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The ROI Missing Link (815 words)

Ed Rigsbee, top speaker on Membership Growth

The ROI Missing Link

Is there really an ROI Missing Link? Absolutely! Meeting ROI and Member ROI are two completely different issues; however for associations and societies they are quite related. Recently, I have sat in on ROI webinars and read a number of articles on meeting ROI. Most of the work that I have experienced has been around particular formulas. The math is the easy part.

What’s Missing

The ROI Missing Link element is the valuation methodology; most do not get into much detail here—I’ve asked. This is the important and more difficult part. Assigning real-dollar numbers to elements seems to be where much of the available ROI information falls short.

Meetings without Members & the ROI Missing Link

The primary challenge that associations and societies are experiencing is membership hemorrhaging. The reason for this is perceived value, or lack there of. Few organizations have been successful in their effort to determine the yearly sustainable real-dollar value of membership, hence the ROI Missing Link. Without an honest number there is no way to determine a truthful ROI of their membership dollar and time investment. It is difficult to have meetings without members.

ROI Missing Link Facilitated Process

For over a decade I have been teaching membership organizations a simple but honest method to determine the yearly sustainable real-dollar value that members receive from their membership investment. The method is simple—I ask them. In a real-time live environment, asking members what the various services that their organization delivers yields truthful answers.

Why Not Use Technology?

The reason I do not believe in technology for this process is because the technology removes risk. I want members to own their valuation answers. I’m not looking for an average of blind numbers but rather a face-to-face discussion on the actual real-dollar value received from any particular organization delivered line item benefit.

The ROI Missing Link

The ROI Missing Link includes all the hoopla around meeting ROI as it’s the membership ROI. Without members there is no meeting. Sure meeting ROI is a great number to have, however it is such a small part of the total equation. The meeting ROI math has no honest meaning without the total equation. Today, members of membership organizations are looking at the total value proposition of membership, not just the meeting ROI.

Membership ROI

To discover the honest membership ROI that your organization delivers, you will want to conduct a facilitated session with a reasonable representation of your membership; demographics, psycho-graphics, etc. Through this process, the ROI Missing Link will be completed. The executive director, any paid staff member, or volunteer officer CANNOT be the facilitator, period!

  1. First be clear on the idea that this is art and science. As such, you are only attempting to get “ball park” numbers. You cannot drill down to the last nickel. Also determine if you want to include the annual meeting value. If only a small percentage of your members attend the annual meeting, leave that value and cost out of the steps below.
  2. Using a flip pad or electronic imaging, first ask attendees what benefits the organization offers and add each to the list (without any dollar value).
  3. After the attendees are done offering the benefits, move into the valuation process. Take one item at a time, saving networking for last, and discuss the yearly sustainable real-dollar value of the item. Complete agreement is not necessary. If the majority say the number is X, then go with X.
  4. This same process must be completed for every item mentioned. And guess what? Some items will be valuated at zero. No worries about the zeros, however those should be placed on the agenda for the next board of directors meeting. Also, the facilitator must keep things moving and not allow any one person to grandstand—too much.
  5. If the value is something that non-members in the industry also receive, you unfortunately have to value the item as zero. Not that the item (like advocacy) is of no value, since non-members also receive the value, it cannot be listed in the “member” ROI column.
  6. If an item is offered to non-members, then the difference between member and non-member price is the valuation number. Again, we are trying to determine the honest ROI of paying dues every year.
  7. When all items have been valuated, add the total value and divide by the cost of membership for an X times ROI. I realize that some others use a different formula, and that’s fine. Use any formula you want. The end result is: for “$Y” in your yearly membership investment, you get “? x $Y in return” and the ultimate question is this…Is it a good business decision to belong to Y Association or Society?

Does it Work?

Yes! I have been working with associations and societies for over a decade, helping them to determine their yearly sustainable real-dollar membership investment ROI. It is this number that delivers the gold. It is this number that will help members to both recruit new members and remain members themselves.