John Madigan's Blog

Chamber Member Savings/Discount Programs

This post is part of an ongoing series on Chamber of Commerce leadership, organization, and membership. The posts are intended for Chamber staff but anyone who works in a membership organization can apply the concepts.

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Chamber Discount/Savings Programs

What often surprises me is how few real (i.e. valuable) discounts Chambers offer their members. A typical Chamber might have a discount for Office Depot and airport parking, but that's it. Why so few discounts?

Or worse yet, Chambers will offer their members "Hot Deals" or "Member to Member Discounts" that would more aptly be labeled advertising/marketing offers disguised as savings/discounts. 

It's a shame. Especially since Chambers have the benefit of leverage. They can leverage the number of businesses and employees they represent to get discounts and savings on products/services used by their members every day. 

So what gives?

A few reasons.

First, most Chambers don't have the time/resources to individually negotiate deals on behalf of their members. This isn't a good excuse because if Chamber don't have time to create new additional member benefits, what are they spending their time doing?

A second, better excuse is that trying to negotiate deals for one Chamber doesn't create enough leverage to get significant discounts. Vender's need thousands of people using the deals, not hundreds.

A third excuse is that Chambers only want to offer deals to their members that offer a commission back to the Chamber. And since the majority of vendors do not offer a commission, Chambers don't offer their deals.

If you're a Chamber staff member and any of these excuses make you mad or frustrated, they should. Chamber can (and should) do better in this regard. How you ask?

One option is to partner with other Chambers/associations. What if Chambers were to aggregate multiple Chamber's members? Then, there would be enough leverage to negotiate serious deals from national brands.

Enter Cost Cooperative.

Cost Cooperative is our newest partner at the Santa Monica Chamber (where I act as the Membership Director). They are leveraging the buying power of multiple Chambers and associations and their members to get great deals for Chamber members.

Before you ask, no, our Chamber isn't making any money from this partnership. Our goal is to create real benefits for our members that will lead to more businesses wanting to join the Chamber (thus increasing membership sales).

The  more Chambers that get involved, the bigger the negotiating power will be and the greater the benefits/savings participating Chambers can offer their members.

There isn't any good reason Chambers shouldn't join forces and create a real savings/discounts platform that's filled with great offers from recognizable (and trusted) brands. 

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What do you think? Is this something your Chamber would be interested in? Have you seen platforms like this before and if so, what has been your experience with them?

Creating & Evaluating Member Benefits

This post is part of an ongoing series on Chamber of Commerce leadership, organization, and membership. The posts are intended for Chamber staff but anyone who works in a membership organization can apply the concepts.

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Member Benefits

A constant discussion among membership organizations is the right number of member benefits. Are more benefits better? Less benefits? Should weaker benefits be eliminated?

There aren't any easy answers to these important questions. And because each Chamber is different, the number and type of member benefits will vary.

Since there is such a diversity in the type/number of member benefits, Chambers should be more concerned with a process of member benefit creation and evaluation. If there is a solid process, then the appropriate number and type of member benefits will emerge.

Defining a Member Benefit

What is a member benefit?

It's a solution to a member need. For example, members come to the Chamber with the desire to expand their professional network. They want/need to make more professional connections. To satisfy that need, the Chamber organizes networking events.

Member benefits are the lifeblood of Chambers (and other membership organizations). And because they play such an important role, it's critical that Chambers use a process to ensure the quality of those benefits.

Here is a 4 step process to create and evaluate member benefits. 

4 Steps Process to Create & Evaluate Member Benefits

Step 1: Create

The first step is coming up with an idea for a benefit. Maybe it comes from Chamber staff or directly from the members. Maybe you'll be approached by companies with partnership ideas for new member benefits.

But tread carefully, always make sure that the benefit is really a solution to a member need. You'll recognize a need when multiple members start asking for help with a certain aspect of their business or asking if your Chamber sells a certain product/service. 

For example, suppose a number of members asked if they can promote their events on your online events calendar. Since your events calendar is probably just for Chamber events, you might say no. But, you might also realize that if enough members are asking for this, it could indicate a need that the Chamber could solve with a member benefit (i.e. creating a community calendar). Proceed to step 2.

Step 2: Implement

The second step is taking the idea and evaluating/gathering the resources to implement it. This step starts with questions and ends with action. Here are some questions you can ask yourself before implementing the benefit:

• Complexity of implementation?
• Costs associated with implementation? (staff time, money, energy)
• Projected members served?
• Ongoing maintenance (cost, time, energy) of benefit?
• Can the benefit be self-service (i.e. not require staff time/energy once implemented)?
• Can the Chamber provide this benefit better than anyone else in the Community?

Consider these questions a quick cost/benefit analysis for your suggested member benefit. By doing some basic due diligence, you can weed out the losers and focus your attention on the benefits that have real potential.

