Highlights
Introduction
Bruce's background in non-dues revenue
Comparing a restaurant to a caterer analogy
Convincing association executives to transform, not transact
Enabling sponsors to reach a segment of an association’s audience
How to approach sponsors to help them think in transformative ways
Educating the board on new processes
Seeing non-dues revenues in a different light
Helping sponsors understand how your association functions
The partnership between an association and its sponsors should deliver value to both parties. When these partnerships are built on shared goals and a mutual return on investment, everybody—including your members—wins.
In this episode of Learning by Association, Bruce Rosenthal, sponsorship strategist/consultant at Bruce Rosenthal Associates, LLC., walks through the importance of sponsorships in generating non-dues revenue that can be invested back into your association. In this light, these partnerships are taken from being transactional to transformative.
Full Transcript
Bill Sheehan:
Welcome to Learning by Association, a podcast brought to you by D2L, where we delve into the ever-evolving world of associations and the challenges they face in navigating the currents of change. I’m Bill Sheehan and I’m thrilled to be your host. Join me and our guest as we explore the role learning plays in driving associations forward and how it can impact every part of your organization, from recruiting to engagement and renewals to staff development, business strategy and more. So let’s dive in.
Hello everyone. Bill Sheehan, Global Head of Association strategy here at D2L, and it’s another session of Learning by Association. And today I am both honored, excited, and privileged to be speaking with a dear friend and someone I’ve admired for quite some time. Bruce Rosenthal. I’ve known Bruce for a long time. We both have a passion for what I believe is probably one of the most critical initiatives right now for associations is creating consistent and significant non-dues revenue streams. And it’s an honor to have Bruce here. Bruce is a very sought-after speaker, and thank you for making the time to speak with us today, Bruce. If you could, just give us a quick overview or background of your career with associations and particularly with regards to non-dues revenue.
Bruce Rosenthal:
Sure, thanks Bill. And thanks to you and D2L. You and I always have great conversations about our work, both on the association staff side and on the service side. So good to compare notes here and share that information with our friends in the audience. So I’ve worked for associations and nonprofit organizations throughout my career and I was working for a big association a number of years ago. They had a very lucrative, though very eclectic corporate partner and sponsor program. They had 50-year long corporate partners in four categories. They had 200 conference sponsors, logos on everything from shuttle buses to water coolers in the convention center. And they sold a la carte sponsorships. A la carte sponsorships, so webinars and white papers. And they brought in an agency to completely revamp the program, pared it down to 20 companies in two categories, year-long, no conference sponsors, sold nothing a la carte.
And the CEO asked me to run that new program as VP of corporate partnerships. And his marching orders to me was to move our sponsorship partnership program from the transactional to the transformational. And we were partnering with companies that were the leading companies in providing product and service to members. But equally important to those products and services were the wealth of knowledge that those companies had. They had trends data, they had research, they knew what the pulse of members were as well as the association did because those companies were out there designing product and service and frankly sales pitches. But to design the sales pitches, they needed to know what members’ concerns were. What was interesting and challenging, that big change over in the associations corporate partner program was 2009, 2010, just as the economy was in the doldrums. So we had companies that I knew were going to get no new business from members for the next couple of years because of the economy and our job was to keep those companies in the fold, keep them part of the program.
We were the priciest corporate partner program of any of the similar associations in that space. And other than one company that moved down a level and moved up a level during those next few years, we kept them all in. And that was really by creating, as I think about it, not so much a corporate partner program, but it was really 20 corporate partner programs, one for each company. Because we really sat down with each company and talked about what their goals were, how those aligned with the association’s goals, more importantly how they aligned with the members’ needs and developed individual programs and content and webinars and research and other opportunities for companies to provide what members needed and, frankly, for the association to monetize that.
Bill Sheehan:
Yeah. You hit on a good word too, because even at D2L mean, our whole mission is to transform the way the world learns. It’s transformational. And you touched on something too, and I think it’s still there and you and I are seeing it quite a bit. It’s the old heavy metal sponsorships, the bronze and the silver and the gold. And I think what’s happening is that’s transactional, to your saying. I think, and you touched on this from the supplier standpoint, but you’ve heard the old saying that if you’ve seen one association, you’ve seen one association. And I think it’s the same with suppliers. We’re not all the same. And when you’re looking at transforming your sponsorship, I think you’re taking that one at a time. In other words, don’t try and get them to sponsor their dinners. We get that. We understand there’s expenses and there should be sponsors and there will be some sponsors that want to help offset that.
But really what you’re doing now is saying, “Don’t try to figure it out. Go talk to them.” Sit down with them and talk to them about how do you reach this audience, how can we help? And I want to touch on something real quickly because I am just almost through the book you just wrote, which is just, I mean it’s a great read. So it’s called Mastering Association Corporate Sponsorships. And yet you talk on something here that, it’s like comparing a restaurant to a caterer. And I love that analogy. I just think that’s really, really cool and I think it would help association executives, they’re not all the same. There’s a difference. Explain that, because you do a great job in the book, but I want you to explain it. That analogy is just, to me, is so spot on.
