners and technology platforms, will need to embrace the use of studios to film higher-quality supplier demonstrations, talk-show-like stage sets and include more production value to all aspects of the virtual event, Neal says. Also on the rise, Neal says, is making sample boxes available for suppliers to provide tangible examples of what is being demoed, allowing virtual event audiences to experience firsthand what a product looks, smells and tastes like. Neal says: “Real-time audience polling, immediate responses to chat and customized matchmaking of attendees is becoming table stakes for high-quality virtual events.”
The Digital Piece
One of the keys to capitalizing on live events starts with having a good website. It may be digital basics 101, but associations need to showcase value to members more than ever. For live events, that includes promotion on the website through common measures: having a big banner image, large RSVP buttons, a landing page with event information and so forth.
While simple in theory, it’s a critical step to get exactly right. After all, once you set up a great user experience for your live events, you can duplicate that over and over for events large and small, says Murad Bushnaq, founder and creative director of Morweb.org, which builds websites for nonprofits.
Having a clear-cut process can lead to more event sign-ups. “You need to have a good site because people have a lot of options out there,” Bushnaq says. “If users aren’t getting what they need, they’re going to lose interest and not engage with the association. If they can’t get value out of it, there’s a million other things to do.”
While easier event registration can lead to a higher attendance and thus greater revenue, associations can also drive revenue with a site in a multitude of other ways. Online stores are a great place to sell branded merchandise, ask for donations, link to event registration and more. Hosting a job board, which is a great member benefit, is another opportunity to partner with employers, this time with the organization paying to post job openings.
On the content marketing side of your website in particular, Bushnaq sees expanded educational video offerings as a great way to boost revenue. “It’s not as common as it should be, and it’s something associations should definitely be using,” he says. The revenue can come from a partner-sponsored video or from one-off fees to access the video. Bushnaq adds that creating some sort of certification or badge after the video course is over is a great way to further boost engagement and deliver value.
The Way Forward
There’s no way around it: 2020 was hard for just about everybody. Revenue and growth were stagnant for associations and businesses alike. As Toner notes, there has been no shortage of pain or loss recently. But for all the turmoil, there is hope — rooted in the very foundation of associations.
“Associations have been around for centuries,” Toner says. “I belong to associations that my grandparents were members of; I go to meetings, and I see my grandfather’s picture on the wall.”
Which is to say, associations aren’t going away. They may be changing in new ways, and revenue may have to come from previously untapped streams, but people will always want to belong to something greater than themselves. “Members care about the organizations they belong to,” Toner says. “It’s our job as a trade association to help connect all those members and help members do better with each other.”
For more ideas and strategies on generating non-dues revenue dive into past FORUM stories.