Price differential the real feature of membership.
It’s very interesting that a lot of association executives association volunteer leaders and others seem to think that the feature of membership or the benefit of membership is something like…the meeting or other things in which Members can participate.
Here’s the thing…if non-Members can participate also, then that activity truly is not a feature membership.
What is the feature of membership, it’s the differential and I think this is the thing that we really have to look at…the price differential in every product and service you offer.
Consider Anti-Trust Law
The United States Federal anti-trust law basically states that you cannot compel membership in the price of any product or service. What that effectively means is this…you cannot charge a non-member more for a product or service than is equal to or more than the cost of membership.
If your membership, as an example, is annually $500 and you charged $500 more, let’s say, for your meeting registration to a non-member than a member, technically you’d be compelling membership. This behavior would put your organization in a non-defensible situation should anybody bring litigation against you.
Now chances are, if you have this practice of charging a higher differential than is the cost of membership or, if you have this practice of rolling in a free membership with your meeting to pay that differential…there is a good chance you’ll never get hit with litigation against you. There is also good chance the Federal Government will never initiate litigation.
What Percentage Differential?
However, if a competitor did, or if a vendor did, or a sponsor did, or a disgruntled Member…you would most likely be in indefensible position. With this in mind, let’s talk about differential pricing and the way that should safely work for you. Basically, a safe differential it’s about 75% to 80% of the membership cost. The Federal Government doesn’t explicitly state an exact number, but association law lawyers say there’s indication that approximately 75% to 80% of the of the cost of membership is a fair differential.
This also means, for organizations where membership priced low, especially like professional societies, there is not as much differential to work with. If membership in your organization is $100…we are talking about a $75 or $80 differential maximum in the products and services you offer…that’s it.
I realize this can be frustrating but here is a beacon of hope, a ray of sunshine, a silver lining in this cloud…and that is…you can charge the differential on everything it’s not collective, it’s not cumulative, it’s for every product and every service.
You can have that differential of about 75% of the cost of membership on everything. You might be thinking that’s a lot of money for people to buy these things and not be a member. Absolutely, and the really important point here is that every time your member registers for a meeting, attends a webinar, buys a product or service from you, they will see that there is this 75% differential or savings between their member price and the non-member price. This will cause them to have a mental conversation with themselves about the value of their membership in the organization. This is an important part of the member value equation.
If you build the pricing differential with purpose and strategy, every member in your organization is going to see a substantial savings over non-member pricing. They will experience this valuable savings on everything. When this occurs, you’re going to be able to do qualitative research on the real-dollar value of membership. My book, The ROI of Membership goes deeply into the subject. It’s all about on how to prove the return on investment in actual dollar numbers to members.
If you’ve got members that are engaged and they’re participating in quite a number of activities and in all of these for-fee activities they’re enjoying a 75% discount differential off the cost because of membership, they’re jumping for joy.
Focus of the total value proposition members receive and you’ll keep your members. And, you’ll also start noticing your current and satisfied members will be your prime source for new members…they will become your member recruitment evangelists.