Like many associations, the National Association of Sports Commissions froze meeting registration fees through the recession to keep costs down for attendees during tough times. But this year, hoping that recession had eased, leadership decided it was time to raise fees a few percentage points. “The board said, we have a great product and with the additional fees we can really do a great conference,” explains Beth Hecquet, CMP, director of meetings and events for the Cincinnati, Ohio–based association. The strategy paid off, as NASC had record attendance at its 2011 Sports Event Symposium, April 12–14 in Greensboro, N.C.

Now is the time to re-examine registration fees, experts say, as associations are coming off a period of shrinking revenues. In 2010, revenues dropped 8 percent for exhibitions, according to the Center for Exhibition Industry Research, marking the third straight year that revenues fell. Then there’s inflation. “As the economy starts to come back, associations are going to have to raise their fees in order to pay for the increases at the hotels and convention centers,” says John Parke, CMP, president and chief executive officer, Leadership Synergies, a Prince Frederick, Md.–based management consultancy. 

The right pricing strategy can increase attendance, encourage early registration, and maximize income. So how do you know when the price is right?

Do the Math

Typically, an association gets one-third of its yearly income from its annual meeting, and registration fees are a big part of the equation. However, a fee that’s too high can be a barrier to entry. That not only affects revenue generation, it hurts the mission of the association, which is not delivering to members who have been priced out. On the other hand, a fee that’s too low may not help the association meet its bottom line, which means it will lose revenue.

Pricing Tips: 1. Be sure to cover your costs. You can’t make up your losses with volume. 2. Don’t have dramatic swings in pricing. Changing your price too often or too much creates doubt about value in members’ minds. 3. Always have a reason for a price change. If you don’t people will wonder if you are just making this up as you go along. 4. Price creates perceived value. Consumers create an expectation of quality in their minds based on the price you set. 5. Instead of changing your price, use coupons, discount codes, sales, or other price marketing tools. These make people feel as if they got a deal, creating additional emotional value for the purchase. – Joshua Caulfield, Caulfield Ricks and Associates

“Pricing is critically important,” says Parke.  “[Association executives] have to decide whether their price point is going to appeal to the largest potential pool of members. It’s not dissimilar to what hoteliers do when they are looking at revenue management.”

Many associations base their fees on what they charged the prior year, says Andrew Lang, president, Lang CPA Consulting, Potomac, Md., a firm that consults with associations. “But there may be a question about whether they originally set the price in a sensible way.” Often, he says, prices are originally set lower than they should be to attract more attendance.

Any pricing strategy should start with an analysis of the cost of the meeting, experts say. Association executives should tally up the cost of the meeting, including not only direct costs (space, food and beverage, transportation, materials, speakers, complimentary registrations, etc.), but overhead costs as well, such as staff time. “All too often associations, especially smaller associations, don’t account for the cost of staff time. Yet staff time comes with a whole load of additional overhead,” says Lang.

Ultimately, planners should calculate all costs and develop a cost per person to attend based on anticipated attendance. To estimate attendance, planners should look at not only the previous year’s numbers, but a multi-year snapshot of attendance trends, says Joshua Caulfield, president, Caulfield, Ricks and Associates, a Kensington, Md.–based association management company. They should also factor in the affect of the destination, as some cities may be a higher, or lower, draw.

Many associations, including NASC, make this calculation to establish a break-even number. Then, on top of that, they add in the amount they’d like to generate in revenue. So if leaders would like to generate $100,000, that amount would be added to the expenses and then divided by the number of paying attendees.

Scan the Competition

The next step is to look at the competitive environment. This is important, especially now, says Parke. “Before the recession hit, many people belonged to two or three associations, but because of budget cut-backs, they had to narrow it down to one.” Now, more people have to make a choice and often they are going to go with the association that offers the most value.

Association planners should do two types of competitive analysis, he says. They should look at the fees charged by associations with meetings of similar sizes and budgets, regardless of the field they represent, to get a benchmark of what other like-sized associations are charging. Association leaders are often happy to share the information, says Parke. If not, the fees can usually be found on the association’s Web site.

Then, they should look at the competitors within their field to find out— either through direct contact or the Web —what they are charging. Competitors within the industry may not be the same size and may focus on a different niche, so it’s not a direct comparison. “I encourage people to do it only as an environmental scan, because your conference should be promoted in such a way that it doesn’t look like anyone else’s, otherwise, why should someone choose yours over theirs?” says Caulfield. However, people are limited in the number of conferences they can attend, so knowing the competition’s price points is important, he adds.

Additionally, association leaders should do a “lost business analysis,” says Parke, which means surveying members about why they haven’t attended in the past. If numerous responses cite high registration fees, then planners need to take that into consideration.

While the competitive environment shouldn’t dictate pricing, association executives should account for it when setting fees.

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