Giving Dues their Due
By Cecilia Sepp, CAE, ACNP, LPEC
In one of the networking groups I belong to, someone brought up the issue of Membership Dues. We all know these are necessary to give the organization resources, but it also demonstrates to the person paying the dues that there is value in joining and it’s worth investing your money. I think this is why the “freemium” model never really took off – if there is no value assigned to the membership, then why bother with it?
However, we are still too often stuck in what I call the “Costco Model,” the “pay to pay” system where dues are really an entry fee rather than a payment that provides other benefits along with access. When you think about it, Costco has a good thing going: you have to pay to “join” their store membership so you can come inside and spend money. I think the guy that invented the Pyramid Scheme would be pretty impressed.
As you probably guessed, I don’t have a Costco membership nor do I want one. Why on Earth would I pay money to spend money when I can walk in a variety of similar stores to spend money without paying a fee? In a way this model is like paying a cover charge at a club – you can come in IF you pay for it and then you had better meet our two-drink minimum.
When we start to frame dues models in light of similar payment schemes, I think we would want to avoid the “pay to pay”model and adopt a dues model that actually provides something substantive. Otherwise, it is just a really expensive cover charge that people can easily write out of their budget.
A few years ago, I had a group called The 501c League which I piloted as an experiment in membership and engagement. It was legally organized as an LLC and was completely virtual. Dues were only $10 per month because I anticipated future options where additional fees would be required. We also had an option of paying by the month or paying annually. You could end your membership whenever you wanted – it was especially easy on the month-to-month option.
The concept was that the members would decide what we would do and how we would do it. We even had an option of being “Executive Director for a Week” where someone could volunteer to be the leader. The group was a little unsure of what to do because we aren’t trained to create our own membership experience but we gave it the “old college try.”
Unfortunately, like a lot of new ideas, it did not survive the pandemic lockdown of 2020. Instead, I evolved The 501c League into an education company and then eventually folded it into Rogue Tulips Consulting.
But what was interesting was the experimentation with dues models. Why make someone pay a large amount once per year and then make them pay for everything else? We threw that notion out the window. The monthly fee was the access fee and was quite reasonable. Because we were volunteer driven, we really didn’t add anything else that you had to pay for as we were designing our own experience. We provided the resources of time, creativity, and energy to have virtual lunches, webinars, and we even started a newsletter.
It's my hope that we will eventually get away from the traditional dues model (aka Costco Model) and design a dues package that includes valuable benefits that you don’t have to pay extra to access.
In a world that is ripe with opportunities and options, including ones that are extremely budget friendly, associations need to re-evaluate the dues model to reduce their dependence on this revenue stream. If an association wants to continue charging a high dues rate (e.g., $300 or more per person per year) it better have a value proposition that is easily identifiable.
If I want to pay to pay, I’ll just get a Costco membership.
