How Associations Can Drive Growth With Non-Dues Revenue With Sean Soth

Full Transcript

Bill Sheehan (00:00):

Previously on Learning by Association.

Sean Soth (00:03):

It’s not just about non-dues, it’s also about non-dues in the stratosphere of strategy.

Bill Sheehan (00:11):

Sometimes that board can say, wait a minute, you can’t all of a sudden start charging for something that you’ve been giving away for free. And if you guys come up with a product under the auspices of the association, well, that should be given away to the members as part of their dues. And the fact of the matter is, that’s just not true anymore.

(00:32):

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 occurrence of change. I’m Bill Sheehan and I’m thrilled to be your host. Join me and our guests 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.

(01:02):

I love when I hear that word, entire industry, because that includes… It starts from the staff and then you’ve got your members and then you have your suppliers, and that makes up the whole ecosystem. And when you’re talking about developing strategy, sometimes for association, staff, it’s incredibly difficult because you’re so close to the problem. And it reminds me of the old saying from Albert Einstein that no problem can be solved by the same conscience that created it, right? And you need to step away, but when you’re so immersed in day-to-day activities of an association, sometimes it’s really hard to see beyond the horizon on where we can move. And I think that’s where associations really have to lean on the suppliers within the industry, reach out to them because they are the industry. They supply products and services for your industry to make it functional.

Sean Soth (01:54):

For 40 years, we haven’t really learned how to do that. I’m just saying 4., I’m picking a number out of the hat there. It’s like if you could… The most tenured person I’ve met through PAR is 40 years. And I would say that in 40 years, that hasn’t really been a priority. It’s not the association’s fault. It’s not like we’re doing things wrong. We’re doing things the way the market intended. It’s like where would we be without ASAE for great association management? Where would we be without PCMA setting standards for excellent meetings and conventions?

(02:34):

Those are critical foundational posts of our market, but what makes them unique is the way that we collaborate. When I meet associations who are struggling, it’s not that they don’t have all the right pieces, it’s just we’ve never really prioritized how business development leads to sustainability. We’re working right now on a proficiency model and how do we help people at every stage of their career within the association. So entry, intermediate, on up even to include your board. And in that process, you’re looking at it, you go, we’re really great at managing teams and projects. And to be honest, like you said, wearing a lot of hats, doing more than the average bear. But that sort of function and operation, we’re the only market I can really think of where sales continually supports operations. If you go to commercial, operations always supports sales.

(03:41):

And that’s a unique dynamic to just explore and begin to share best practices around. With a few tweaks, most associations, even high performing ones can be better, and that’s where I think we’re all headed. I mean, we have to stand out in a really competitive marketplace for member attention and supplier attention. And even suppliers, some of them are large enough to host their own association type-

Bill Sheehan (04:14):

Correct. Yeah.

Sean Soth (04:15):

… meetings.

Bill Sheehan (04:16):

Yeah, particularly the publishers.

Sean Soth (04:19):

Yes.

Bill Sheehan (04:19):

They have the same audience as an association does. They don’t have the restrictions that association does, and they’re going out and they become basically a competitor to the association and vying for, your members, not only share of their wallet, but we’re an attention economy. How do we capture their attention, the members’ attention and prospective members’ attention? Because these other competing organizations, not just other trade associations or other associations, but other corporate companies are vying for that same dollar that you’re getting.

(04:53):

And I think this is where associations have a bit of a unique position in that they can rise above the clutter. There’s been surveys around all over that people don’t trust the media anymore. They don’t trust social media anymore. They’re not sure who to trust anymore. But one that is rising is the association because it’s made up basically of subject matter experts within the field. All the raw information that comes into an association, be it from magazines, be it from research, white papers, webinars comes in, but it’s vetted by subject matter experts before it’s disseminated out to the membership. And I think that’s where associations can really rise and become that single source of truth and rise above that.

Sean Soth (05:40):

You’re 100% right. The value proposition for associations is unbelievably strong and important. Even for our small folks who maybe have really tiny teams, most of the time, if not all the time, the work that they’re doing is qualified. It’s not just finding its way through a feed or AI or something like that. Maybe some of it is, but in general, you’re qualified. You’re meeting other people who do what you do. And one thing that we do some coaching on is purpose, which sounds funny. If you talk to a commercial organization like, all right, well, what’s your purpose?It’s to move units.

