Can we create a membership model that’s fair for everyone?

The challenge

There was growing tension among our client’s members between the value proposition and the dues, or fees, it charged.

The membership model was designed to ensure everyone had the capacity to join. The larger the member, the more they paid. It worked well for decades.

Over time the size of the membership grew. Large members were now contributing the bulk of the revenue, but using the least services. Despite years of discussions, the client had no solution.

The situation was reaching boiling point. Members were leaving. They wanted a more equitable model.

Our task was to resolve this tension.

Our response

We used applied research to investigate how other associations grapple with these issues. We explored the literature on associations, specifically on creating member value and setting membership fees. We conducted comparative analysis of 80 similar associations to see which membership models were common.

We found that our client’s value proposition had drifted. It had become too aligned to service delivery. It was silent on the value of membership in and of itself. The effect of this was members forgetting what drew them to the association in the first place.

We recommended our client reposition membership as its core service line. Because it was from the intangible benefits of joining this community that all else flowed. We then set about putting a price on this core value. This was the key to designing a membership model that’s fair and equitable for all.

We drew upon the principles of behavioural science to design three potential new models. We used behavioural insights to understand what’s important when members choose to purchase a membership or not. One useful insight concerned the anchoring effect. Anchoring happens when an individual uses an initial piece of information as a base point from which to make subsequent judgements. Once an anchor is in place, we adjust away from this initial anchor when making other decisions.

The current membership model only gave a single price. Without an anchor, prospective members would struggle to determine the value of membership. Our recommended new model included membership tiers to anchor the value a member was receiving compared to others. The client accepted this recommendation.

The recommended model included two types of membership fees and five tiers of membership. But what would its impact be?

We used data science to model and visualise the changes across the membership. We set different price points and developed a series of scenarios to help guide the decisions. We used PowerBI to visualise the impact for our client and for each individual member. This allowed the client to test and interrogate the model in real-time. This provided the client with confidence in the strength of the new model.