Tim Ebner is senior editor of Associations Now in Washington, DC.
A few key indications may signal that it’s time for two associations to combine. Here are some signs that a merger might be a smart move.
As both a consultant and a former association executive, Brian Costanzo, CAE, knows the telltale signs that the time may be right to consider a merger with another organization.
“You could look at overall net growth of your membership, attendance at key events, and the ratio of business partners to practitioners,” Costanzo says. “I’ve been in a situation where you have more business partners coming in as members than practitioners, and that’s a real problem.”
Such a shift creates an imbalance where there are too many people selling to too few practitioner members. “You start to lose out in a lot of ways,” he says. “And for me, it was a sign that it might be a good time for a merger.”
Association mergers are complex transactions, fraught with business and emotional issues to sort out. Despite the challenges, sometimes a merger is a healthy step that ensures the mission survives.
“There’s often an emotional attachment that comes with a merger. For some associations, it’s not even an option on the table,” Costanzo says. “I know subjectively, in talking with colleagues, that at least four or five different associations closed their doors last year. They didn’t even consider a merger or leave any room for a legacy.”
Association mergers are complex transactions, fraught with business and emotional issues to sort out.
Any significant drop-off in an organization’s key performance indicators could signal it’s time to consider a merger if there is another association serving a similar member base and pursuing a similar mission, Costanzo says. He suggests conducting an annual competitive analysis that benchmarks how your organization compares in size and scope—relative to its products and services—to peers, including membership-based organizations and industry competitors.
“There are so many networking groups that have come into the association space recently, and they could be taking time and energy and budget away from your key products and services,” Costanzo says. “Conducting the annual competitive analysis will tell you where your association stands currently, and how it might differentiate, scale up, or even sunset products or services to stay competitive.”
For a merger to work, the board and CEO of both organizations must work together to communicate a well-thought-out plan, informed by input from members.
“The pride that member leaders—and most members in general—might have can be so strong that it’s up to the executive team to make them feel recognized and heard,” Costanzo says. “Educate your members about what’s going to happen in a merger, and give them a chance to share their opinions, so they feel good about what’s to come in the transition period.”