7.14.2008

Free is the Future redux

Jason Della Rocca has a great post over on Acronym about a business model where there would be no membership dues.

"Could such a model work for a large scale professional society? Membership dues are zero, and revenue is generated purely via "premium items" (ie, conference reg, book sales, DVD content, etc). Some of that discussion has come up as part of the whole "unbundling" trend, sure, but I've not seen it ever taken to the extreme of coupling it with a no-cost membership."

Reminded me of an old post where I thought about this kind of model in relation to free sharing of expertise by consultants, and I quoted Lee Lefever of Common Craft (scroll to the bottom of my post).

I know of many tech companies who are also using this free-to-join (or free-to-start) model. CollectiveX is one example, where you can set up a groupsite with plenty of features for free, then once you want to get more hosted, more branded, more integrated, more reporting, etc. you can upgrade. And of course, there are a whole ton of new applications out there that are started in beta, where people are invited to try them out, report bugs and suggested improvements, then get a discount when the full version is rolled out later.

I think that associations, particularly those with dwindling membership and over-reliance on dues revenue, need to seriously think about this model, particularly now that they are facing the question of why would someone pay for membership if they can network or get relevant information for free. Their value proposition will need to reside in "more" and "greater" - phenomenal, even - better events, better engagement opportunities, better information, better resources than what can be had for free. I do also believe that some of what Jason calls the "funds gap" could be mitigated through lots of alliance building and sharing of resources with other associations in the field.

There are probably a lucky few associations (those providing certification, namely) who have made themselves indispensable (for now). But everybody else needs to watch their backs and consider pretty radical ways to stay in business.

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6 comments:

  1. I wrote a similar post a couple years ago here: http://www.gulosolutions.com/blog/2006/12/rethinking-the-value-proposition/
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  2. I've questioned the move towards unbundling for some time. I have advocated for other means to "pay" for membership other than membership dues, but that's a lot different than free membership. Too often, free membership translates to "whew, we won't have to sell the value of membership anymore", i.e., a seductively easy solution to the member value proposition challenge. Not only does this devalue the reason why people might join, the reality is that it is much harder to sell "free" than something that has a price. And ten times harder to gain commitment and loyalty. At the end of the day, the association has to convey value or people will not participate, free or not.

    I posted a response to Jason's blog.
    http://blogs.asaecenter.org/Acronym/2008/07/free_association.html
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  3. Thanks for your comments!! I think this is a really interesting debate. I personally dispute the idea that "free" means "no value" - but that's for another post, I think, I need to think it through and develop my argument...
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  4. Didn't mean to imply that free means no value. But setting something up as free, especially when the norm is to charge (such as association membership), I'm suggesting creates an uphill challenge to convey as sense of value from the "purchaser" and gain a commitment from that person.

    Guess my other point is that associations are too quick to assume that the membership part of membership doesn't have a value worth paying for (in some way, doesn't have to be money). They are always looking for a benefit that "pays for the cost of membership" rather than really sell the value of the membership.
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  5. I think that Tom's last point ia right on target. I believe that membership itself does have a perceived value and therfore it should have a price tag. I also believe that giving it away for free makes people interested in your organization customers much more than members. Customers come and go but members tend to have more brand loyalty (assuming their needs are being met to a reasonable level). I feel that just by being a member you are saying something more than when you simply purchase a product or attend a meeting. Being a member to me means that you like being involved with an organization and believe in the people that are also members and the mission which the organization looks to fulfill.

    Now that I am thinking about it mission is something that has not been addressed here. Supporting a mission has value and that is something that associations do with, and through their members. Would mission be as important if anyone could join just by signing up for free? If you are an advocacy organization and use membership numbers to generate your voice on the Hill would not having paid members be a good things or a negative one.

    It is late in the afternoon so this may be a little all over the place. I had been thinking about commenting for days and although it may not be as cogent as it should be I had to respond when I saw Tom's great point.
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