A recession is coming, as most of us economists argue. Most economists predict a recession within the next year, and I expect the recession to begin in late 2023 or early 2024. Societies and independent trade fairs will be hit hard just as they are starting to recover from the pandemic. Fortunately, good association management can alleviate some of the pain.
Many businesses cut their spending during times of economic downturn, and association membership fees can be on the list of cost savings. Two aspects of the dues process complicate the management of the association. First, renewals are usually annual. That is, the association does not know that a member will not be renewed for up to one year. This problem gets worse if all refreshes happen at the same time. When renovations are gradual, association management can see trends evolve over time.
The second difficulty is that some association executives are not in contact with members who will most likely not be renewed. Often businesses will be closely linked to an association as well as members of other associations that are in some way in the vicinity. I once ran into a business owner at a state asphalt paving association meeting I spoke to, and also at a concrete paving association. He explained that asphalting is their main job, but they also do some concrete work. In his case, the asphalt association was at the center of his business and would remain a member even in a recession. However, concrete association dues could disappear in difficult times.
Who does the typical association manager hang out with? Of course the board of directors and some committee members. And these are business leaders who are strongly committed to the association. The admin sees who will reliably renew their membership. However, managers cannot speak to members of businesses that have a minor interest in the association.
This is a solvable problem, of course. The manager may spend some time on the phone with members who attend sporadically and never volunteer for committees or projects. The purpose of conversations should be to understand the member’s job, challenges, and opportunities. The result should be a good understanding of the possibility of member renewal. However, the manager who enters the sales mode may not learn the facts. Listening is key. And nothing helps renewal more than genuine interest in the member’s business.
Trade shows face similar problems. Many occur annually, or even biannally, so the executive doesn’t find out for quite some time that a company has left their show. Again, some companies will certainly buy booths for a trade show, but view other shows as of secondary value.
The trade show manager does best by keeping in touch with exhibitors long before commitment deadlines.
Knowing in advance of non-renewal situations, the manager will be able to set budgets that avoid nasty surprises. Staff and the board of directors can evaluate proposals that fit the needs of members in a recessionary environment. This could mean fewer meetings or more virtual meetings. And probably the content of the meetings should change. The motivational speaker who says “Invest in your people” may fail in the face of an audience that has laid off thousands of employees. Programs that help members get through a recession, or even the disruption of a recession, can help protect association income.
In the last ten years many associations have merged with other associations. The impending recession could trigger another wave of mergers. This isn’t necessarily bad, but association members are best served by smooth transitions, not chaotic change triggered by failed financial situations. Association staff also help by adapting seamlessly to new economic realities.
The recession will be difficult for many associations, but good management can ease the pain.