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Monetizing the Media-Member Relationship - 10/7/2011 -

Learning to monetize your relationship with members will actually help you better serve their needs.

By Jennifer Salopek

There’s a reason that the eternal Holy Grail of associations, non-dues revenue, drew a standing-room-only crowd to an Association Media & Publishing Lunch & Learn on the topic in August. Consultant Lou Ann Sabatier, who laid out the groundwork for lucrative growth strategies, noted that competition is so fierce, even commercial publications are moving to a membership model.

And yet, associations still have a key asset in their content, and if we develop a new way of thinking—this is not about tactics, but about strategy, Sabatier explained—we can monetize our relationships with members as we better serve their needs.

This positioning for growth has six key steps, according to Sabatier:

1. Assess performance

2. Innovate

3. Protect existing revenue

4. Diversify

5. Partner

6. Be accountable

Assess performance. Before we design and implement any new strategy, it’s important to see where we are. Further, it can lead to growth, Sabatier says. Your organization must answer the question, "Have we optimized our current non-dues revenue-generating programs and services?” Optimization means serving members to the best of our ability; enhancing revenues and margins; and enhancing employee and volunteer morale and motivation. Existing programs are where revenue growth will come first, says Sabatier, who notes that sometimes there is 10 to 20 percent growth sitting on the table.

She emphasized that morale and motivation are important pieces. "‘Do more with less’ is a stupid mantra,” Sabatier says. "Process and discipline are important to people, whether paid or volunteer. They want to know that the organization is managing smart and that they are being heard.”

Formulating a clear and articulated growth strategy is the next step. It comprises vision and strategy, competitive analysis, and value proposition, then details the available resources and how they will be leveraged. Vision focuses on how you will serve member needs, while strategy is a concrete roadmap. The value proposition is key to differentiation in the marketplace, and can vary for different stakeholders. It lays out how you will curate your key asset, content.

Innovate. When striving to innovate, associations often make the mistake of mimicking other groups in the name of "best practices,” Sabatier says. "Innovation is hard work and requires risk; it cannot be random, accidental, or ad hoc if it is to be sustainable.” Leadership and support from the top of the organization are crucial. To innovate, examine offerings, process, environment, and people.

"It’s not for the faint of heart; everyone must be on board,” she says.

Protect existing revenue. Your organization also must be sure to protect current revenue streams and programs that are working. Ask yourself, "Why do we charge the prices we do?” "Believe that what you’re offering has value, and don’t be afraid to charge,” says Sabatier.

Diversify. To diversify your offerings, take a 360-degree view of your members and prospects; identify and develop personas for the various segments of your audience. Although offerings in the past were grouped into a few dominant revenue streams, now many smaller lines make up for the decline in the traditional standard-bearers.

Use a disciplined approach to assess opportunities with these three questions:

1. Is it real? Will somebody actually pay to buy what we offer? Can our team produce and sell it?

2. Is it worth it? Is there sufficient revenue to move the meter? Is there any margin when fully costed? Does selling it provide an intangible benefit?

3. Can we win? Can we beat the competition and still make money?

Partner. Seek partners for all kinds of activities: business development, shared learning, marketing. Look for complementary competencies, expanded opportunities, the opportunity to leverage existing resources, and the opportunity to minimize new costs.

Be accountable. Accountability is also critical. You must commit to actionable research to measure success and close the loop. "You must want to know whether you were successful,” Sabatier says, adding that it’s okay to fail. "It’s painful, but we must take risks to have forward movement.”

SHRM Case Study

The Society for Human Resource Management (SHRM) has taken many of these suggestions to heart. In the second part of the program, Tim Canny, director of publication sales, detailed SHRM’s non-dues revenue strategy and results in a case study. Some quick statistics:

· 250,000 members

· Annual dues: $180 per person

· $105 million in annual revenue

· Website draws 600,000 unique visitors per month

· Annual conference draws 14,000 attendees and 500 exhibitors

SHRM has made a concerted effort to expand non-dues revenue over the past two years, Canny says. Even so, traditional print advertising in the flagship magazine continues to represent the largest segment (one-third) of advertising revenue. Other vehicles include online advertising, ads in print and electronic newsletters, list rental (postal mail only), job postings, conferences, webcast sponsorships, certification, and other offerings.

Canny offered these lessons learned:

1. Be strategic. Have a vision and a plan for how to get there.

2. Know your risk tolerance. Anticipate some failure; learn and build from there.

3. Measure. Put metrics in place beforehand that allow you to assess performance.

4. Renew and invent. When metrics indicate success, refresh and renew those products. Meanwhile, identify new markets and launch new products in the medium appropriate to the opportunity.

"While you defend existing positions, you must actively build new ones,” Canny says.

To wrap up, Sabatier provided some closing comments about digital publishing. Many organizations are looking to digital publishing as a source of new revenue, she notes. However, they also tend to wait until they begin that process to devise the business model. "You need to know where your members are in the post-paper market and what that means for your organization,” she says. "You may need to give away stuff that provides access to a monetization opportunity.”

Jennifer J. Salopek is a freelance writer in McLean, Va.  Association Media & Publishing thanks her for covering this event for our members who were unable to attend. Also, special thanks to the National School Boards Association for hosting and EEI Communications and AGS for sponsoring.


 

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