There is an art and science to pricing. But I’d be willing to bet that most associations don’t have a set strategy—and I’m certain that one association I’ve been a member of for more than 30 years didn’t have one. How do I know? Because my dues surged from $525 in 2023 to $950 this year — a whopping 81% increase!!
As an association consultant, I would never advise an association to raise dues by such a large amount in one year. I prefer steady, incremental increases–as does pricing expert Dr. Michael Tatonetti, author of the new book, Pricing for Associations. Michael says, “I recommend dues increases annually to normalize this to members, even if it is a small 3-5% increase.” I agree. It’s better to inch up dues regularly than cause member sticker shock, which often leads to decreased retention.
Michael also recommends a centralized pricing strategy for associations, recognizing that some items will be loss leaders while others contribute to the bottom line. He writes, “If each department focuses on being profitable, it could skew the overall strategy and understanding of the customer journey. When we understand our association’s unique opportunities for profit, we know where we can afford to lose money or not have high profit, and where we should have high revenue.”
According to Michael, an intentional pricing strategy includes data, value and pricing analysis and should include “when each happens, how often by product, who owns that step, templates for what should be done (analysis, surveys, focus groups, interviews), along with key performance indicators and policies (such as discounting, bundling, communication, etc.).”
Underpricing leaves money on the table that could go toward delivering value and fulfilling your mission. Overpricing chases away potential members and lowers retention.
While I’m on the subject of pricing, Jeff Cobb and Celisa Steele—two of the brightest minds in the adult education space—also provide pricing resources. Click here to replay the “Pricing in a Post-Pandemic World: Maximizing Revenue” webinar and access a list of resources, including “3 Principles of Pricing,” an episode of the Leading Learning Podcast that features an in-depth discussion of raising and lowering prices.
The pricing predicament is best solved by having a pricing strategy in place—one that’s association wide, tangible and regularly reviewed and revised if/as needed. Does your association have a pricing strategy? If you don’t know, the answer is probably not.