Bill Sheehan (06:26):

Dive into that a little deeper because I think that’s really, really important for associations, I mean, every staff member to know the purpose of the organization.

Sean Soth (06:38):

So purpose. I don’t remember the gentleman’s name, but it’s a great little TED Talk. Search, “TED talk purpose.” And he says the quick way to define purpose, which is that one of the chief causes of burnout, is when we don’t know what our purpose is in the work, is to simply say, what’s the work we do? How does it change the audience we serve? And then you could switch audience to team, membership-

Bill Sheehan (07:15):

Committee.

Sean Soth (07:16):

… customer. Sure, yeah. And committee, right. Board. So how does it change? Hopefully for the better. The people we work for, there’s your purpose. And then value comes in, just simply, are we delivering more than the cost of the whole enterprise? So you’ve got these tremendous opportunities at associations and that’s the part that we just haven’t… In my experience, we just don’t really talk about it.

(07:54):

We’re like an engine. In that engine, it’s, okay, we just finished annual. We’re planning next year. Next year’s annual, we’re going to the Tri-Cities and we’re moving and… That’s planning. And hopefully between this year and next year, you close more attendees, more exhibits, a couple more sponsors. But hold on a sec, what if, between next year and this year, You define how much of an impact you want to make in the market? So I see associations doing this really well, things like their impact on the workforce, their impact on compensation and professionalism, obviously standardizations, things that really change the way an industry moves, operates and even has its own impact on the communities and members they serve. It’s pretty awesome, man. You get to meet some… The association has these great stories.

(09:02):

A couple of years ago, I am an admirer of a dear friend in the association space, Christie Tarantino. She’s the chief executive over at Institute of Food Technologists. So I got to check out their show. Never been, didn’t understand what a food technologist was at the time. And I’m sitting in the audience and I’m just trying to… I’ve never been, I don’t know anyone. I kind of turned to the gentleman next to me. I go, “So have you ever been to one of these?” And he goes to me, he goes, “Man, I’ve been to 20 of these.” And I go, “Oh, well, are you a food tech? Are you in food? What’s your role?” He’s like, “Actually, my wife is. I’m her guest and she’s going to be speaking soon.” And I go, “No kidding.” I go, “Did you look at the speakers of the show?”

(10:03):

The lady we were about to see, her mission was to help feed the astronauts eventually going to Mars. That was who was going to open the show and talk about why their work and the work of innovation like that is so critical to everyone. And he goes, “Yeah, that’s my wife.” It was unbelievable, man. And then we got into what his… He was an engineer, I believe, and we started talking about associations in that space. I mean, associations have just this remarkable business strength and value proposition in the markets they serve, and that’s just one quick story. All of us have moments like that. Do we capture them? Do we share them with our teams, man? Do we make sure the teams understand why that’s important? Those are the things that we really are passionate about in the resources that we’re trying to build.

Bill Sheehan (11:06):

Yeah. I think you, again, touched on something that’s so vitally important within the association community today. I think that if you were to go in…. And I’ve worked in both trade associations and societies. If you were to go into a trade association that has advocacy, they have government relations, and you were to walk through and just to the C-suite, the VPs, and ask them, what’s the purpose of this organization? You’re going to get seven different answers. The person that runs the events is going to say, well, we bring buyers and sellers together to promote. You got the government relations saying, we’re making sure that our industry is protected and the policies and procedures that the government is putting in place are positive for our industry. You talk to membership, they’re going to say, our goal is to grow and… You’re going to get different reasons for what does your association do.

(11:54):

And I think where they fall short is there’s not a single purpose, like the mission statement for lack of a better term, but really the entire association from the person that answers the phone across all the departments at every level has to have the same answer. The responsibilities of each one of those departments is different, but the reason they do it is to meet the purpose and mission of that organization. Once you understand that, you’re right, you now understand why you are doing what you do and you can figure out better ways to how to do that.

But I think that’s where there’s a huge… There’s turnover in this association space right now. It’s tough. There’s a lot of churn in the association space, and that really puts associations in a bad spot because of the disruption cost that it causes for that.

