Partnership v. Membership: ROI

Pile of US $1 bills

Lewis’s latest post in our ongoing, irregular series addresses making sponsorship offerings more valuable to your corporate supporters: understand what’s motivating them, structure the relationship to address their specific business needs, and offer different levels of investment. In short, create clear Return On Investment (ROI).

Which brings us to the ROI of membership, and sharing that ROI with your members.

Calls to calculate and share ROI tend to start from a good place. Someone on your board of directors, or in your membership committee, decides that it would be a terrific recruitment tool. The association provides tremendous value, of course, so if you clearly demonstrate to the members what an incredible value membership in your association is – members get a HUGE list of stuff that would cost MANY, MANY dollars for the low-low price of [whatever your dues cost], they’ll come flooding in.

“That’s a savings of MANY, MANY dollars! They’ll be beating down our doors to save all that money and get all that great stuff!”

Unfortunately, it doesn’t tend to work quite that way in practice.

Calculating and, even more so, sharing ROI is a fraught topic for membership professionals.

[This is different than calculating cost to serve, which you absolutely need to know, and which is absolutely an internal-only metric.]

One, the vast majority of your members do not use the vast majority of your benefits. And if they started to, you wouldn’t be able to function – I guarantee you are understaffed to have every single member taking 100% advantage of everything you provide. Associations are structured for limited engagement by our members.

In one sense, this is OK – generally speaking, a given member is seeking 2-3 key outcomes when she chooses to join your association. You might offer ten distinct member benefits, but she only needs two of them. As long as your association is helping her solve that key problem or achieve that key goal, she’s probably happy.

The problem when you start offering ROI calculations, however, is that you list ALL TEN benefits, adding up to some HUGE number of course, and then she realizes that she’s paying for all ten, even though she’s only using two.

Even worse, what if attaching dollar figures to each of those benefits alerts her to the fact that the dollar value of the two benefits she wants, even as the association assigns it, is less than what she’s paying in dues?

Uh oh.

Two, and relatedly, associations tend to over-value what we’re providing.

“What’s a subscription to our journal worth?”

“Well, if we divide the total cost to produce it by the total number of subscribers, it works out to $7.36 per person.”

“But what about the INTANGIBLE value?”

“It’s one MILLION dollars!” (in Dr. Evil voice)

When we start getting into ROI calculations, we REALLY REALLY want to be able to show a HUGE number for value to make whatever we’re charging in dues look infinitesimal by comparison.

That’s totally understandable, and in fact, a subscription to your journal probably really is worth way more than $7.36.

But our members are not stupid, and when we put our thumbs too heavily on the value side of the scale, they can smell the BS.

We’re particularly bad at valuing intangible benefits, like the connections that people make because we provided an environment where they could happen, or the insights gained in the hallway conversations at events, or knowing just who to call at 4:57 on a Friday afternoon when you have a business emergency that must be solved immediately, because your and her involvement in the local chapter has allowed you to build the type of relationship where you know she’ll pick up and that she can help you.

What’s that worth?

It’s priceless (with apologies to MasterCard).

So what am I saying?

One, if possible, avoid creating an ROI calculator or attaching direct dollar values to particular member benefits. It rarely ends well.

Two, when you’re thinking about ROI or ROE or engagement scoring, remember that you can’t put a dollar value on everything. We’re dealing with humans and relationships here – not just transactions. And some of what your members most value about their relationship with the association, and the relationships they’ve built and the doors that have opened for them because your association created that space, may be invisible to you, but that doesn’t mean it’s not real.

In his next post, Lewis is going to dig more deeply into the ROI of corporate partnership and sponsorship. Spoiler alert: it functions a little differently than the ROI of membership.

Photo by Sharon McCutcheon on Unsplash



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