Scary thought--elasticity in demand

Remember “elasticity” from your college economics classes? Elasticity in pricing means that demand is constant regardless of price changes. Water and air fall into this category—we all need the same minimum amount regardless of how cheaply or expensively they are priced.

Demand elasticity, on the other hand, means the consumer has an infinite supply of alternatives. With accessibility of almost anything through the Internet, an increasing amount of goods and services are or will be affected by demand elasticity—putting tremendous pressure on producers to provide always better, faster, cheaper, friendlier, etc. than the myriad other competitors that are out there. As an alert manager, the concept of demand elasticity in your market has to be your worst nightmare!

Although you may not have thought of it as such, as an association manager, your goal always has been to identify and work toward delivering those products and services that highly elastic in pricing—things your market finds critical to its well being. For example, most professionals and trades need licenses or certifications or accreditations in order to do their work--so it stands to reason that the credentialing and the education and training programs needed to achieve those credentials are highly elastic in pricing. The associations and professional societies that have carved out such niches for themselves are in a good place. Those that have not, risk being consumed by the elastic demand demon that is growing in strength, even as you read this!

Maybe Donald Trump in his book “Only the Paranoid Survive,” had a point? Good managers do well to keep this scary thought in the back of their minds, as they plan their organizations’ futures…

Beware: Dropping membership levels may not be due to the recession!

One of the many by-products of our Internet-facilitated world is the vast array of choices that has been opened to all of us in so many aspects of our lives. The world has become our shopping ground for whatever we want whenever we want it. We are no longer slaves to buying only from outlets or participating only in organizations that are closest to us when they are open. We can now take classes, work for organizations, and participate in associations that may be half way around the globe when and as we want. This is the scenario that Thomas Friedman describes in his book The World is Flat.

With our consciousness raised to a global level and with 24/7 in-going as well as out-going accessibility, how do we decide where to invest our valuable time and resources? This new “flat earth” environment opens the way to both challenges and opportunities for associations.

The challenges are easy to see. According to “Association Trends’ 2009 Mid Year Association Pulse Survey,” 33.3 percent of professional societies and 32.2 percent of trade associations experienced membership drops last year. But while these figures may be a sign of the times, they may not be entirely due to the Great Recession; perhaps there are other factors at work here as well.

According to www.volunteerigninamerica.gov , even during this economic crisis we are seeing levels of volunteering that are greater than ever before. Over 441,000 more young adults (ages 16-24) volunteered in 2008 than 2007, up 5.7 percent from 7.8 million to over 8.2 million. Furthermore 78.2 percent of all these volunteers made a charitable contribution or non-monetary donation of $25 or more in value compared with 38.5 percent of non-volunteers.

So here is a truly sobering thought: Those associations, that have hunkered down and cut back on their spending while they wait for members to come back, may be in for an unpleasant surprise--these missing members may not be coming back.