(12:50):

And I think what happens is, the associations are so busy sometimes they can’t step back and look at things objectively saying, whoa, slow down. What is our purpose? Why do we do this? Are we trying to maintain membership? Are we trying to ensure that… The next event where we hold, are we trying to ensure that our education and more and more folks are involved in education? There’s no clear role of the organization because, at times, the board can change those, right? They can change some of the initiatives. And I think now, more and more associations are becoming a little bit more smart and not being board driven so much as the board can review and dictate policy and the staff will then implement that policy. I think what’s happening now is that shifting a little bit where the executive, the C-suites are saying, hey, here’s what’s happening in the industry and here’s why we have to change our course of action to meet these.

(13:47):

And I think that’s also where non-due revenue comes in. Now we’re going to act and operate entrepreneurially and like a corporation, but under a tax code that benefits us on certain taxes. And I think that’s where associations are starting to move. And your point on looking at understand your purpose and develop a strategy, not a plan, I think is a huge distinction.

Sean Soth (14:14):

It opened my eyes. When I was introduced to Roger Martin as a thinker, I had never really thought of selling. No one likes the word, right? I remember one time, it was a couple of years ago in Nashville at an ASAE meeting, awesome speakers were talking about how to… The Unsold Mindset was the name, I think, of their session. One of the first things he says is, “Think of the best salesperson you’ve ever met,” and a lot of the audience went, “Ah.”

Bill Sheehan (14:52):

Yeah.

Sean Soth (14:53):

And I was like, hold on, man. The best salesperson you’ve ever met is probably the best CEO you’ve ever met.

Bill Sheehan (15:00):

Yeah.

Sean Soth (15:01):

And part of that is, they’re able to guide constituents. Whether that constituent is a board member, whether that constituent is a business partner or a member, they’re able to guide them through and align them with the purpose and strategy of the organization. And so that’s great business development. That is 21st century modern business development where it’s consultative. We’re approaching the work with purpose in mind. Even when you’re selling a booth or an ad, what would those non-dues elements… What does that mean for the client on the other end? And if you can help them connect to the value, it would be a multiplier. I mean, it doesn’t even feel like you’re working towards just… It used to be like, let me present the information, you negotiate. And I get it’s important to understand those stages, but the purpose-driven folks are really setting the tone in their work that will help you compete with the commercial organizations where their value is more along the lines of speed, creativity.

(16:31):

Their sales people are getting off the phone going, “Guys, guess what. New idea. We want to set up a speaker theater inside the expo hall because 10 of our sponsors have asked about thought leadership opportunities. Can’t put it into the program, but we think we can make it exciting in the expo hall.” And they do it quickly. And if you were to get off the phone on the association side, you go, “Okay, again, sales supporting operations.” So what does that mean? You’ve got to convince the event team. I got to convince the C-suite that it’s okay. I got to talk to… How are we going to support it? What are the times? Who’s going to manage that? All of a sudden, you talk yourself out of a hurdle. 35% roughly of all non-dues projects fail because of a lack of internal opportunity.

(17:29):

Most associations with solid business development teams, when they get started with a scenario like I described, they don’t want to move it forward. And so that’s really just because it’s just too much headache. By the time you do all that, you’re like, I could’ve sold or done or reached or helped, or whatever.

Bill Sheehan (17:51):

It’s the inertia. It’s the inertia of staff, right? Because you just touched on a point that I like, if you come up with a business development, then you got to go talk to marketing communications, “How are we going to do this?” They’re going to ask a million questions. You got to convince the suite, you got to convince your committees. And then you’re just like, you know what? We’ll look at this next year when we have a little bit more time. And to me, that is what’s causing associations sometimes to say, “Ugh. God, this is tough.” Because as you were saying, everyone, when we think of sales people, we’re like, “Oh God, they’re going to promise me the world and can solve…” And no one likes to be sold, but everybody likes to buy. And the thing about that now with associations, I think, is instead of trying to come up with a new strategy or a new product or services, reach out to the vendors, reach out to your suppliers like a D2L and say, “What would you like to do within this audience? How can we help you reach audience?”

(18:48):

I will say PAR does that to us all the time. You guys say, “Hey, where do you need to be? How can we help you get there?” And from that point on, we’re committed because if we’re developing that campaign or working with you, how can we say no? It’s not a sale. We’re working in alignment, right? So I think what associations have to do now is, don’t be afraid to go out to the supplier community and ask them, how can we help you reach this audience? And the old saying is that 80% of your non-dues revenue is coming from 20% of your suppliers. What are you doing with that other 80%? They need that. They’re still in the marketplace. They want to have a level playing field. Reach out to them, and that begins to generate net new revenue.

