Why Strategic Pricing for Associations is Essential

Why Strategic Pricing for Associations is Essential

Strategic pricing for associations is crucial, but many associations lack a formal strategy when it comes to member costs. Mary Byers, a seasoned association consultant, highlights this issue with an example from an association she has been involved with for over 30 years. 

This association raised its dues from $525 in 2023 to $950 in 2024—an 81% increase. Byers, who does not advocate for such drastic changes, prefers steady, incremental increases. This approach aligns with Dr. Michael Tatonetti’s recommendations in his book, “Pricing for Associations,” which suggests annual increases of 3-5% to avoid member sticker shock and improve retention.

Tatonetti also emphasizes the importance of a centralized pricing strategy, understanding that some items may serve as loss leaders while others contribute to the bottom line. He warns against having each department focus solely on profitability, as this can distort the overall strategy and customer experience. 

A comprehensive pricing strategy should include data and value analysis, clear timelines, assigned responsibilities, standardized templates, and key performance indicators and policies.

Byers notes that effective pricing is crucial for balancing financial health and member satisfaction. Underpricing can undermine the value delivered while overpricing can drive away members and reduce retention. This is why a well-defined, regularly reviewed pricing strategy is essential for any association. If an association is unsure about its pricing strategy, it may be time to develop one.