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…