In a rapidly changing world, associations must adapt to stay relevant and provide value to their members. One way to do this is by harnessing the power of artificial intelligence (AI) to transform their traditional membership models. The advent of generative AI, such as AI-powered digital assistants, opens up new possibilities for associations to create unprecedented levels of value for their members. This blog explores the opportunities and challenges of rethinking membership models for associations and draws inspiration from successful Software as a Service (SaaS) and subscription-based business models.
The Traditional Membership Model and Its Limitations
The traditional membership model of associations typically involves a structured approach where individuals or organizations pay a fee to become members and gain access to certain benefits and resources.
However, changing member behaviors and expectations means that associations’ historical struggle to differentiate their membership offerings needs to be addressed. While different classes of membership might exist, the value provided to members across these classes is often indistinguishable. Membership has traditionally focused on providing access to member benefits without tailoring the value proposition to the specific needs of different member segments. This limitation hinders associations from fully meeting the diverse needs and interests of their members.
Related: 4 trends to adopt for an effective membership strategy
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Rethinking Membership Models: Lessons from SaaS Companies
Associations can learn from successful SaaS companies that have mastered the art of delivering differentiated value to customers through tiered pricing models. Such models offer free, low-cost, and premium offerings, catering to various customer needs and budgets. Associations can emulate these strategies to provide a tiered membership structure that offers increasing value at each level.
Here are some key lessons associations can adapt from SaaS companies:
1. Asymmetric value creation: Offer significant value at each tier of membership while providing compelling reasons for members to upgrade to higher tiers. For example, an entry-level membership could provide basic access to an AI-powered digital assistant, while a premium membership could offer unlimited access, advanced features, and broader content access.
2. Organizational-level value creation: Associations can explore offering firm-level features that cater to the needs of member organizations. By blending the association's content with the member organization’s proprietary content, offering additional controls, or providing custom integrations with other software, associations can enhance the value they provide to organizations.
3. Flexibility and experimentation: Rethinking the membership model may require challenging long-held assumptions and experimenting with new offerings, pricing structures, and value propositions. Associations should remain open to adapting their approach as they learn what works best for their members.
Lessons from Slack's Tiered Pricing Model
Slack, a collaboration and communication platform, offers a tiered pricing model that associations can consider. Slack's pricing structure includes free, standard, plus, and enterprise tiers, each providing different features and catering to specific user needs. Associations can apply similar strategies by offering a basic level of access bundled into their membership and introducing premium levels of service with additional features and support including value creation at the organizational level.
The Advent of Generative AI and Its Impact on Associations
Generative AI, such as AI-powered digital assistants like ChatGPT and BettyBot.ai, has the potential to revolutionize the way associations create value for their members. These AI-powered bots can deliver conversational, personalized, and contextually relevant information to members, allowing associations to tailor their membership offerings according to individual needs. This new form of value creation challenges associations to rethink their traditional models and explore innovative approaches.
Challenges and Opportunities in Implementing AI Services for Associations
Implementing AI capabilities as a new service or benefit for association members may present several challenges. Legal and regulatory compliance should be a top priority, ensuring that AI services meet all requirements. Integration with existing systems and addressing resistance to change are also key considerations. Financial constraints may require associations to identify appropriate funding sources for developing and deploying AI services.
However, there are also numerous opportunities for associations in adopting AI services:
1. Enhanced member services: AI capabilities can provide cutting-edge technology and applications, improving member satisfaction and attracting new members.
2. Improved efficiency: By automating routine tasks, AI services help streamline operations, resulting in cost savings and improved productivity for associations.
3. Revenue generation: Offering premium levels of AI services as separate, additional services creates new revenue streams for associations. Members who require more advanced features and support may be willing to pay for these specialized services.
4. Competitive advantage: Embracing AI technology positions associations as forward-thinking and innovative organizations, enhancing their reputation and attracting potential members and partners.
5. Member empowerment: Providing members with AI tools and resources empowers them to make data-driven decisions, enhances their professional development, and improves performance in their respective fields.
Associations should consider leveraging AI capabilities as a new service to overcome the challenges associated with changing their membership models. By bundling basic AI access into membership and introducing premium levels of service, associations can provide valuable AI benefits to their members while remaining accessible to diverse needs and budgets.
The exploration of generative AI presents associations with an unprecedented opportunity to rethink and augment their membership models. By learning from successful SaaS companies and embracing flexibility, experimentation, and differentiated value creation, associations can develop membership offerings that align with the changing needs of their members. To learn more about how AI can unlock the power of associations, download the book Ascend: Unlocking the Power of AI for Associations. It provides further insights into how AI can transform association management and create new value for members.
Amith Nagarajan
I am the Chairman of Blue Cypress, a family of purpose driven companies. All of our family member companies focus on helping associations, non-profits, and other purpose-driven organizations achieve long term sustainability. More at BlueCypress.io
July 23, 2023
3 min. to read
