Research has identified a crucial disregard for the monetization of the national-chapter relationship. Associations are, on the whole, not getting value for their money when it comes to return on investment.
Still why aren’t associations putting the measurement of their ROI at the forefront of calculations? There are three reasons we’ve come across in our interviews.
Reason #1: Loss Leaders
Chapters are seen (consciously or subconsciously) as a loss leader strategy. Associations are incurring costs to support an important element of member experience, without exerting the effort of determining what it costs.
Reason #2: National Discretion
Many organizations’ current structures do not allow for the ability to effectively calculate ROI. This is largely due to a lack of visibility leading to team members’ inability to collect the relevant information. National staff lack the discretion and authority or political clout to make significant changes to the current structure without risking considerable political capital, or possibly even their jobs.
Reason #3: Prohibitive Complexity
The complexity of measuring member relationships and decomposing the specific effect of chapters makes the measurement of ROI difficult.
Consequently, measuring the return on investment of national-chapter relationships is no easy task. We get that. Although we also know that not doing so can prove destructive on a whole new level. Not only could your association be missing out on value for money, it might also be creating an environment where the benefits of its existing chapter network is underappreciated, and therefore not used to the best of its ability. A vicious cycle, if you will.
Results From One CEO
One CEO cited a 97% annual retention for chapter/national members in a non-reciprocal membership structure, compared to a 71% annual retention among their at-large/non-chapter members.
What Happens When You Do Measure ROI?
Return on investment for chapter support has been effectively measured in some cases, usually in large and more sophisticated organizations. And in these cases, the documented benefits of chapter membership are striking.
One cites a 97% annual retention for chapter/national members in a non-reciprocal membership structure, compared to a 71% annual retention among their at-large/non-chapter members. Using the traditional math to estimate lifetime value, this is the difference between having 33 years of membership dues from a newly acquired member versus 3.4 years—a tenfold increase in return on member recruitment.
And that’s before you take into account other types of revenue members will inevitably bring in, such as event registrations, certification renewals and purchases.
This magnitude implies that supporting and investing in chapters yields a very high financial return. Even when you take into account the fact that this scenario might reflect correlation and causation, for example older members who predominantly join at both levels, it’s impossible to argue with such impressive stats.
Chapter support and investment is worthwhile, there’s no disputing that. It’s just a case of effective management. For tips on how to implement strategies that could see your chapter ROI increase, talk to Billhighway.
Through our extensive research, we’ve identified many problems faced by associations with vast and varied chapter networks, and ways in which these obstacles might be surmounted in the future. The Billhighway model has been shown to conform to association needs with the national-chapter lens.
Chapters = opportunity
The research shows that in all likelihood chapters will remain a messy field in terms of operations and strategy for the foreseeable future. Nevertheless, therein lies an opportunity, and it’s yours for the taking.
Streamlined logistics and general improvements to the national-chapter relationship may, at first, encounter skepticism. Sometimes, such as in cases where there is a lack of structured evaluation of chapter programs, cost benefit and pre/post evaluations will be more difficult.
However, there is a light at the end of this tunnel. Much of the operational details discussed in this report mirror how CEOs discussed membership 20 years ago. Yet the potential benefits here are even greater.
If we focus on creating an environment that spotlights existing members and constituents, while also delivering a clearer ROI on the retention side through better local experiences, there’s no end to the opportunities which may arise.
If you’re ready for change in your association, make sure you check out what Billhighway can do for you and request a demo.
Download This Whitepaper
In this Billhighway whitepaper, we share what executives are thinking in terms of the strengths and weaknesses of their components and how the national-chapter relationship can be enhanced.