Bruce Rosenthal:
Yeah, I do. I do a lot of food and restaurant analogies. So yeah, I think many, well even to fine tune it a little bit, I sometimes give the example if we were going to have an office party, retirement party or birthday party for a colleague, you have two choices as far as food-related services. You can go to what, here in the DC area, and maybe nationally, is Corner Bakery Cafe website. And you can go to their website and you can say, “Oh, I’d like these kinds of sandwiches,” or “I’d like the sandwich platter with different kinds of sandwiches and I’d like some extra pickles or tomato.” And then you have the choice of the cookies or the brownies for dessert, and that’s pretty much it. And it will be delivered and it will be fine. But if we go to a caterer, the caterer will not have a predetermined gold, silver, bronze, prepackaged set of sandwiches.
They will sit down with you and say, “Well, tell me what kind of party you want to have. How fancy is it going to be? Are there any food allergies involved? Do you need anything prepared in particular? Oh, and by the way, do you need any decorations or do you need someone to come and help serve that food? Or do you need music with that?” And then we look at the end of the transaction and where would we end up spending more money and have a better experience? With that caterer, not ordering off the website. And I’ve seen a lot of associations that will take that platinum, gold, silver, bronze, aluminum, styrofoam, all the different levels. I’ve seen as many as seven and basically put it on their website. And you don’t need to ask any questions.
If you have any questions you email sponsorships at xyzassociation.org, but it’s very transactional. And my team and I interview about 100 companies a year as part of our work with associations, to help them with their sponsorship programs. And I was interviewing a corporate partner a couple of years ago and he said from his standpoint, and let’s look at it from the customer’s standpoint, he gets so many of those gold, silver, bronze, platinum, prospectuses every month. And he actually said, “I am so frustrated with those.” He said, “If I get one more of those in the mail, I’m going to roll it up in a paper ball, I’m going to set it on fire and I’m going to throw it in the toilet.”
I said, “How do you really feel about gold, silver, bronze?” But it is so transactional and it is not a differentiator. And that’s where we have the difference between the online sandwich shop ordering and the sitting down with a caterer. And what I talk a lot about in Mastering Association Corporate Sponsorships is creating that catering model or really, in our space, it’s more of a marketing agency model because the caterer is very similar to a marketing agency. Marketing agencies do not offer gold, silver, bronze packages for clients. And each client comes in and whether it’s D2L or an association, it’s a conversation. It’s not, “Here’s what we offer,” it’s a conversation. What are your goals? What are your needs? What are you trying to accomplish? Who are you trying to reach? And then most of those marketing agencies would say, “This is great. We took a whole stack of notes during this conversation, let’s set another call for next week and we’ll come up with some ideas for you.”
Bill Sheehan:
Yeah. And I like that idea of a marketing agency. You probably heard me talking about how associations need to start thinking a little bit more like media companies. There’s analogies that the media companies have a subscription market, the associations have members and distribution channels. They all need advertising. There’s a lot of similarities between a media company and an association. And I think you’re touching on something too, that’s pretty cool there. Also, from that marketing side, let’s say the membership side, the marketing side, the sponsorship side, even communications, some of the others, you really got to understand the supplier’s business model and also what the suppliers, how they’re going to define what is a successful investment or sponsorship within the association.
And what’s happening is you’re trying to push these sponsors into a particular type of sponsorship package, which doesn’t mean anything to them. And I know you’ve had a lot of conversations when you’re talking to sponsors and they’re like, “Oh my god, Bruce, this is like a ray of sunshine,” where you’re just saying, “What do you want to do?” So you’re talking about, when you think about sponsorship, there is a framework that goes into that, and you touched on that a little bit in your book. Could you touch on that from the association executive’s perspective on how do you really convince the powers that be that we have to move in a different direction? We have to transform, not transact.
Bruce Rosenthal:
One of the big concerns of association CEOs and boards is speaking with the association’s mission, and that should be one of their major concerns and the reason they do what they do. And so I talk about how do you fulfill the mission? And the reality is now members need more information than ever. Things have become much more complex. So for any association, education, healthcare, local government, manufacturing, retail, there’s been a range of the 20 or 30 topics that they have always covered at their conferences that has probably not included, historically, tariffs, cybersecurity, social issues, social unrest, political issues, global changes. And associations, whether they have two staff or 20 or 200 probably don’t have all the bench strength to manage all those topics.
So just from the standpoint of education, there are very often companies that have already worked on some of those issues or done research on those issues and have answers on those issues. So talking about adhering to the mission, so we have members who need content, companies have content. As you mentioned earlier, Bill, associations need money. So expenses are increasing, whether it’s just cost of living or salaries or the increasing needs of the members. And so where is the money going to come from? Well, there are not too many associations that expect a huge groundswell of membership dues coming in. Advertising is flat, at best, and with the loss of print magazines for many associations, there’s not a lot of ad revenue. Exhibitors might be holding its own. A lot of exhibitors are cutting back on the size of the booths and all that, and grants are good, when we can get them, though that’s money in, money out. And it really leaves sponsorships and partnerships as the only viable opportunity because companies have not been cutting their sponsorship budgets, for the most part.
