Let’s Go Treasure Hunting Look to Member Needs, Other Factors to Generate Revenue

April 7, 2006 Edition of TRENDS: Commentary

By Andrew S. Lang CPA, President, LangCPA Consulting

All too often the search for additional sources of revenue is confined to either selecting among affinity programs, or perhaps pushing for more corporate sponsorships. These certainly can offer good sources of income, but there is such a world of opportunity in the typical assn that it is important to search as broadly as possible for the various golden nuggets that are there for the picking, if we can only see them.

In order to do justice to the immense variety of opportunities that are available, a listing of hundreds of items would be required. Such an approach would be exhaustive, but somewhat counterproductive. You see, the best solutions are always time- and site-specific – it is in meeting the members’ needs that the best sources of revenue are derived and those needs are particular to the niche you fill and the time in which you are able to take action.

So to make the argument for diversity let’s look at a case study of an actual (but unidentified) “Assn X” that recently went in search of opportunities. Some of what it found might work for your assn; certainly all will not. However, their methodology of brainstorming and looking with “fresh eyes” for the gold is certainly something everyone can use. Some of the areas they looked at are listed below and one of the many opportunities they found in each is described.

• Product related. Assn X has a very large annual meeting which about 10% of the membership attends; the other 90% simply can’t afford the expense to attend. The suggestion was made that the broader membership would really get value from the excellent educational content of the meeting. A variety of methods of packaging could be done – video for the most popular, others in CD-ROM, still others by text. The methods used had to be further studied, but the idea of taking existing content from a conference and repackaging the best of it for broader sales appeared well worth pursuing.

• Pricing. Publications for the assn were priced by the publication department, largely based on direct cost with a bit of a profit. Once prices were set they were not changed whether the product was a hot seller or gathering dust. The decision was made to look at pricing to see first if an initial reasonable profit was being made; second, that the price was truly as high as the market would comfortably bear; and third, whether the prices of existing hot sellers should be raised.

• Finding additional advertisers and exhibitors. It was noted that the assn had been fairly static in the exhibitors and advertisers with which it had been working. Upon examination two important problems were identified: The number of exhibitors was far greater than the number of advertisers, and (through a web search) there were far more companies “out there” with which Assn X should have been doing business. The decision was made that these problems represented truly significant opportunities for the assn that would warrant significant prompt effort.

• Cutting costs. The assn was contracting with its printers to direct ship regular monthly publications as well as its annual meeting program. By taking the shipping away from the printers and giving it to one of the large specialized shipping companies, assn staff discovered they could save many thousands of dollars a year.

• Contributions. Despite that Assn X is a (c)3, the organization long ago stopped asking members for contributions. One of the few benefits of X’s aging membership is that they are more likely to be interested in planned giving opportunities, or simply making charitable contributions. The global search for additional revenue made revitalization of this area of opportunity a no brainer!

• Service to members. Members of Assn X all have to buy particular kinds of supplies throughout the year. The assn had never aided the members in getting better prices for these supplies – or benefited from the members’ purchases. The decision was made to approach a few large national vendors to see if the products could be provided directly to the members at a discount while a royalty stream was earned by the assn.

• Sponsorships. It is difficult to supply a single example, since so many great opportunities were uncovered, so consider:

- The assn has a very popular monthly news bulletin. Before the brainstorming session, the staff had not realized the value a vendor would see in having only its name and logo on this monthly document that was reviewed by nearly all the members. The goal for this sponsorship was set at $25,000 a quarter!

- Assn X publishes a number of important texts that would be of interest not only to its members but to a portion of the general public. Fortunately certain of these publications are in a field in which some major corporations would like to be seen as “good citizens.” The assn is strategizing how to get one of these corporations to sponsor the distribution of an initial publication into the hands of each of its members at cost (including shipping) plus a nice profit to the assn. The member then will have the opportunity, if he chooses, to share the publication in the community in which he works. Naturally, copies will be available for sale by the assn to the general public at nonmember prices.

Opportunities for additional revenue streams for assns are quite literally endless. Identifying them is the first step, and should be fun. The next step, and where so many assns fail, is in the follow through. You will always have more ideas than you can undertake, so just take the best. Grab the low hanging fruit and use good business planning to execute on the more challenging opportunities you select.

* Reprinted with permission