Ashley Uhl, CAE
Ashley Uhl, CAE, is the founder of Association Think in Vienna, Virginia.
When you think about your competitors, who comes to mind and why? Membership loyalty is not easy to develop or maintain. Often, it's tested by competing associations and for-profit companies.
The definition of a true competitor is any organization, provider, person, or entity that can provide the same products, service, or expertise as your association does. There's even a framework to help organizations identify true competitors: Porter's Five Forces.
Knowing these forces can help any association understand where power lies in any business relationship, and it can be particularly valuable in keeping members loyal. When they are reframed for association executives, the five forces can help leaders better understand and identify organizations and companies competing for their members' attention. Here are the five types of competitive forces at play:
The substitute for your association's webinar is not another association's webinar; it's the instructional YouTube video.
1. New providers. If the bulk of your membership benefits are small scale, such as networking events or regional conferences, then it might be easy for a new provider to enter the market with a similar product, service, or event and compete with you. Here are some questions to consider when thinking about new providers:
2. Substitutes. A substitute is what your members could be doing instead of using your product or service. The substitute for Coca-Cola isn't Pepsi; it's water. The substitute for your association's webinar is not another association's webinar; it's the instructional YouTube video. And the substitute for your association's magazine isn't another magazine; it's the blogger writing about your industry.
Associations might write off substitutes as too low-quality to cause disruption. However, a substitute doesn't need to better. It just has to be good enough, especially if it's cheaper. A pretty poor substitute can gradually improve until the average person starts using it. To determine if your association is susceptible to substitutes, ask these questions:
3. Member influence. Member influence refers to the member's ability to influence the association's products, services, and pricing decisions. In other words, how easy is it for your members to walk away? If there is a wide array of substitutes, or if your members are sensitive to pricing, the threat of member influence is high. If what you're offering is unique in the marketplace, then this threat level is lower.
4. Service provider influence. This force looks at how much power each provider has to gain members' attention. When considering this force, you first need to determine if your association has the ability to create highly differentiated products and services. You'll also want to consider your ability to advertise and market to members. Associations typically thrive in marketing efforts because they own the member data and mailing lists, which allows them to better advertise and market to people in the industry. To determine service provider influence, ask:
5. Rivalry for members' attention. The degree to which your association competes also depends on the number of rivals offering alternatives and substitutes. For example, if there is a high degree of rivalry in the area of educational offerings, you may see competitors actively trying to steal your members away. To evaluate this force, determine how many competitors are offering alternatives, and take into account whether your organization is doing unique work in the marketplace.
By identifying the strength and intensity of each of these five forces, associations can continue to compete against a variety of competitors. Knowing your true competitors is the first step toward increasing the value of your organization.