Looking for the right Business Partner for your NFP?
Why is it that Associations think "Sponsorship" before "Business Unit"?
Let me start with - not all think this way! Those that get "it" - reap the rewards accordingly, as do their members.
It comes back to having the skills and understanding of what a Business Unit might look like in an Association. The skills required to run an Association are broad so it stands to reason that this might not be high on the priority. But one thing that all Associations have in common is their need to increase revenue to provide greater services to their member base. This cannot come from continually increasing membership fees or the member will take their money somewhere else.
So what do I mean by understanding what a business unit does?
Let's look at an example.
You have an Association with 1000 members. There are a number of "things" that each member will use in either their business or private life. Some common ones are - Telecommunications (mobile, landline, video conferences etc), Insurance, Finance and Vehicles etc.
Let's look at vehicles. This is actually a difficult one for Associations to fully understand the power of their base when it comes to vehicles. Almost all Associations have a CRM. Some use it well, whilst others just keep basic member information and no more.
In the average Association they either engage a Car Broker or do a deal with a dealership or specific car manufacturer. These deals are generally a "Sponsorship" arrangement where money is tipped into the pot and the Association does some things for the deal. Things like conferences, emails, and magazine advertising etc - sound familiar?
These historically are a short term gain for the Association (sponsorship money) and no real gain for the investment (Sponsor) and invariably end in a parting of the ways. The Association chases another "Sponsor" and so the game continues.
How could we change that?
Well what if you asked your members a few questions and put them into your CRM. Questions like what do you drive, how many vehicles, make and or model, do you lease or buy outright - you get the drift. Over time you build up this data. Why?
Well imagine if you had a business unit that could deliver some serious "Fleet" solutions. Keep imagining that in January next year you had 100 members that were due to change vehicles and they all drive Holden’s. Do you think Holden might be interested in talking to you?
Money is lost buying a vehicle as well as when you move one on. The reverse is true if you have the right offer. What if you had a member with 6 vehicles and you could "manage" his fleet for him.
You save him around $2000 on the purchase but also $2000 on the disposal. You've just saved him $4,000 - what's his membership worth? Better than that - the Association also makes some revenue to build the Business Unit.
So, think about your member base. Most of your members will average 2 vehicles in both their business and private life. Do the maths- if you made just $200 per vehicle - this could really add up on top of providing serious savings for them.
Is this possible? Yes, but you have to have the right business partner to drive this for you.
The Association itself must understand what all of this could mean for its future. Staff have to be brought along for the journey as well. Their buy in is strategically critical for the success.
Most Associations begin because of the need to deliver services to a group of like-minded individuals or businesses. Over time they develop terrific tools to communicate and deliver the information to the members.
These tools are vital in building the “business unit” into something of real value to both the association and its members. The marketing of these business units should be mandated as non-negotiable. They need to be viewed as an extension of everything you provide.
Other common but vital tools are CRM’s to capture the information, engagement tools for the provider and the Association to monitor, measure and report on the business unit. A lead generation strategy would round out the ongoing success of the business unit.
Of course, Sponsorship also plays an important part but that is for another paper.