And when I talk to companies and I ask them about their sponsorship budgets and they say, “Oh yeah, there’s a change in our sponsorship budget. The last few years, we sponsored 30 associations a year. Next year we’re going to sponsor 22 associations. We’re going to do an ROI analysis and determine where we are getting value and we’re going to put more money into the associations where there is value.” So associations are leaving money on the table if they are thinking, oh, these companies must be cutting back. In fact, I have a friend who runs, the CEO of a small association and she told me a few years ago, one of their top sponsors dropped out. And I said, “Well, why do you think I was?” And she said, “Well, they must be cutting their marketing and sponsorship budget.” I said, “Well, if you know them well, you may have a conversation with them, a close out interview. And my guess is they’re not cutting their sponsorship budgets, they’re cutting your association out of their sponsorship budget and moving the money somewhere else.”
So companies are looking for value. I think the other shift, and you’re right, associations look at, oh, we need money for the board dinner and we need money to underwrite conference registrations. That’s a tactic. I think better to look at goals. The association needs more revenue, period. So if one can increase revenue from the, and I always like to mention that everything Bill and I talk about in these examples and case studies can be scaled up or scaled down. So if we throw out numbers or size of the association or size of sponsorship, scale it up or scale it down as you need to for your association. But if an association can move a conference sponsor from $6,000 to $50,000, as I’ve done with a number of clients, that’s a lot of discretionary revenue that can be used for anything.
So then it’s just a back end. Then just work with the accountant or the CFO to say, “Oh, we’re going to take this sponsorship money and move it over here and pay for the board dinner or use it to underwrite registration costs.” Because most sponsorship partnership revenue is discretionary. You do need staff to run the program. There are some hard costs, but it is very different than grants that are money in, money out. So take the discretionary revenue from moving companies from very modest, transactional conference sponsorships to year long partnerships, and whether an increase from $6,000 to $50,000 or an increase from $15,000 for sponsoring the logos or the name badges of the conference to an 80,000 or $100,000 partnership and then do the money moving on the back end to pay for what you need to pay for. That will be, offer the company what they want, ask them the questions, find ways to work with each company, monetize it, and then use the revenue to pay for what you need to pay for within your association.
Bill Sheehan:
Yeah, you touched on a number of important points there, and I think, you know the old saying that about 80% of non-dues revenue comes from about 20% of the suppliers. And associations, and I understand this because they are strapped, resource, time and the likes, so they like to deal with that 20% because, in their eyes, those are the raving fans. Those are the sponsors you can always go to. But that other 80%, that is a gold mine because you got to find a way to deal with those and ask, “What can we do to help you reach this audience?” That other 20%, you can always ask, “Hey, what else can we do to maximize your investment?” Part of that, one of the biggest things I think associations offer, besides networking, is education. And education should not be given away for free because it costs you money to produce that content, to disseminate that content and to upgrade that content, and that should be paid for.
And I think sponsors are starting to get a little bit smarter, understanding the expenses of an association, and maybe we can be a little bit more innovative and maybe help sponsor the LMS or even your AMS, just brought to you. Are you seeing some of that now, in your dealings, where they’re starting to look and say, “Hey, listen,” even, “Hey, we don’t need to reach all your members. I need to reach 600 of them. That’s it. Get me there and I’ll pay a premium for that.” Are you seeing that in some of the conversations and interviews you’re having with your association clients and their members?
Bruce Rosenthal:
Yeah, reaching a segment is a huge shift and it totally flips the model that we’ve done for many, many decades with sponsorships and partnerships. The more people in the room, the higher the fee. And when I was working at the association years ago, I would always have conversations with the top corporate partners on the last day of the conference in the expo and ask them how it went. And it was also often around the time we’d be talking about renewals. And there was a company that was one of our top year-long corporate partners and I said, “How’d the show go? How do things look for next year?” And they said, “We’re out of here, we are done.” And I said, “What do you mean?” We had, and again, scale up or scale down, based on the size of your association, 9,000 people at the conference, 4,000 members, exhibit hall was packed for three days.
And I mentioned that to the company and they said, “Bruce, based on what we are selling, based on the demographic of the person we need to reach, we need to reach 400 of your members. We could not find the 400 out of the 4,000 members. We can’t read name badges that fast.” And as I’m trying to think how am I going to salvage this, and I said, “Well, what if we, in the next six months, had some lunch and learns and let’s pick three cities where you really want visibility, where you have a client prospect base, do a lunch and learn on an educational topic, see if there’s a board member of the association in that city and they can host the lunch and we’ll invite handpicked list of the right 20 people for your demographic,” and before I could finish the description, they said, “We’re in, we’ll be there.”
And I’m thinking, “Wow, they’re going to read 60 people instead of 4,000.” But that’s where, to your point, Bill, they’re looking at the ROI. And this is based on what they sell, they’re thinking, wow, so if we reach 60 people, that’s going to result in, these are educational sessions, not sales pitches. We’re going to reach 60 people and we figure maybe nine of them will follow up with us for meetings and that may result in four contract proposals and that may result in two signed contracts. Mission accomplished. That paid for our sponsorship fee for the year, two contracts. They can get their two signed contracts from those 60 people, not from the 4,000 or the 9,000 people in the convention center. So I think one of the best questions ask companies, do you want to reach a segment?