Building on the community calendar example in Step 1 above, it is probably simple to implement a new community calendar on your website. Ask your web manager to give you a quick estimate on cost. The projected members served could be quite large, since members have their own events all the time. Ongoing maintenance is a tricky one. Many online calendars are not self-service. This means that every time someone wanted to add a new event to the calendar, you would need to manually input the event information. This may raise a red flag. Finally, it's worth a quick web search to research other event calendars for your community. Is this a resource the Chamber can provide that will be better than the other event calendars in your community. Or will it just be buried on your Chamber website? 

These are the sort of questions your staff must evaluate before fully implementing the new benefit. In the final analysis, you'll know whether or not to implement the benefit. 

Step 3: Promote

Three words: communicate, communicate, communicate. No one cares about benefits they don't know about.

The Chamber must communicate two things: (1) the benefit and; (2) how to use it. Do they need to contact a specific staff member? Create an account? Call an account rep?  

Whether you do this through email, direct mail, phone or in person, communicating the benefits available and how to use them will make or break your offering of benefits.

Step 4: Evaluate

Constant evaluation is essential to member benefit relevancy. Still think your members gain tons of value from a "business listing" on your website? Think again.

It's almost sacrosanct to eliminate a benefit and thus, the list of member benefits just keeps growing. But guess what? It's OK to eliminate member benefits. It's better to eliminate weak benefits if it creates more resouces to focus on the stronger ones.

Some questions to consider when evaluating a benefit (similar to the questions you ask before implementing a new member benefit):

• What member need does this benefit serve?
• Approximate number of members served?
• Ongoing costs associated with the benefit? (staff time, money, energy)
• Can the Chamber provide this benefit better than anyone else in the community?
• Approximate value of this benefit to members?
• Would anyone notice if the benefit was eliminated?

For many Chambers, Step 4 should be the first step in the process. There already have a list of members benefits that hasn't been evaluated for months (or even years). Evaluating each benefit one by one will shed light on benefits that need to be enhanced, changed or eliminated.

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Thoughts? Does your Chamber use a process to routinely evaluate member benefits and their relevance?

How many members do you have? (Hint: the answer isn't that important)

This post is part of an ongoing series on Chamber of Commerce leadership, organization, and membership. The posts are intended for Chamber staff but anyone who works in a membership organization can apply the concepts.

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How many members do you have?

After attending the annual WACE Conference (a conference for Chamber Executives), I was reminded of the typical question Chamber Execs routinely ask each other every year to gage their own Chamber's performance. That questions is "how many members to you have?"

The problem with this question is that the answer is relatively unimportant (other than a general barometer of Chamber size). Sure, in a membership organization like a Chamber of Commerce one piece of data is the number of members.  

But does the number of members really give a Chamber a good sense of the strength of its organization? I think not. Wouldn't a Chamber rather have 500 committed members instead of 750 apathetic ones? Without a doubt. 

Instead of focusing on the number of members, Chambers should focus on the value (i.e. quality) of those members. Sure, more is typically better in membership organizations. But quality is much more important than quantity.

So what question(s) should Chambers be asking about the value of their members?

Here are a couple suggestions:

• [Participation] How many members participate in events? Committees? Volunteering?
• [Financial] What is your lowest and highest membership fee? Lifetime value of a member?
• [Promotion/Referrals] How many referrals does your Chamber get from members?
• [Brand Recognition] Do well known and respected businesses join the Chamber?
• [Loyalty] What is your retention rate?
• [Feedback] How many members routinely give you feedback? Suggestions for improvement?
• [Communication] How many members receive, open, and engage with your communications?

These questions are just a starting point for a more meaningful discussion about Chamber membership and the value of members (instead of just the number).

Hopefully next time you run into other Chamber Execs, you'll think twice about how many members they have and instead inquire about the quality of their members.

Thoughts? What questions do you think Chambers should be asking each other to assess the value of their membership?

Warren Buffett on Business

Here is a great video of Warren Buffett answering questions from a group of MBA students. He uses Coca-Cola as an example throughout the presentation as a great business with the characteristics he looks for in an investment.

Interestingly, he says that people don't get cola fatigue. Meaning that it is natural to get tired of eating and drinking foods and liquids with the same taste. While people may get tired of drinking root beer or other flavored drinks, they do not with cola. This phenomenon is what enables people to drink five cokes a day and then do the same the next day. I'd be curious to know if that's actually true.

The video is about 128 minutes, but well worth watching in its entirety. Here it is:

In Honor of Steve Jobs

Here is Steve Jobs' 2005 Stanford Commencement address. 

And here is a clip of Steve Jobs with Bill Gates (highlights):

The Personal MBA by Josh Kaufman

I read a fair amount of business books. And by "fair amount", I mean quite a few.