(19:33):

We have budgets and those budgets may be committed but not spent, so we can reallocate funds. And if you’re opening up an avenue for us to reach an audience, that’s a wonderful way to not only generate significant but consistent non-dues revenue, because now they’re telling you how we’d like to do this. And that alleviates, I believe, some of that inertia that you have to go to your executive committee or you have to go to your board or you have to go to the C-suite because you already have a company that’s saying, “Hey, if we can do this, we’re willing to pay for that.” And I think sometimes, to your point, that strategy, you really have to step outside your day-to-day. And I think that you’ve been doing that, not only at PAR, but also at the society that you’re at now.

(20:20):

How do you do that with your staff? I mean, you’re kind of at that C-suite level and people, I know, are coming to you and you’re going to them. Do you have some advice how to overcome that inertia, that I don’t want to go have to pitch it to these-

Sean Soth (20:35):

The craziest and simplest way… This is the most effective tool for that kind of change in implementation. We don’t always get it right, and everyone who would listen to this or everyone… All of us are going to make mistakes, but it’s the feedback loop. Even before you get started on something like that, I find that we do a lot of starts and stops. It’s an inefficient use of time and it’s actually a project killer. So to move things forward, just start literally with a feedback loop of every… Let’s just start monthly. Let’s just say that. We’ve got a project coming up, we want to transform the way our conference went. We’re going to have a meeting about that on the first Thursday of every month. And then as we get a little closer six months out, we’re going to do it twice a month.

(21:38):

But in that meeting, here are the things I want us to be thinking about. Are we reaching our purpose? How are we performing? How do we increase the performance of the work we’re doing? And are we taking in the perspective? So the things you’re talking about, you mentioned 20% of the suppliers are creating 80% of the revenue. Do you know how valuable the 80% could be not only for non-dues revenue, but how about membership revenue? How about being advocates to bringing in new members across the enterprise? They’re unbelievable advocates if we work with them that way, but chances are we’ve got limitations. And when you start making… For the people who are like, “Well, we don’t want to make any more money,” well, I understand that, too, but what if you can invest that back into the business development function? And you’re doing great things in membership, you’re doing great things in conferences. What if you were the leading choice in your market for bringing solution providers and members together for solutions?

(22:47):

That’s just it. There are other ways to invest when you hopefully have a surplus. And so we talk about all those kinds of things. I would be remiss if I didn’t bring up one thing, and you mentioned it too, is just a lot of C-suite folks struggle with… The team I have now could be folks that were never business developers. They may have been forced into that role or sort of begrudgingly accepted to take it on. They could’ve been from another department or they could’ve been outside of industry and need to understand where to go. So they’re working through this team, right? Do I have the right team on the bus, or whatever, people on the bus, right?

Bill Sheehan (23:33):

Right. Yep.

Sean Soth (23:35):

And so you’ve got this thing. Can we train them up? How do you train them up? What would you train up, or do we need new people? And if we had new people, then you’ve got to bring them up to speed quick, and there’s no way they’re going to learn the 70 projects we work on, blah, blah, blah, all the things, right? If you had a strategy, it can inform your workforce choices.

(23:57):

So let’s just go back to being the best choice in the market for the suppliers and the members. If that is your overarch, if that’s the number one strategy, it would inform everything. Does this unit and the way they’re supported, by the way, give us the best option in the market? Use it to inform those choices. It makes hiring easier because a lot of times, people go, “Hey, do you know someone that is great at BD?” Well, sure, but that’s not the only piece of the puzzle when we’re talking about the kind of work that we do. Strategy can inform the positions, the development, the programs, everything that we need to get our teams and our organization where we’re operating at least our full potential for now. That might be different two years, three years from now. Maybe our potential looks even greater or changed or evolved from there, but it’s a great starting point.