And then figure out how are we going to do that in an appropriate way? We’re not just going to create, generate email addresses or mailing labels and say, “Go to it. Just bomb those 60 people with your message.” But it also involves finding the right person, senior enough person in the company. Because often our main contact that the association has with the company is the exhibit person, who may be very good at what they do in the exhibit hall. They’re probably not there, and they’re usually looking at numbers. How big are our logo signs in the convention center? How many badges did we scan?
So what I’m often looking for is a more senior marketing person who I can say, “Does your company want to reach a segment? Are you interested in doing targeted webinars, targeted focus groups, targeted lunch and learns with a segment? We will work with you. Our association is a way to do that.”Because as you said, Bill, associations really are that marketing engine, similar to the marketing agency that has access to a whole range of different audiences, though I think the association has an advantage because you have a member relationship with that audience. Whereas the marketing agency is going to have to go out and buy audiences or rent mailing lists or emailing lists. The association can say, “Oh, we can send invitations to those 60 people to be at the lunch learn. We can send invitations to the people to be at the focus group.”
Bill Sheehan:
Yeah. So you touched on something that I’m passionate about too. Most associations today, they spend 50, 60, 70, maybe 100 years building their brand. Now, technology’s been a disruptor through that and things have changed on the way you reach the members and get them engaged. And I always say the associations were the original social network. Back in the day, you had to go to events and talk to like-minded individuals at hotels and learn about what’s going on. A lot of social gathering and a lot of knowledge transfer, and it was great. But with the internet and cell phones and everything else, there was that disruptor and so you didn’t have that type of opportunity to get together and be that single source of truth, if you will.
And so I think associations really need to put a stick in the ground and say, “Hey, listen, we’re going to remind people that we are the single source of truth, that what we say is trusted, it’s vetted, it’s complete.” And I think that’s where the sponsorships really have a chance to rise, because how else are you going to reach this audience under such a trusted umbrella? And that’s why associations should not be afraid to ask for money, but if the sponsor says no, ask them, “Why not? How else are you reaching this audience?” So how would you tell those marketeers and some of the sponsorship folks and the membership folks, when they’re talking about this, how to approach a sponsor to really think, let’s think differently? Let’s be more transformational.
Bruce Rosenthal:
So I really, and I hesitate, at times, to use the word sales because of the connotation. So maybe it’s relationship sales, but I remember I have a friend who used to run a sponsorship program at an association. She was moving on to work for another association, but she was training her replacement and a replacement said, “So tell me, in this process of working with companies, how do you hook them and reel them in?” And she was like, “No, that’s what, it’s not the type of sales.” And they work really well in some sectors, but you’re right, though. Associations do have that trusted brand, but there still has to be the value there. And the big change that I saw, so I started consulting a few years before COVID, and when I ask companies questions like “Why are you sponsoring the association? Why have you sponsored for so many years?”
And pre-COVID, I would get answers like, “I don’t know, we sponsored for 20 years. We’re finger to the wind, seems like the right thing to do. We don’t want to pull out of the show and then they’ll think we’re out of business or we don’t like them or something, so we’ll be there next year.” And then associations, through no fault of their own, couldn’t have conferences for two years during COVID and surprise, companies didn’t stop marketing. And that’s when they started getting savvier on, okay, they couldn’t travel either. So how could they do online sales calls that might not have been received well by customers pre-COVID? And how could they use social media or how could they create online communities with educational information for the association’s members? So also pre-COVID, when I did competitive analyses for association clients, we’d come up with 15 or 18 others, similar to education associations or similar to nursing associations, other places companies could go.
So now we shift to post-COVID lockdowns. Companies have figured out how to use all the online platforms to do sales presentations and to talk face-to-face and have meetings and bring different people into the room. They figured out how to do online communities. So I’ve talked to companies that have said, “Well, we have an online community of 2,000 of the association’s members and we just push out educational information and we have that little link at the bottom. Would you like a sales demo? Would you like to talk to a salesperson?” So that’s how they achieve their ROI. And also then, when I do the competitive analysis for associations, now I’m coming up with 50, 60, 70 competitors and it is everything from similar associations, in some cases, very different associations. So if it’s a company that’s offering consulting services or health insurance services, they’re serving six or eight different verticals.
So all of a sudden, if that company is getting more value from the retail association than the education association, those associations are competing for the same sponsor’s attention. And companies, back to the model I mentioned earlier where they’re cutting back on the number of associations they sponsor, they’re not necessarily going to sponsor all 30, 40, 50 associations in that sector, national, state, competing. They’re going to say, “Yeah, if we’re getting more value at the retail association that’s meeting our ROI, we’ll show up and maybe do a small booth at the other association, but we’re not going to spend a lot of money there.” So it’s become much more competitive and companies can now reach and teach on their own, and that is a huge change because when I was working with the association back 10 years ago, if a company wanted to reach and teach, it was like, “I’ll give you the list of rules. You can submit a proposal. That proposal will go to a committee, then it’ll go to the scheduling committee, and I think we can get your webinar up there in six months.”
