Blame it on Burger King or Subway, but people want to have it their way. Basing membership dues on headcount instead of a tiered dues structure is a quick way to turn off a lot of businesses these days.
With the downturn in the economy, value is critical to organizations. It’s difficult to show large employers that they are receiving more value for their membership than those paying less with fewer employees.
Yes, many of your big employers have altruistic views so the value of every dime is not as great a concern as it might be for a smaller business. But basing membership fees on employee headcount is starting to look as outdated as a burnt orange refrigerator.
However, some chambers find the move to a tiered dues structure frustrating. It can be difficult to explain the tier benefits to members, especially if what they want will cost them more than they’re currently paying. However, the value behind what they receive is an important differentiator.
Andrew Cripps, CEO of the Effingham Chamber found when they moved from fair share to tiered dues, “New members tend to join at higher levels than they would have been slotted in based on number of employees.”
While tiered dues is gaining in popularity for membership organizations, members won’t just select a tier and mail in their checks. There’s a lot more to the switch than that.
What You Need to do When Moving to a Tiered Dues Structure for Your Chamber
If you’re migrating from an employee headcount structure of chamber dues to a tiered dues structure, and want to be successful, you need to do a few things in addition to creating the structure/plan.
- Complete a member needs assessment.
For a successful tiered dues implementation, you want to ensure there’s something for everyone. For instance, there should be a tier for companies interested in larger community-building activities and economic development as well as a tier that addresses the needs of mom-and-pop stores. You may also have solopreneurs who would join the chamber if you met their continuing education needs, for instance.
Cathi Hight, President of Hight Performance Group, mentioned in her “New Approach to Tiered Membership” that chambers should “collect feedback from additional stakeholders.” Knowing what your members and potential members want can help you design more attractive tiers.
- Align benefits with appropriate tiers.
Some chambers find it helpful to create marketing personas or customer avatars for the different types of members that they have (or consult the personas if they already exist). Knowing who you’re helping can assist you in deciding which benefits should to assign to which tiers. For instance, your highest tier members (aka your largest companies) won’t care if they have a spot at your holiday craft bazaar. That’s not why they’re a part of your chamber.
On the other hand, your smallest business member on concerned with more pressing matters than the Chamber’s economic development work. Yes, it helps them in the long run, but they’re looking to get more people in their door now. When creating tiers, careful consideration must be given to each type of member and what is important to them. Providing your lower tiers with too many benefits will also mean they won’t upgrade.
Many chambers find it easy to work with a consultant on this part or consult with other chamber pros to find the right benefits for each tier.
- Discover what’s left on the table.
After performing the needs assessments and realizing how you will structure your tiers, think about other demographics that might be interested in membership now that you are no longer basing dues on headcount. Does it make sense to offer a student or new graduate tier, aimed at networking? Does a retiree tier help keep volunteers in the loop?
Consider who you might be able to reach and what’s most important to them. Think about how you might use tiered dues to reach a more diverse group of business owners.
The Wenatchee Valley (Washington) Chamber tiered dues structure.
- Consolidate for ease.
Moving to tiered dues is also the ideal time to consolidate things like sponsorships into the mix. You can create a flat fee for a tier that includes a specified level of sponsorship for some or all your events. You can also add in other opportunities like advertising. Many businesses prefer to cut one check for the year. Plus, it frees up your time from “chasing the money” before every event.
- Set timelines and responsibilities.
There’s a lot to a tiered dues unveiling. You’ll need to create a timeline including what happens when and who oversees/is responsible for each stage or activity.
Tracking performance metrics toward your goal is also critical to success. Some of the details behind those things are listed below.
- Allocate time and money for marketing.
Rolling out tiered dues will help you meet more of your members’ needs but be prepared for the upfront work investment. It may be confusing for members and leave you stressed initially. However, you want to dedicate resources to spreading the word about the benefit of the switch. This was not something you did because you have extra time on your hands.
Tiered dues is an improvement in your members’ lives. Dedicate time and money to ensuring they know this. It will also create excitement around the change. Using content marketing, word-of-mouth, and digital marketing will help ensure everyone understands what’s in it for them.
Jefferson Chamber (Louisiana) tiered dues marketing page.
- Don’t forget education.
The concept of tiered dues might be new to some of your members. Even if your members understand how membership tiers work, they won’t intuitively know what tier is best for them. Don’t skimp on education. Allow for the time and expertise needed to help your members understand why the program is good for every member and what it means for them individually.
You must understand their business needs and goals to be able to help them sign up for the appropriate tier. The closer you align these things, the more likely they will enjoy the new pricing structure.
- Master the art of differentiation.
The problem with many tiered dues structures is that the tiers lack enough obvious differentiation to incentivize investment at a higher level. If someone doesn’t understand which tier benefits them the most, the result will be inaction and a lost member. You must clearly define each tier (and its benefits).
If the tiers appear too similar, your members will select the least expensive, leaving your higher tiers empty. If, on the other hand, a member sees how they can achieve their business goals in a tier, they will be able to make a good selection—one that will benefit them and work for the chamber as well.
You need to differentiate in the design as well as the later marketing to your members. Differentiation is something you’ll work on in the planning and the unveiling stages.
The Beverly Hills Chamber of Commerce tiered dues structure.
- Practice the upsell.
Have you ever noticed when a tech or app company offers different types of tiers, they often have a basic one that is nothing more than an extended trial with few perks? The next level up has a few more benefits. There’s usually a hook that incentivizes most people to buy into a higher tier or member level.
Since some people tend to select the lower tier, you’ll want to help them understand the value behind each level. If they limit themselves to a lower tier, they may save money, but they may not get the value they need. This will cause them to become dissatisfied with membership; particularly if the benefit was something they had before and decided to give up. Be prepared to go through different scenarios with them so that they can find the tier that suits their needs best.
There are many moving parts involved in rolling out a tiered dues model. However, most chambers in the Chamber Pros Community report that the increased revenue from the switch made it worth their time. Plus, there were increased benefits for members.
If you’re considering a switch from fair share to tiered dues, this may be the ideal time to institute it. In light of the possible recession, members are probably evaluating all expenses. Chamber membership should feel so value-laden that your members won’t consider it an expense, but an investment.