Professional services firms have long-standing relationships with trade associations and professional societies viewed as important to their businesses. Many see associations as an entry point for business opportunities with member companies. But given the non-profit status of associations, can they also be growth businesses? Can growth strategies that work in the for-profit world apply as well to the non-profits?
To help answer these questions, the U.S. Chamber of Commerce in 2004 commissioned the Bloom Group and strategy expert Michael Treacy to conduct a year-long research project. The Chamber secured underwriting funds from American Insurance Group (AIG) and received financial support from 25 associations and professional trade societies. Research findings were based on 33 case studies, a survey of 87 associations, and a list of the fastest-growing U.S. associations.
The findings were released on Sept. 7, 2005 at “The Future of the Competitive Association: Final Results Conference,” an all-day educational event at the U.S. Chamber. Highlights of the study, which the Chamber will continue in 2006 with the launch of a research and advisory program for the association world, include:
The fastest-growing associations are increasing revenue at the pace of the fastest-growing Fortune 500 companies. The 10 fastest-growing associations had annual growth rates of from 31% to 70% from 1998 to 2003. That compares with compound annual growth rates from 44% to 66% for the fastest-growing Fortune 500 companies between 1999 and 2004.
Despite significant competition from for-profit companies in advocacy, trade shows, research, seminars, and other staples of the association business, associations have gained market share since 1992. In fact, associations have increased their share of the $210 billion market for such services in 2002 to 14%, compared with 12% in 1992.
Associations, whose resources are often fragmented to respond to a multitude of member issues, must focus their resources on the biggest needs of members to provide significant value and differentiate themselves from for-profit competitors. This means associations must determine what they truly excel at and strike key alliances for accomplishing other necessary services.
“We’ve received great response from associations to the 2005 study,” says J.P. Moery, the Chamber’s Senior Vice President of Federation Relations, who spearheaded the study. “This kind of research is critical today because industries and professions now compete on a global stage. Associations can play a major role in making these industries and professions more competitive. But to do so, associations have to become better in how they run their own businesses. Our goal is to create the premier research program to help associations increase their impact and resources.”
On the heels of the study, the Chamber has launched an annual research program for association executives. The Chamber’s Competitive Association Program (CAP) in 2006 will be targeted at trade and professional associations that are members of the Chamber, as well as other associations. The Chamber is also seeking sponsorship from professional services, travel, and other companies that sell services to associations or see them as key alliance partners.
“The Chamber wants to make itself the leading expert on how to run associations. As a result, it fully recognizes the value of best-practice case study research on the association world,” said Bob Buday, a co-founder of The Bloom Group. “The association world is ripe for new management theories and practices. ‘Thought leadership’ R&D of the type we do for professional services firms has become increasingly more important to associations.”