The Future is Yesterday: The Shift from Traditional Membership Models to Freemium and Value-Based Pricing
IN THE RAPIDLY evolving landscape of professional associations, the traditional membership model is being scrutinized and reimagined. Many of these changes have taken place already in the non-association space. The bold move towards a freemium model and eliminating member/non-member pricing is a testament to the need for progressive approaches to membership and revenue. This shift is not only timely but necessary to keep associations relevant and financially sustainable.
The Ineffectiveness of Member/Non-Member Pricing
The concept of member/nonmember pricing has long been a staple in association revenue models. However, its effectiveness is questionable in today’s context. The member/non-member pricing strategy, while seemingly straightforward, fails to convey true value to members. It operates as both a carrot and a stick, but often ends up undervaluing membership itself. When the price difference is minimal, it diminishes the perceived value of membership, leading to a transactional view where members constantly weigh their dues against immediate benefits.
This issue is not unique to associations. Gyms/health clubs, JCCs and YMCAs, and museums often face similar challenges. Offering member and non-member pricing rarely encourages long-term membership when individuals are looking for a one-off or occasional visit. The transactional nature of such pricing structures undermines the value proposition of membership, as potential members opt for one-time access without seeing the need for an ongoing commitment.
Associations need to move towards a value-based pricing model. This approach focuses on the value delivered rather than discounts. It aligns with how modern consumers think – what value am I getting for my investment? By emphasizing value over price, associations can better communicate the benefits of membership and foster a deeper connection with their members.
The Power of the Freemium Model
Adopting a freemium model can significantly enhance marketing and engagement efforts. Offering a free tier of membership with limited benefits allows associations to cast a wider net. This strategy both increases the potential audience and provides an opportunity to engage individuals who may not have considered membership otherwise. The goal is to offer enough value in the free tier to entice users to explore further, with the hope that a percentage will transition to paid memberships as they recognize the added benefits.
The freemium model has been successfully implemented by a variety of associations. Here are a few examples:
- American Society of Administrative Professionals (ASAP): ASAP offers a free membership option that provides access to essential resources such as weekly newsletters, templates, how-to guides, webinars, and networking opportunities within the ASAP Circle community.
- Association of the United States Army (AUSA): AUSA’s basic membership tier is free and includes limited access to their resources. This approach allows them to engage a larger audience and promote their mission effectively.
- Computer Science Teachers Association (CSTA): CSTA provides a free individual membership option that includes access to essential resources and community forums. This model supports their goal of fostering a vibrant community of computer science educators.
- IGDA (International Game Developers Association) Austria: This association offers a free membership tier that includes basic access to events and resources. Their freemium model is designed to build a larger community and encourage deeper engagement over time.
Learning from Non-Association Models
Associations can also look beyond their own industry for inspiration. The freemium model is prevalent in various sectors, including software, media, and education. Companies like Zoom and Duolingo have mastered the art of offering valuable free services while enticing users to upgrade for premium features. These examples provide a wealth of insights that associations can adapt to their own membership strategies.
Cultural and performing arts organizations have also successfully implemented these models. For instance, Scottish Ballet offers a freemium digital membership program that includes access to member-only film releases, backstage digital magazines, and special email content. This approach helps the Ballet engage with a global audience and build a loyal base that can transition to paid memberships or donors.
Similarly, many synagogues and churches have adopted freemium models to increase engagement and participation. These institutions often offer free membership tiers that provide basic access to services and events, while premium memberships include additional benefits and support the sustainability of the community. This approach not only broadens their reach but also strengthens the sense of belonging among members.
Rebutting the Argument Against Free Offerings
A common argument against the freemium model is that people do not value what they get for free. However, this perspective overlooks the strategic implementation of freemium models that successfully convert free users into paying members. The key lies in offering substantial value in the free tier while clearly demonstrating the additional benefits of premium membership. Companies like LinkedIn and Spotify have proven that free tiers can be powerful tools for user acquisition and engagement, ultimately leading to higher conversion rates to paid memberships. By providing a taste of the value available, organizations can build trust and showcase the benefits of deeper engagement, making the transition to paid membership a logical and appealing step for users.
Conclusion
As associations navigate the changing landscape of membership and revenue models, it is crucial to embrace innovative strategies that align with contemporary consumer behavior. The move towards freemium models and value-based pricing is a step in the right direction. These approaches indeed enhance engagement and widen the audience – but more importantly they communicate the true value of membership more effectively.
The journey may be challenging, but the potential rewards are significant. Associations that adapt and evolve will be better positioned to fulfill their missions and serve their members in meaningful ways – reaching as many people as possible, which, of course, is the real goal. As we continue to explore and implement these strategies, sharing experiences and insights will be invaluable. Let’s learn from each other and build a future where associations thrive.