Bill Sheehan (25:07):

Yeah. And I kind of want to wrap a little bow on all of this right now, and you have kind of touched on this throughout the program, is strategy is so critically important and you have to have the buy-in. And sometimes I think for associations, it’s like, but where do we start? How do we begin to develop a strategy? And I think if you’re looking at non-dues revenue, there’s really two sources that can come from, your vendors or your members. That’s who it comes from. And so when you look at your industry, and some industries might say, “Well, we don’t have a trade show,” but you do have suppliers in that industry, I guarantee you. And those suppliers want to reach those members, or at least the companies of those members. And I think what you have to do, and this is kind of what I did when I was in the association world, is went out to our members and asked them… Now, it was a trade association, so it was a little different, but I went out to the corporation and said, “Besides salary and rent, what is your biggest expense?”

(26:05):

And this was in the landscape industry. The one thing that I discussed-

Sean Soth (26:09):

Love that industry. Yeah.

Bill Sheehan (26:10):

… they said the same thing, tires. Wow, never thought about that, right? Not only tires on your fleet of trucks that you’re taking all your equipment to, but then the tires on the equipment that you’re using, that’s their biggest expense. And I started looking at our vendors and I’m not seeing Goodyear or Uniroyal or anybody. So we just went out to them and said, “Would you like to be part of this organization because your product is our members number one expense?” And they all came in. And so sometimes, you’ve just got to step back and look at things objectively and say, “Where do our members, either if they’re individuals, if they’re nurses or engineers or food service, what’s their biggest expense?”

(26:45):

It might be learning, it might be clothing, it might be laundry. Find those and say, “Are they part of your plan?” And if not, guess what? There’s a brand new revenue stream of hundreds of companies that would want to reach this audience. So I think developing that strategy is so critically important. But as your point, you’ve kind of got to step out of your current situation and start looking at where can we begin to… What’s the value and purpose that we deliver to our organizations, and how do we get those suppliers more involved? Because companies like us at D2L will readily spend money if we’re reaching the right audience, and you’re helping us do that. And I think when I’m at PAR, that’s what I’m hearing, those type of conversations, not just up on stage, but in the breakout sessions, over lunch, over a cup of coffee.

(27:39):

These are wonderful conversations. And again, it gets back to learning and networking, which every association’s byproduct is, right? It’s that. And I just think that non-dues revenue is not going away, and PAR, I know you do a report on that. If we wanted to close on that, could you just give us a little bit of an insight in some of the results that you have been seeing in some of your research on associations and their concerns and commitment to non-dues revenue?

Sean Soth (28:12):

The main concerns around the work is, do I have the right people delivering it? Am I supporting them the right way? And then one 600-pound monster on the porch, if you will, it continues to be the limitations that we self-impose on the sales team. Most associations probably have more accountants than they have business developers. Think about the streamline of revenue and business income. How streamlined is that? Sales is not a straight line. It does involve process. It does involve performance, and it does involve a lot of rejection. You’re going to have to fail a bunch of times. And when I hear people innovate, I go, is there anyone more innovative than a great business developer? Because you’re really talking about getting to the place of tires. To get there, you have to have thrown that out and talked about it, received perspective, guided the customers through why it was valuable, talked to the team about how you get the data together.

(29:34):

I’ve already laid out seven conversations probably in just that quick minute. We’ve got to get better at supporting our sales teams because without that, they’re always going to be filling in data entry. We sold an exhibitor, where does the logo go? You’re tasking them with everything but working on that 80%.

Bill Sheehan (29:59):

Yep, and generating new revenue. Well, Sean, you’ve been very generous with your time today. As always, I love our conversations. Looking forward to seeing you at ASAE.

Sean Soth (30:12):

Yeah, I can’t wait. It’s going to be a great show for everybody.

Bill Sheehan (30:14):

Yeah. One thing I would recommend to any of our listeners is, if you get a chance to visit the PAR, the Professionals for Association Revenue, visit that, learn from that, participate in that, and you’ll be better for it. And you’re going to have… Just like all associations have that, it’s an organization of like-minded individuals that you’re never going to find anywhere else because they’re all in your industry doing what you do, and that’s what really separates you. There’s that same level that I’m seeing at PAR, and that’s why I wanted to bring you on because I do think you’re setting a new bar for how events and how associations executives can interact with others to develop these non-dues revenue strategy plans based on facts that are happening in the industry.

(31:03):

So thank you very much for your time today, Sean. This has been wonderful.
Sean Soth (31:08):

Yeah, thank you, Bill. I enjoyed it.

Bill Sheehan (31:12):

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.