Forum - March 2011

it easier to get the job done. What does this mean to associations, which often feel responsible for leading their members through environmental change?

When in competition with industry for traditional association features like education and publications, two major types of customers appear to lead to disruptive innovation: undershot and overshot customers. Undershot customers are those for whom the association’s existing products are not good enough. These members express frustration, make negative comments about the association, ask another source for key information/services and volunteer to pay more for upgraded service, although the association is not prepared or capable of offering it.

Overshot customers are those for whom existing products are more than good enough. Overshooting is the driver behind commoditization — the process that results in organizations being unable to profitably differentiate their products and services. Overshot customers pay decreasing premiums for improvements they used to value. Adding extra features that never get used will eventually lead to products and services that members perceive to be too complicated and too expensive.

Companies that threaten typical association products are taking advantage of the modular way in which these association products were developed. Displacements take place at these points of modularity. Because these modular programs and services are usable without “membership,” they are attractive to competitors. It is precisely the attractiveness of generating “ non-dues revenue” that associations have counted on that allows competitors to enter the field.

sacrifice margin for value: While there are tradeoffs from a fiscal standpoint, there are advantages in positioning as a trusted resource. The challenge will be to deliver value that is perceived to be significant enough to prevent migration to other providers.

A third option suggests associations
consider increased focus on items that
serve their members’ customers, and on
delivering services that provide direct
economic benefit to their members. It
may be that by careful review and anal-
ysis of their education and knowledge
programs, associations may be able to
better serve their customers’ customers,
and realize a greater economic benefit
in the process.

Eileen M. Murray, CFRE, CAE, is deputy executive director, American Academy of Dermatology. She may be reached at emurray@aad.org.

Conclusions

In considering association offerings through the PEST and “five forces” lens, the value propositions that associations offer are credibility, brand, reputation and resource vetting. This value proposition can be reasonably applied to the high-threat areas of education and networking.

Associations often are willing to

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