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Making lemonade from lemons.

Making Lemonade From Lemons

You're not alone in worrying about the impact of this recession on your organization and its members, assures Henry L. Ernstthal, CAE, executive director of the master of association management degree program, George Washington University, Washington, D.C. At an ASAE all-day seminar in January, Ernsthal shared with more than 70 executives his index-card stack of ideas for managing during a recession.

Not to be outdone, the conference participants had some to good suggestions of their own. Resourcefulness, for instance, would have to be at the top of Henry Saeman's survival list. Saeman. executive director of the Ohio Psychological Association, Columbus, is from a small association (1,500 members, five staff) that really couldn't afford to send him to the seminar.

That just made Saeman all the more determined. He sent a letter to other state psychological associations explaining his fiscal constraints and offering to his fiscal constraints and offering to attend on their behalf with their sponsorship. In return for sharing the expense, the sponsors would receive from Saeman a full report on tips garnered from the session.

Saeman's ingenuity was on a roll: He also managed to find a real deal on his airline ticket. By driving from Columbus to Morgantown, West Virginia, and parking his car for free in the field next to the runway, he reduced the flight cost from one airline's quoted ticket price of approximately $400 to $98 from another airline.

And that's the spirit in which Ernstthal offered suggestions for coping when the going gets rough - the spirit of finding new solutions, borrowing from what has worked for other, and taking a fresh look at your assumptions.

So here for your shopping pleasure is a sampling of ideas and suggestions, some food for thought. Most of these are Ernstthal appetizers, but some come from conference attendees and the three panelists who joined the afternoon portion of the program (see sidebar, "Leave No Stone Unturned").

First steps

* Revisit your strategic plan. Are the assumptions on which it's based still valid? *Keep good records. Program-oriented budgets help you see what things cost; they enable you to track individual costs and related revenues. In other words, they give you the data you need for assessment and decision making. *Use the data to rethink programs that aren't making money. This is the time to get rid of the "dogs" - programs that don't bring in much revenue and aren't particularly related to your mission. Ask yourself whether you can generate more revenue using the same dollars positioned elsewhere. *On the other hand, this is not the time to cut service. The challenge is to get it done more cheaply and effectively. *The key to protecting or enhancing your revenue stream is being close to your members and accurately assessing their needs.

Tough decisions

*In tough times, think strategically: Identify strategic issues, focus on your core business and core customers, and make tough decisions. *Start an analysis of products and services by drawing a matrix, with revenue on the vertical axis and mission on the horizontal axis. Direct your resources to those items that fall in the high revenue/high mission (i.e., relevance to mission) quadrant of the matrix. *Report on "exempt overtime" hours. Show members the value of your overtime - that is, what they're getting for free. (Annual salary divided by 2,080 hours per year equals the value of one hour of your time.) *Learn to delegate - maybe not as crudely as in the New Yorker cartoon "You're fired. Pass it along," but certainly with conviction. When staff come to you with problems, ask them to offer solutions. Don't back into the "I'll think about it for you" corner. Delegating to staff means taking the risk they will fail. With a good staff, it's worth the risk. *Save money by limiting access to your association's legal counsel. *No matter how satisfied you are with the service of your vendors, always go to bid on major expenditures and renegotiate prices. &Segregate major cost centers and then break down costs within them; rethink your assumptions at each step. *Test your mailing list; testing is a crucial component of direct mail efforts.

Pricing for value

* When you price a product or service, consider its value as well as it cost. What do you think it's worth? What will the market bear? * If most checks your association receives in payment for services or products are written by the employer rather than personally by the member, your offerings may not be as price-sensitive as you think; charge more. * Let your members pay with credit cards. Use of credit cards typically increases sales by 10 percent. * Maybe it's time to stop servicing some of your association's subgroups. See if it's cost-effective. It may be wiser to focus on your core groups.

Making money

* Tactics for surviving a recession aren't limited to cutting costs. They also include generating more revenue. Consider in what direction you might expand your product and service line. * An easy way to begin looking at your opportunities is to draw a tic-tac-toe grid. Label the columns of the grid "existing offerings"; "new, similar offerings"; Label the rows of the grid "existing markets"; "new, similar markets"; and "new, not similar markets." In each box of this market/product grid, define the appropriate strategy. For instance, you would expect continuous product and/or service diversification where "new, similar market" meets "new, similar offering," whereas to enter a "new, not similar market" with an "existing offering" requires only market development. *Rent out your conference room or share the facility with other organizations. *See whether there's a service you could be providing with a 900 number.

