Membership dues might not be the most flashy aspect of building a community, but they are the fuel that keeps programs going.
Maybe you organize a membership program and need a way to determine pricing, payment schedules, tiers, and how to collect dues. Or maybe you're a prospective or current member of an organization, curious about why membership dues exist and the value they offer.
Either way, you've landed in the right place. Below is just about everything you need to know to understand, manage, and track membership dues.
What are membership dues?
Membership dues are the fees someone pays to an organization to gain entry or involvement. You'll often see nonprofits, associations, chambers of commerce, professional societies, and clubs with membership programs.
Organizations provide value through dues paid by members, which are typically collected regularly. Some organizations have monthly dues, and some use annual models, which we'll explore shortly.
Why membership dues are so important to associations, chambers, and other organizations
- A great source of revenue: Membership dues introduce another income stream to fund operations and expenses and impact revenue recognition.
- More value for members: Dues increase the services and benefits organizations can offer, making membership programs attractive to new members.
- Financial stability: Organizations can better predict and strategize their budgeting decisions to grow steadily.
Membership models: multi-year vs. annual vs. monthly dues
Below, we'll discuss two common membership models, providing opportunities and points to consider as you decide what's best for you.
Understanding membership tiers
Membership tiers help organizations offer members options at various price points and benefits. The structure also allows people to grow their commitment and see more value.
Top tips for creating and pricing membership tiers
- Research your ideal members: Start by analyzing the demographics, needs, preferences, and challenges of current members. From there, create tiers that offer them the most value.
- Define the value of each tier: While your middle tier may equate to the average dues you plan to charge, you can create a tier below and above that. For each, consider the value correlating to the monetary contribution and clarify that distinction for members.
- Show the benefits of growth: Make sure to leave members wanting to move up a tier by showcasing the ease of progression and offering benefits that appeal to them.
- Consider accessibility: Make sure lower-tier memberships still feel included, giving members more options to stay involved instead of churning if financial strain or uncertainty hits.
Calculating membership dues
Whether you're using an annual or monthly structure, with tiers or without, calculating membership dues carefully is critical. Below, we'll walk you through important considerations for pricing your membership dues and a simple formula for implementing what you learn.
How much should you charge for membership dues?
The first step to calculating membership dues is to assess your organization's costs.
Here are some costs you'll want to keep a pulse on from your financial statements:
- Operational costs: Employee salaries, rent, utilities, tech, and admin expenses
- Program costs: Events, education, publications, and member services
- Marketing costs: Expenses from member acquisition and retention
- Advocacy costs: Where applicable, these costs are associated with lobbying efforts and advocacy for specific causes members join to support
From there, you want to understand your revenue goals for the year. Examining industry standards and what similar organizations charge members is also helpful.
Membership dues formula
The following formula will help you determine annual and monthly membership dues. You can land on a base price that you can adjust slightly for your preferred tiers.
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To adjust for tiers, you can take your base membership dues and subtract or add the percentage that you determine to be equivalent to the value of each tier.
How to increase your membership dues
Naturally, membership dues will increase with the economy and an organization's growth trajectory. The membership dues formula is a great tool to return to.
As an organization's costs or tier values increase, the formula will produce the impact it may have on dues to maintain scalability.
Top tips on collecting membership dues
Now that you know what to charge, let's discuss the best way to collect membership dues. The following tips will help you build a new membership program, manage price changes, or refresh your current program to boost retention.
Explain the value
Whenever you ask members for dues, it's important to reiterate the value they will receive from the transaction.
Be sure to:
- Highlight specific benefits of being a member each month
- Showcase the impact that the membership program has
- Emphasize cost savings and discounts for members
- Introduce networking and community-building with other members
- Be transparent about how dues are used
Lead with gratitude
Always thank members for their commitment to your organization and let them know how their contributions make the program possible.
Here are a few ways to say thank you:
- Personalize messages of appreciation
- Highlight members online and on social media
- Share perks for members who hit certain milestones
- Ask for feedback as a way to show how much each member means
Make it easy
Add the easiest way for members to take action on your communications. Whether you're trying to get them to pay monthly dues, prompt them to upgrade to a new tier, or remind them of an upcoming renewal, make completing the transaction as easy as possible.
Make sure your members can:
- Scan a QR code or click right from social media or emails to get to a simple payment page
- Use any device they'd like without hitting barriers
- Complete payment with any method they trust and love
- Finish their transaction with only a few clicks
- Receive automatic confirmation of each payment
Communicate membership dues and price increases
Transparency is key when it comes to communicating your membership dues. The sooner you update members about an impending price increase, the better.
Imagine how much better it feels to get a 60-day preview of a membership due increase instead of a few day's notice. That extra time to nurture your relationships and share the reasoning behind the increase (and the added value for members) goes a long way to retaining them.
Lean on membership management software
Membership management software can make personalized and frequent communication much easier. Automation and insights drawn from strong data strengthen membership programs.
Zeffy’s 100% free membership management solution helps organizations:
- Import existing donor contacts and past transactions
- Automate information updates with each new transaction
- Export and filter contact lists
- Add notes within donor files to further personalize relationships
- Tag donor profiles to support donor segmentation
- Automate emails and visibility into communication history
- Access receipts for donors and fundraising campaigns
- Track payment methods by donor and segments
- Automate tax receipts and reminder emails
- Pre-fill donation forms customized to the donor by campaign type
Case study: Greater Lowell Chamber of Commerce's successful membership program with Zeffy
The Greater Lowell Chamber of Commerce transformed its operations with Zeffy's membership management solution and fundraising platform. With a smooth way to strengthen the community and collect contributions, the Chamber raised $3,100 in annual membership dues and saved $155 in fees.
The organization uses creative language to position the membership dues as an investment that offers strong value to businesses that sign up. The customized online membership form’s flexibility offers annual, monthly, or quarterly plans to capture a wider array of members and sustain predictable revenue.
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Membership dues: FAQs