Inflation over the past several years has challenged associations’ cost structure. For membership, discussion of dues increases has become a top consideration. So, how have associations responded to this pricing challenge? The answer comes from associations’ experiences and benchmarking research, which offer reliable guidance on the best practices for raising dues.
How often do associations raise dues?
In this year’s soon-to-be-released Membership Marketing Benchmarking Report, 52 percent of associations reported raising dues (up from 47 percent in 2023 and 30 percent in the 2022 reports). Overall, seventy-two percent have raised dues in the past four years.
Data collected over the years from benchmarking research highlights a change in the philosophy of how frequently associations raise dues. The proportion of associations with a policy of raising dues on an annual basis has increased to 27 percent, up from 21 percent three years ago. Still, the majority of associations say that they raise dues on an as-needed basis. And 6 percent claim that they never raise dues. These stable outcomes may be the case because the past decade has witnessed a period of low inflation. However, with tighter finances and ongoing inflation, many “as needed” and “never” associations may move to a regular cadence of increases.
How much should dues increase?
For the most part, associations have not resorted to radical price changes during these inflationary times. Benchmarking respondents share that the median increase of their dues change is only 5 percent. Only 14 percent increased dues by over 11 percent. Beyond the percentage change, awareness of psychological price points is essential in raising dues. Ideally, prices ending in a 7 or 9 receive less resistance than those ending in zero to 4. For example, raising dues from $95 to $99 will result in less pushback than going from $95 to $100. Sensitivity to price points may be more important than the actual percentage change in dues.
How do associations justify raising dues to members?
The inflation numbers over the past several years may be one of the most straightforward justifications for a dues increase. The case can be particularly strong for the cumulative impact of inflation for groups that have not raised prices for several years. Costs for salaries, insurance, printing, technology, and postage continue to increase. Remarkably, it takes $186 of buying power today to purchase what cost $100 in January 2000. However, associations further support the reason for dues increases beyond inflation by highlighting new programs and services the revenue will support and sharing how the funds will help advocacy and public awareness.
What outcomes have dues increases had on membership numbers and revenue?
One of the most frequently asked questions about a dues increase is how it will impact membership. The good news about raising dues is that it will typically not negatively affect membership counts. Based on experience with many dues changes, here are some expected outcomes. First, the latest data shows that associations with 80 percent or more renewal rates are significantly more likely to have raised dues in the past year. Secondly, a dues increase will produce more revenue. In other words, the increased price will offset any potential loss of members. Finally, in survey data from 2022, of those associations that raised dues, a minority of only 9 percent said they experienced a decrease in renewal rates, and only 4 percent saw a decline in new member input.
How should a dues increase be communicated?
Transparency is a significant value in the association community. So, when a dues increase is needed, the best practice is to advise members about the change. However, you do not want to notify the member of the change at the point of transaction when sending out the renewal mailing or email or on the renewal page on the website. Instead, it is appropriate to note the upcoming change in a newsletter or somewhere on the website before the member’s renewal decision. If the dues amount changes annually, then they are expected by members, and a notice is not required. Providing a clear message of an explanation for the change also allows staff and volunteers to present a simple, unified message to members.
Raising membership dues is essential for associations facing inflation and rising costs. Best practices include regular review and adjustment policies, reasonable increases, and transparently communicating the rationale to members. Research shows that regular and moderate dues increases do not significantly impact membership retention or acquisition but enhance revenue. By following these strategies, associations can maintain financial health and continue delivering high-quality benefits to their members.
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