The Personal MBA is one of the best business books I've read in a while. It boils down the most valuable lessons from the sea of business writings/books into one volume and makes the lessons easily digestible.

Also, the book offers a fresh perspective on business education for anyone who has considered an MBA, or already received the degree. 

Definitely worth a read.

 

Identifying and Cultivating Business Prospects

New leads/prospects are the life blood of small business. So how are you identifying and cultivating your leads/prospects?

The first step is making sure you know exactly who your target customer/client is. Can you answer these questions about your target clients/customers:

• What is their age/demographic/sex?
• Where are they located?
• Where do they spend their time and money (personally/professionally)? 
• What is important to them?
• What big challenges are they facing right now? 

If you don't know the answers to these questions, just ask your current client base. After all, they're already clients, and they might even be more impressed that you took the time to find out.

Then, once you know who you're targeting, see who else is already serving that market. The point of this exercise is to uncover organizations that you can partner with.

For me, partnerships have yielded the best results with respect to new leads/prospects. For example, I will identify a business/organization that serves a similar target market. Then, initiate a discussion about a mutually beneficial partnership. Maybe you can trade contact lists, offer referrals, exchange links and/or ads in your email newsletters or websites, etc. There aren't any restrictions on the type of exchange, just be cognizant that it should be beneficial for both parties.

Not only is the partnership route free, but in my experience it has been wildly more successful than buying lead lists, sending direct mail, or making cold calls.

Here are a few concrete examples of small business partnerships I've seen before:

• Chiropractor partners with acupuncture specialist or physician.
• Home staging/interior designer partners with with real estate agents, contractors, etc
• Yoga teacher partners with local fitness studio to serve clients that want tailored workout plans.

What about you? What's the most effective strategy you've used to identify and cultivate new business?

Results-Only Work Environment (ROWE)

Every time I hear about a manager who berates an employee for arriving a few minutes "late", I cringe. Are we still in grade school?

Sure, there are a few jobs that require strict hours. But the majority of information workers can work from anywhere at any time. So why insist that people show up at 9am and leave at 5pm?  

Lucky for corporate America, a few trailblazers that have taken the leap, and changed their human resource strategy. There's even a name for the new strategy: Results-Only Work Environment (ROWE).

Tim Ferriss has a nice piece about ROWE here, and in particular, how the folks at Best Buy created/adopted it. Also, Dan Pink has a related TED talk about employee motivation. The bottom line is that the focus is on results, not time. 

Who cares if someone doesn't come in until 10am if they're producing outstanding results? I certainly don't.

Developing Vintages of Email Marketing Leads

The Constant Contact workshop book I read recently stated that a good open-rate for business emails is 20%. That means if you have 1,000 email newsletter subscribers, 200 will open your emails. The other 800 folks will either immediately delete your emails or the emails will get caught in a spam filter and/or email program, etc.

So how do you harness information about who is opening your emails? 

Well, most email marketing programs have a feature where they show you the email addresses of the folks who are opening your emails. This is valuable information because even if only 200 people are opening your emails, those 200 people have expressed a higher level of interest than the other 800, and therefore, should be treated differently.  

So, using the list of folks who opened your email, you could create an entirely new email list. This list would be a list comprised of people who are at least interested enough to open the emails you're sending. You could use this list to send these folks additional promotions, discounts, and/or more enticing offers/opportunities. 

Or, taking it a step further, let's say you put a few clickable links in the emails you send. You can also track who clicks on those links. The folks that click on your links are even more valuable than the first group (who simply opened your email), because they made the choice to read more, learn more, etc.

Then, you could create a second list of the folks who were interested enough to actually click on one of your links. Let's say you want to run a promotion, this new list (or "vintage") of emails addresses could be used even more effectively. Offer these people a discount, solicit feedback, or the like.

Instead of sending your emails to the same group in the same way each time, it might make sense to start segmenting the list into groups depending on the apparent interest level (as gauged by opens and clicks).

What do you think?

 

7 Questions to Consider When Pricing Your Product/Service

Here are 7 questions to consider when pricing your product/service:

1. What is the price for the comparable product/service?
2. What do you need your profit per sale to be?
3. Labor costs? (Labor costs are the costs of the work that goes into manufacturing a product. The direct labor costs are derived by multiplying the cost of labor per hour by the number of personnel hours needed to complete the job)
4. Overhead costs? (Overhead costs are those not readily identifiable with a particular product. These costs include indirect materials, such as supplies, heat and light, depreciation, taxes, rent, advertising, transportation and insurance)
5. Production costs? (both fixed and variable costs should be taken into consideration)
6. What is your market willing to pay? (Look at your competitors and see how you stack up)
7. How much value are you delivering?