And now the company is like, “Wow, we’ve created that online community of your members and we can get a webinar out there in six weeks and promote it and get more people.” So I was doing an interview with, or an exploratory call with one of my client associations and one of their corporate sponsors a couple of years ago, and were talking about ways we could feature the company’s expertise and position the company as a knowledge leader. And the association CEO said, “Yeah, we could get you on some of our webinars. You could have a seat on the faculty. We probably reach 200 people on each of our webinars.” And the company said, “Well, that’s interesting. Our company does webinars and we reach 800 to 1,000 people.” And I thought, is this going the wrong direction real fast? But then the company said, and this goes back to your comment earlier, Bill, about the association being a trusted leader. The company said, “What we lack on our webinars is independent thought leadership. Even though these are educational webinars, all the people on the webinar are our company’s execs.”
So what if the association CEO or board chair or committee chair or staff expert, subject matter expert was on our company’s webinar, reaching 800 to 1,000 people? A win for everybody. So again, this is where the association can monetize this. Sure, we’ll do that if you’re a top level, year-long corporate partner, and the association’s reaching a larger audience. So it’s not an either/or. There’s definitely room for the associations webinars, but for the association to work with the company on their platforms. And actually one of those relationships became so successful that the corporate partner company called and said, “We’d like to do a video on the success of this partnership. Could the association CEO be available for an interview with our company’s CEO? Because we want our customers and shareholders to know about our alignment with that trusted source.
Bill Sheehan:
And see, I think that, to me, is really more holistic than we’re even talking about because now, all of a sudden, because of this conversation you had versus a monologue, here’s our sponsorship, pick one. You actually had a conversation and what came from that is not only the chance to maybe increase sponsorship and define what the success looks for return on investment, but now you’re even getting further out to saying, now we’re almost helping with membership acquisition.
You got other people that are not familiar with your organization but are familiar with that supplier. Never knew about this association or didn’t know much about it. So just those conversations begin to touch more than just non-dues revenue, but you’re looking at membership engagement, you’re looking at membership acquisition, you’re looking to increase membership renewals as well. So I think it really all starts with that conversation, when you really want to go in and start asking and considering what you need and what your sponsorship could do and what you can bring together. How does an association executive begin to, say, step away from their day-to-day stuff and say, “I got to think differently,” besides reading your book? How else could they do that?
Bruce Rosenthal:
I think that one of the challenges, and you touched on this earlier, Bill, when you asked where’s the pushback from association CEOs and boards? And sometimes when we start or we mention the idea, “Oh, let’s have conversations with companies,” then it’s like, “What if they ask for X, and we can’t do that? What do we do then? Then we’re really in trouble.” No, you’re not in trouble. Maybe the deal works and maybe it doesn’t. And that’s a very different mindset because I think historically, it’s like we got to go out there and sell 100% of the sponsorships that we offer to companies. I’ve worked with a lot of associations where, sometimes it works really well, and other times it’s like we’ve had four conversations and the company just, they want to co-brand stuff and they want exclusive rights to research, and the association’s mission and needs of its members come before anything else.
And if those requests from a prospective sponsor, partner company do not align with mission and member needs, it’s like, let’s just step back and say to the company, “You can buy an ad, you can get a bigger booth. We hope to see at the convention, maybe we should talk again in six months.” That’s a different model than to what we have historically done because I think the other hesitation is then, when I talk to folks like directors of sponsorships, it’s like, oh, so then I need to go into my boss and say, I just turned down a $50,000 deal because it didn’t work? And it’s like, right, you did. Because the greater integrity of the program is not undermining it with something that’s not in alignment with the mission and the needs of its members. So we need to recognize that all deals don’t work and that having those conversations with companies, and the CEO of the association where I used to work pointed out, what should be the obvious, the association’s members and the sponsor’s customers are the same people.
We’re all talking to the same individual. So finding out what those member customers need and working on those solutions together. And I think what we’re seeing now, and often in the interviews that I’ve been doing with corporate partners for association clients the last six months, I’m asking about, “So things have changed in Washington the last six months, you might’ve heard. Tariffs, executive orders, changes in grants, how’s that affecting your company?” And the answers vary, but what I’m hearing from some of the companies is, and they’re comparing it to COVID, “We want to be here and help members in the time of need.” So whether it’s looking for cost saving solutions or strategy solutions, the companies recognize, in many cases, the sales are taking longer because budgets are being trimmed down, whether it’s any type of member organization and any association, but companies are saying they want to be there in a time of need.
So I think one opportunity for associations to latch onto that, and I assume many associations have set up in the last six months, a task force. How do we deal with tariffs? How do we deal with how DEI is affected? Changes in DEI regulations are affecting our space? Bring in the corporate partners to be on the task force. Ask them to sit at the table. They will, I think, know from that invitation they’re not supposed to be bringing a PowerPoint and sales brochures. Be part of the conversation. Your company manufacturers, you are providing product to our members. Our members are concerned that those products might cost more. Come and be on the task force and talk to us about the impact of that. Treat them as partners.
