Even before the COVID-19 pandemic triggered a global recession, growing nondues revenue was top of mind for association leaders. Recent webinars and virtual conferences reflect this attention. However, the common theme of these events is a narrow focus on squeezing more dollars from legacy sources of nondues revenue: meetings, education publications, and advertising.
An alternative approach is to consider digital transformation opportunities that will allow for new streams of nondues revenue. One model for doing this is to launch a digital platform business.
Platform businesses do not create value themselves. Rather, they orchestrate value creation by outsiders. For example, Uber’s platform connects riders with drivers, while the Airbnb platform connects guests with hosts. Associations can follow this model by creating the digital space to connect external service providers with consumers seeking the needed service. All the while, the hosting association is monetizing the exchange and capturing valuable data.
Because associations have influence and central positioning within professional and industry ecosystems, they have great potential as platform leaders. Let’s explore a five-step strategy that can help associations exit the comfort zone of traditional nondues revenue approaches.
Choose Your Business Innovation Ambition
The first step is deciding what your association is willing to try. If you are comfortable making incremental improvements to the services you're currently providing nondues customers, then focus on efficiency and process improvements in your current operations. If you are ready to do more—leverage existing assets and explore new markets, partners, and services—then you have the mindset to embrace the digital platform model.
Measure Your Business Innovation Readiness
Next, consider your organization's readiness for change. One informal approach is to talk to your peer leaders and measure your core capacity for business innovation against what you learn about your peer’s innovation capacity.
Another option is to use a maturity model approach that can measure the gap between your current business development capacity as compared to the best practice model. A recently completed research project from the ASAE Research Foundation (Advancing Business-Venture Innovation: A Readiness Tool for Health Associations) used Association Ventures Innovation maturity model in a business innovation readiness tool. The maturity model tool quantifies the root causes and weak links in an association’s capacity to increase nondues revenue. With a readiness diagnosis in hand, association leaders can focus on correcting the root causes of barriers to business innovation. Whether you use peer-to-peer conversations or a maturity model tool, tap internal and external resources to remedy any specific innovation weaknesses you discovered.