Assessing options

* Consider centralized purchasing, both within the departments of your association and for your members. Can you provide purchasing discounts for your members? * Shop the health care market on a regular basis. * Hire a freelance telephone consultant to analyze your phone bills. Are they accurate, and are you receiving the appropriate service for your needs? * Bit the bullet and use voice mail. It's here to stay because it's more efficient and cheaper than using a live body. * Develop an incentive system for staff who suggest cost-saving or revenue-generating ideas. *Be sure you're getting a discount for early payment of bills.

Cash on hand

* Accelerate your cash flow by moving back billing dates. * Sell your building and lease it back. * Negotiate now for office space. Find out what your colleagues have managed to levy in negotiation - for instance, 16 months free rent and splitting the finder's fee with the agent.


* Consolidate your publications. Put your newsletter inside your journal. * Piggyback mailings. * Now's the time to assess your book and tape programs because people may be less apt to travel and more prone to get the information they need from books and tapes. * Assess your publishing costs. Would it be more economical to let a publishing house publish your periodical? Conversely, maybe it's time to bring it back in-house. * Save as much as 5 percent of manufacturing costs by scheduling the printing of your publication during the printers downtime. * Reprice your publications. * Add postage and handling costs to publication orders. * Adjust the size of your brochure to the size of the paper going on the press; avoiding paper waste saves money. *If you publish a peer-reviewed journal, consider assessing authors a per-page charge. * If your're a professional society that is a 501 9c) (6) but acts like a 501 (c) (3), you may be eligible for the not-for-profit reduced postal rates. Legal counsel familiar with postal regulations can help you consider this possibility. * Be radical. Switch your four-color publication to a two-color one. * Save keystrokes. Ask for manuscripts on disk or take advantage of optical character scanner technology. It's much improved of late and can quickly pay for itself, depending on the volume of use. * Take a look at your competitors' magazines to see whether their advertising represents a market you could move into. * Sell video- and disk-based training programs to your members.

Member services

* Keep track of telephone calls, by both type of caller and nature of the inquiry so that you can target your market. It's also a good way to justify the value of your service to members. * People often join trade associations to get representation, but you'll represent the industry whether or not they're members. You need to promote the information your association provides. * Raise member dues. * Find funders to underwrite activities. * For philanthropics, the marketing message these days may be this: Now more than ever our clients and constituents look to us for funding . . . which is why we need your increased support.

Meetings and education

* Start up a certification program. Initiate a continuing education requirement for re-licensure. Offer a program for people to prepare for the certification process. * Use volunteers, students, and your members 'kids to help staff your annual meeting. * Offer programs on how to cope with this economy. * Use cash bars at meetings and eliminate food breaks during sessions. * Meet at a college campus facility or at a member's facility. * Set exhibit booth prices based on value, not just on last year's price. * Get sponsorships. Make a list of everything that could be sponsored. * Cut the number of hotel nights required to be spent at your meeting. * Offer regional meetings and telephone conferencing to maintain attendance. * Teleconferencing works best for narrowly focused discussions. * If you're paying for a speaker, use him or her more than once during the program. Piggyback the speaker's time with another group's use of the same speaker. Use in-town speakers. * If you're planning to use music at a meeting, consider using recorded instead of live music. * Hold your meetings in the off-season when rates are lower.


* Take advantage of expertise your members have to offer. For instance, if your members are computer experts, seek their advice when you make a systems purchase. * Offer part-time hours or job sharing. It requires that you have an infrastracture in place and that people sharing the same job communicate effectively. The cost savings on fringe benefits can be substantial. * Implement a flexible benefits plan whereby the employee uses pre-tax dollars to pay for certain benefits; these pre-tax dollars reduce your social security tax. * Change your workweek from 37.5 hours to 40. * If your need to downsize, talk to someone who has already done it to get advice on such things as encouraing attrition (by offering early retirement) and offering outplacement support. *It's a good time to get rid of the deadwood. Fire those people you know ought to be fired. * Think about cutting benefits before cutting salary. * Do a thorough cost analysis of services and products you provide. Maybe it's cheaper to farm out some of what you're doing in-house. * Lease your employees. You pay a flat rate to a leasing agent. * Stop using temps. * Use one support staffer for several departments.


* Cut down your decision-making time. Get your members to let staff make operational decisions and be accountable for the results. * Always ask: Is this meeting necessary? * Cut the size of the board. * Use local task forces for issues not requiring geographic representation.

One last tip

What does it all mean? Well, it seems to come down to managing opportunities and threats. A number of items in the list are things that, as Ernssthal says, we all know we should do; we just don't. There are all sorts of excuses not to take any of these suggestions. His advice: Do what needs to be done. Just do it.
COPYRIGHT 1991 American Society of Association Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:includes related article; survival strategies for the recession
Publication:Association Management
Date:Mar 1, 1991
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