And I’m working now with a client who, a colleague and I had built their corporate partner program a year ago, and the association called and said, “The program’s been out there. We’ve been implementing it for a year and a half. Could you do interviews with the companies and ask them how they like the new program?” So these are confidential one-on-one interviews and what the companies are saying, they’re not saying the new program is perfect, but they’re saying, “We feel like a partner. We’re part of the conversation. They are asking for our input,” and in some cases, unsolicited, they’re saying, “And we’re not getting that from other associations.” So we talk about the competitive advantage, the associations that are out there with a better offer, with an offer to collaborate and truly partner with companies are the ones that are going to benefit.
Bill Sheehan:
Bruce, and I’ve heard you say this, and I’ve been in conferences where you said this. The suppliers don’t want to just be at the table, they want to have a voice. And now I think, and I think COVID was the catalyst for this, but I think now more than ever, there’s a much more openness of associations working with suppliers. Because back pre-COVID, we always joke the suppliers wanted you to be successful. Yeah, that’s why we’d sponsor you. Now when COVID hit, we said, “Oh my goodness, we actually need you to be successful because if you guys go under, we go under, because we need your membership and access to the membership.” I think now, associations are starting to get a little smarter when they’re going to talk to suppliers and even the board of directors that, “Listen, we need so much money to make this stuff work.” I believe that somebody who has to be behind this just as much is the board. The board has to start thinking, we got to start thinking like a company. Do you work with associations on saying, “Hey, we need to educate the board?”
Bruce Rosenthal:
When I work with associations, we usually interview, we’d like to interview all three stakeholder categories, staff board and the corporate sponsors. And we do those interviews for two reasons. One is we get really good information. What is sponsorship value? Similar questions for each of those three stakeholder groups. Why should the association have sponsors? What sorts of benefits could you offer? But the second reason we do the interviews is so they’re part of the process. And it’s just human nature. If we go back to any of those three groups afterwards and say, “We’ve been working on this for four months, here’s the new partner program, hope you like it.” Any of those groups, staff, board or corporate partners are going to say, “Oh, you developed that all by yourself and never asked me about it?”
So we build that engagement from the beginning and then when we do recommendations reports, we’re often asked to do those presentations to the board also, so that they understand that it is very competitive, companies have choices, the importance of mission and members come first. In fact, one of the first things that we do when we start working with a client is put together guidelines, and there’s a link in the book to some bonus content. And one is a set of model guidelines. So it is very clear from step one, here are the guidelines, here are the types of companies that can and cannot be corporate partners. Corporate partners can’t be involved in legislative or public policy or whatever the eight or 10 guidelines are. And that information is developed and shared with the board and staff first. So they understand here are the guidelines. We’re not just selling everything to anybody and we’re not endorsing products.
Here are the guidelines. And then we share that information with the corporate partners and we say, “These are our guidelines. And by the way, look at the last guideline on the sheet. The last guideline is if the partner company violates any of these guidelines, the CEO of the association has the authority to terminate this partnership immediately.” I’ve never seen it come to that, but at least that makes it very clear to the board and to the staff up front, these are the types of companies we will partner with, how we will partner, and this is what is a violation of the guidelines. So it’s very clear to everybody up front that we are looking for true partnerships, but the interests are very integrated.
I was invited to an association’s corporate advisory council meeting a couple of years ago. It was in the healthcare sector, a specialty group of doctors. And the folks around the table were the association’s board and senior executives from each of their 10 or 15 top tier, year-long corporate partners. And the discussion for the hour is what are the major challenges facing our profession of doctors? So they went around the table with board members and corporate partners answering that question on the biggest challenges. If I had been blindfolded, I would not have known who was answering the question because they identified the same issues. So then their next step after identifying the top issues was to divide up into task forces.
So let’s have a task force with two corporate partners and three board members to work on a communication to insurance companies on how their policies are inconsistent with providing quality care for their insured, our patients. Or here, let’s get these three folks together, five folks to go and talk to a federal agency on how their regulations are impeding quality care. So that is partnering, that is, as you said, Bill, being part of the conversation, not being asked to sponsor the conversation. So it’s not asking, “Oh, could you send us $5,000 for lunch for our task force meeting?” It’s come to the advisory council meeting and share your expertise. And then I think that’s when board members begin to see, yes, there is real value. We could not do this on our own.
Bill Sheehan:
When the suppliers come to the table, like you’re saying, and you create that dialogue, they’ll tell you what they will pay for. All you got to do is provide that. So you’re not even asking. You’re actually creating a symbiotic relationship with them. Non-dues revenue, for some reason, always had a negative connotation in the industry. Oh, we can’t ask members for our money. We can’t do that. We’re a nonprofit and the like. So two things. Are you seeing that start to change? In other words, we don’t have a choice but to really go out and generate non-dues revenue and we need to think differently. So are you seeing that change in the way non-dues revenue is perceived?
Bruce Rosenthal:
The first one, yes. There is a change, I think, for the better. I was interviewing the CEO of a client association, it’s an association in the nursing space, he’s a trained nurse, CEO of the association. And we were talking about what is sponsorable and what the opportunities were in the association. And throughout the interview he keeps saying, “And we need to monetize that and we need to monetize this.” And then he said jokingly, he said, “Well, but I’m just a nurse. What do I know?” He’s a nurse running a nursing association, and he recognizes things need to be monetized. Now he’s got a CFO to make sure that they’re in alignment with how much non-dues revenue and if they need to be involved in UBIT and all that, but he recognizes, like that marketing agency, they have a huge communications operation there.
