How Do We Talk About Price without Talking About Price?

This blog is a part of a greater series called ‘Ask Dr. Michael’. In this series, we are answering your questions right here in the blog. Don't worry, everything is anonymous and we will not be sharing the name or organization of those who submitted, but if they have a question that can benefit the greater audience, we want to answer it so that you have the best value from our content. 

Today's question is, “How do we talk about pricing, without talking about pricing? Not sure about everyone else, but I see that word in any association context, and I have an allergic reaction, and then have the urge to throw a glass against the wall.”

This is a great question because within the nonprofit space, we don't like to talk about money or pricing, especially pricing, because we feel like pricing is about greed.

So we shy away from it.

But the reality is if you have set a price for anything -- and all associations do because we are selling products whether it's membership, education, certification, events, sponsorship, etc -- then you need to have a pricing strategy and we need to discuss pricing. 

I do have some tips on how we can soften the blow so that it doesn't come across in a negative way:

• First, we have to look at pricing as financial sustainability. 

  Imagine a pie. You've made this great pie and your members each get a piece of the pie. The piece of the pie that they get is the value that they receive from being a member, so it might be access to articles, to discounts, to networking, to a career center, to professional development, to up-to-date lobbying and legislative recommendations -- all of this is their piece of the pie. Your piece of the pie is the price that you charge for them to have access to this value, and the price that you charge is directly related not only to the value, but it then equips you to have financial sustainability so that you can execute on the value that you've promised them, as well as amplify more value by coming out with updated products or brand new products that will continue to help them as an organization and as individuals. So the first thing I want us to do is remove that pricing is about greed or about trying to get as much money as we can, and instead look at it as financial sustainability. How do we not only balance the budget, but how do we also keep a healthy reserve? The reality is a recession happens about once every 10 years, and we just went through a once-in-a-lifetime global pandemic (knock on wood that it was once-in-a lifetime).

  How many of us had healthy reserves that helped us to sustain our staff and our programming and allow for us to give things away for free without hurting us? 

  That's the power of pricing. 

  That's the power of having healthy financial sustainability. 

  If you were not in that position, and you had to lay people off, or you had to be careful about giving too much away for free, or you ran out of reserves, or drastically hurt your reserves, then there's probably a case to normalize the word “price” and see it as financial sustainability.

• The second thing that I would add is pricing and financial sustainability are really about what it takes to drive the mission forward. 

  How do you execute your mission? 

  It costs money to execute your mission. If your members and sponsors expect for there to be real value from your association, then they know that they have to pay to play in order for you to create the environments and the value and the resources that they need from you. 

  I don't know about you, but I am a member of other associations, and I want to pay my dues. I want to pay to go to luncheons. I want to pay to go to annual conferences. I want to pay for continuing education because I not only want the value that I get from that, but I also want to empower my organizations to do even more work and reach new members, and reach new sponsors, and be sustainable, so that I can continue going back and getting what I need from them. 

  We know this, and it makes sense, but when we are on the staff end, we still might cringe at the word “price”. 

  At the end of the day, cringing about price is about mentality, and if we can disassociate the word price from greed, and instead associate the word “price” with financial sustainability and driving your mission forward, I think we'll be able to swallow that pill a little bit more easily.