(Background: "Free: Why $0.00 is the Future of Business" and "Steal This Slide:The Six Kinds of Free")
Maddie Grant has been thinking about what "free" means to associations, which have historically relied on membership dues to provide a sizable proportion of an organization’s annual revenue. However, over the past thirty years, membership dues have continued to shrink in this regard.
(source: ASAE)
Membership dues have served multiple purposes, such as enabling discounts on other products that are offered by the organization, or enabling access to "members-only" information or services. These dues help to fund the "mission" of the organization, whatever it may be.
These dues also are a way to "value" the opportunity to join the community of like-minded individuals who are members of the organization.
In this context, Grant looks for analogs for each of the six kinds of free, and how they apply to her industry. Grant asks:
Can these [six kinds of free] be translated to member services?
- Freemium – Free entry to online communities, charge for "premium" areas/functionality?
- Advertising – On websites, online communities, e-newletters, sponsorships?Cross subsidies – free initial access to articles, charge for distribution?
- Zero marginal cost – Webinars, podcasts, other e-learning modules?
- Labor exchange – Wikis?
- Gift economy – Any social object that promotes the association / donated labor or barter system?
(N.B. The more this comes up, the more it feels like the discussions that were heralded by Doc Searls circa 2004-2005 regarding blogs, and the different "monetization" models that were being applied to them. The net of the ‘net: you will likely make money because of something you’re doing, rather than with it. More on this here. And a the seeds of the "because effect" were sown here.)
Back to the point above, the one about membership dues being a way to "value" the opportunity to join a community of like-minded individuals who are aligned around a particular mission or affinity. Does that model still work? With ambient "community" showing up, well, in practically every system or business plan that is being created, is there value in tithing when an individual can simply find others with similar interests via blogs, or even on Facebook or LinkedIn? (I don’t have an answer to this quandary and am hoping others with opinions will weigh in via the comments.)
So what about your business? If your "traditional" revenue stream began to tend to free, how would you make money?
Thanks once again for the link love! There appears to be quite a debate about this in the association blogosphere – some feel membership has a value which should be paid for, others (like me!) think that value provided by associations and non-profits should go way beyond what dues traditionally pay for (eg mailing list, publication, discounts), and that over-reliance on “strategizing” about how to get more dues-paying members is a mistake when there are many often untapped ways of monetizing user engagement.
Every morning as people wake up and make the commute to work,
When the market discovers a cheaper way to do something, anything, someone will do it and take it to market.
In many cases, radially cheaper ways of doing things threaten existing economies. This is that ever-popular concept of “disruptive.”
To wit: Web based services are simply much more cost efficient, and so [free] takes on a whole new set of flavors and flourishes. Double-click on the word “revolutionary” and you may just find “cheaper.” A mundane point? Maybe, but I’m afraid it’s hard to bypass.