They have multiple communications channels, they have subject matter experts, they have segments of members that are incredibly important to companies and it’s a huge communications empire that can be monetized with the right guidelines. And in fact, most of that is not subject to UBIT because from my non-lawyer understanding of UBIT, if there’s not an inducement to purchase, if it’s not like, “Come to our company’s webinar and we’ll give you a 10% coupon on your next purchase,” then it’s not subject to UBIT. So you can get $500,000 from a corporate partner for a sponsorship program, and when I worked at the association, sponsorship fees weren’t quite that high. The only thing we would do is we would segment the revenue coming in. So if it was $150,000 partnership and 10,000 of that was used for the booth for the conference, sure, the county folks separate that and we’d pay the UBIT tax on that. But the other 140,000 …
Bill Sheehan:
That’s right
Bruce Rosenthal:
Was not subject to tax. And the other metric is the association, at that time, was bringing in about $1.8 million from corporate partners. I was the only full-time staff person. So do the math on whatever my salary, benefits, travel, overhead was. Most of that money was discretionary revenue. And like many associations, the most valued department on staff was the public policy staff, which brought in zero revenue. So there were valued lobbyists on that association staff, and it was a revenue from the corporate partners who were paying for those lobbyists. So that’s where, again, not compromising mission or member needs or member value, but explaining to boards and CEO, do we want those lobbyists? Members want those lobbyists, we need those lobbyists. How are we going to pay for them? We probably can’t do a GoFundMe campaign for lobbyists. And instead of doing a nickel and dime, oh, can we get $3,000 for the board dinner? Let’s get $100,000, $200,000 corporate partners with discretionary revenue to pay for those programs.
Bill Sheehan:
Right. Yeah. And that starts with a conversation. They have to understand the association and what it does because you’re touching on something too, that I think is important. And in your book, where you invited a sponsor in to the association and they spent the day there and they had the continental breakfast, and then they met with the CEO, and then they went and met with each department. And if you think about that, and I’ve been in both trade associations and professional societies, where you have individual members and trade corporations. And a lot of times when they’re either frustrated or not renewing, the answer is, “Well, we didn’t see a return on investment or return on our value.” And the question is, “Well, what were you were expecting?” And we do all that stuff. I never knew that. And so I think in your book you touch on that. I think the sponsors, don’t be afraid to bring them in and show them how the sausage is made, but expose them to the association.
Bruce Rosenthal:
Yeah, the association probably had about 50 staff in the headquarters office, and I would invite corporate partners in. And it also gave the opportunity, because the companies would often send two, three, four folks. So we’d have more contact than just the primary person that I was in touch with on a regular basis. And yeah, we’d start off with bagels and coffee with the senior staff and then a private meeting with the CEO, and he would sit back and he’d say, “Well, what are you hearing from our members?” And we’d hear all sorts of good information and the companies would ask us questions. And yeah, then I chunked out the rest of the day. Let’s talk to the education staff and the social media staff and the public policy staff. We’d talk about the big public policy issues facing the members. And the companies, it was a wealth of information. And again, comparing this to a marketing agency or PR agency model, I mean here in DC, there are companies that are paying hundreds of thousands of dollars for that expertise.
Bill Sheehan:
Oh, yeah.
Bruce Rosenthal:
Because I remember when I worked for association, sometimes I would get calls from some of those marketing agencies saying, “Oh, we have a client who’s in DC and they need to know about your profession. Could you come and meet with us for an hour?” And I’m like, I’m giving away my time so your company can make big bucks meeting with this client. Lets us be like that agency and bring those companies into the office. And we would often, and actually the one other part of the day that we got staff to attend because we provided lunch, which was always a good enticement, is a presentation by the company. And I would coach to all staff and I would coach the companies ahead of time. Don’t start off with your first slide talking about the history of the company and the second slide, talking about your org chart and all that.
Start with a slide with a case study of how you helped a member, and whether your company is a bank or a technology company or a developer or cybersecurity, whatever it is, talk about a case study of how you are helping members. And at the end of one of those presentations, the VP of education for the association pulled me aside and she said, “You know, what that company said was really interesting. I’d like to get them on an education panel at our conference that’s coming up in six months.” Yes, that is what we were talking about. That is talking about partnering. So I think it also conveys to your earlier, good point, how do we get staff involved? This is all staff recognizing the value of companies and how they are helping members.
And we’ve talked about ROI a couple times. I think in those exploratory discussions with companies, we can ask them what their ROIs. How does your company define success? Now, if the company says, “Oh, we need to sign contracts.” How are you going to get us signed contracts?” Association doesn’t do that. We don’t sell for you. But if you want to be positioned in front of the right audience or if you want those contracts around a new service that you’re offering, we can do some case studies and push those out to members. So your company needs to educate to sell, not sell to educate. But knowing what their ROI is, and I think that’s also where some associations are like, “Oh, what if they say they need 20 contracts?” Well, then you can say you don’t know if they’ll be successful. You need to come up with something that’s reasonable. But having those discussions and if nothing else, showing interest and empathy in the company’s goals, their objectives, where they’re going this year, what challenges they’re facing because of executive orders goes a long way in building the relationship.
Bill Sheehan:
I agree. It’s really about developing a genuine curiosity of your members. Because if you’re just trying to force them in to make checking off the bronze, gold, silver, and what have you, it’s never going to work. That company needs to drive revenue every day, and we’re going to find a way to do that. If you can help us and educate us and open these opportunities for us, we’ll pay a premium and we’ll be a raving fan. But if you’re trying to put me in that thing where you get a full page ad in the magazine or the digital magazine and you’ll sponsor the board dinner, those days are over. As we close up on this, Bruce, and I don’t want to put you on the spot, but if there were one or two things, if you had to go into an association and say, “You got to go from transactional to transformational,” what would your advice be?
Bruce Rosenthal:
I think that a couple questions for staff, and this could be done as a board exercise also, what do members need? What information do they need? Are there new topics that are being covered? What do members need to be successful? What does your association need to be successful? And has your association done a competitive analysis? Because I find a lot of associations, so you’re absolutely right, Bill, associations have huge amounts of brand equity, but most associations are no longer sole source. And a lot of this is the post-COVID. Now that anybody can reach anybody anytime on Zoom, Teams, whatever, and they can reach and teach and they can be pushing content out there on social media all the time, we need to be aware of the competition.
And I think we see this just even within the association space. And I think maybe useful to ask association staff, “Where do you get information? Is it from a certain association? Is it a niche association? Are you the HR director? Do you get most of your information from [inaudible 00:49:08] or are you the marketing director? Do you get most of your information from, is it from the big association in our space or is it from a marketing association? Or is it from a listserv? Or is it from an online networking group of marketing folks that meet every Tuesday morning?” So I think we can look inward. Where do we as association professionals go for information? And then to look at our members, where are they going? Are they always coming to the association? And if not, are those members sometimes among the 800 to 1,000 people going to the corporate partners webinar? And can we partner with those companies? Because I think, because it is the wide open spaces of reaching and teaching everywhere, anytime, 24/7, how can we partner with companies to meet the needs of members?
Bill Sheehan:
Bruce, it’s been a very fast hour, as always. I really can’t thank you enough. And again, I just want to do another shout out to your book and congratulate you on this, that Mastering Association Corporate Sponsorships: How to Create Strategic Partnerships that Add Revenue and Member Value, and I can’t think of anyone better to write that book than you. You’ve had so much experience in doing that, and it’s been an honor, and I really appreciate you taking the time.
Bruce Rosenthal:
Thanks, Bill. Glad to do it. Folks who want the book, it is on Amazon, Mastering Association Corporate Sponsorships, and definitely I think a good read. And we really designed it in two sections. It’s the why, why should we create sponsorships? And then the how. And based on that restaurant model, if we wanted to open a restaurant, why? What does the competition, what does the neighborhood need? What do the clientele in the neighborhood need? And get the board involved in that discussion. And then how. How do we really put it together? How do we price? How do we reach out? How do we do those exploratory calls with companies? So I think it’s designed as a quick read, good for the sponsorship director to read it. And then the next stop would be to the executive director or CEO and say, “Boss got a book for you to read.”
Bill Sheehan:
Yeah, and it’s a great read. I’m telling you. I mean, you can burn through that pretty quickly. And I go back and highlight. It’s really excellent and it brings back some very fond memories when I was in the association space and how we’re doing this. But I think you touched on something too, the why and how are so critically important. And I really believe if you understand the why, you can figure out the how a lot easier. It’s been an honor.
Bruce Rosenthal:
Thanks Bill.
Bill Sheehan:
Bruce, I really appreciate this. You’ve been listening to Learning by Association, a podcast where we delve into the ever-evolving world of associations and the challenges they face in navigating the currents of change. This episode was produced by D2L, a global learning innovation company, helping organizations reshape the future of education and work. To learn more about our solutions, please visit www.d2l.com and don’t forget to subscribe, so you can stay up to date with new episodes. Thanks for joining us, and we’ll see you next time.
Speakers
Bill Sheehan
Global Head, Association Strategy, D2L Read Bill Sheehan's bioBill Sheehan
Global Head, Association Strategy, D2LBill is the global head of association strategy at D2L. With more than 25 years of association experience, he has served in a senior executive capacity with several associations and held senior executive positions with large association services companies. His expertise lies in helping associations improve relationships between associations and their members to increase relevancy, engagement and non-dues revenue.
Bruce Rosenthal
Sponsorship Strategist/Consultant, Bruce Rosenthal Associates, LLC. Read Bruce Rosenthal's bioBruce Rosenthal
Sponsorship Strategist/Consultant, Bruce Rosenthal Associates, LLC.Bruce Rosenthal is a strategic advisor, consultant and educator with over 20 years of experience advancing corporate sponsorship programs for associations. He helps associations grow revenue, increase member value and drive sustainability. Bruce is the author of Mastering Association Corporate Sponsorships and a leading voice on association-corporate relationships.