Fair warning: This blog post is going to upset you.
I was asked a question I’ve never been asked before this week…not once, but twice. Many of you know that I’ve been on an extended road trip, driving across the country with stops at Chambers in the Phoenix area, across Colorado, and now into California. Twice in 3 days, a Chamber executive asked me what I would change FIRST if I were to step in and take their place running their Chambers. I thought about it for a second, but I knew the answer immediately.
The very first thing I’d change if I was the new CEO in Durango, Colorado or Buckeye, Arizona or YOUR Chamber is to immediately stop prospecting to any business that hasn’t been IN business for at least 2 years. In fact, I told both executives and several other people since, that I would make it a cause for termination offense for any membership professional in my organization to prospect a new business that hasn’t crossed that threshold.
Now, I hear you over there…laughing or cursing or calling me delusional. I know, it’s radically different than what we’ve always done. I am well aware that there are people who are UPSET at that idea. You’re upset for one of a couple of reasons:
- You’re saying “Come on Jay, that MAY work at a larger Chamber, but we’re too small to do that.” In essence, you feel I’m painting with too broad a brush.
- You believe that it is the MISSION of the Chamber to help smaller, newer businesses grow stronger and larger.
- You’re wondering why you didn’t think of it yourself years ago, and you’re kicking yourself for wasting so much time and energy for this long.
Let me explain before you all start chasing me around with pitchforks and torches. According to a 2002 study, new businesses have a 55% chance of surviving three years.
Interestingly enough, average first year retention for Chambers around the US is 55%. So let’s dig deeper. Let’s answer some of the questions above and let me tell you WHY I’d be so adamant about not going after younger businesses.
- First and foremost, let’s address the elephant in the room. I am NOT suggesting that you don’t ALLOW start-up businesses to join the Chamber. I’m simply saying that I wouldn’t allow my membership team to take the time to TARGET them. If someone walks in your door and wants information or is ready to join, GREAT! Welcome them to the Chamber. Otherwise, we’re going to wait until the business proves itself viable and sustainable before we spend our time chasing them down. In fact, this is REALLY going to make you think: Not every business in town DESERVES to be a member of your Chamber. Only once they’ve proven themselves should they be allowed to display your logo, your VERY valuable “Seal of Approval”. Think about the message that sends to members and non-members alike.
- No matter how small your organization or your community is, you are NOT at a 100% penetration rate. In other words, every business in town is not a member of your Chamber. That said, you can stop going after the brand new businesses and you’ll STILL have plenty of existing, sustainable businesses to prospect from. And even if that’s NOT true for your community, you can spend more time cultivating relationships that more deeply engage your existing members and increase your revenues from them FAR beyond what you could do by constantly recruiting and recruiting and recruiting new businesses that most likely won’t be around to sign that 2nd renewal letter.
- Think through the numbers with me. Add up the TOTAL compensation you or your membership professional receives. Don’t forget to add in the value of benefits, time off, etc. Now divide that dollar amount by the total number of hours you expect to work throughout the year. That will give you a value of your own hour. How much time are you willing to devote to chasing down a new business? How many do you have to visit with in order to sign a new member? What is the lifetime value of that new member, assuming they come in at the lowest possible investment rate and stay no more than 2 years? What is the likelihood that those newest businesses will need the most help…demand the most time of you…and how much time are you currently spending attending to those “squeaky wheels” and putting out fires relating to them? What’s the REAL return on investment for the REAL time spent working with them when we know they are only 55% likely to stick around past that first year? And the most important number in my head, how much time would you get back in your calendar to spend working on engaging larger prospects and members with more money to spend and fewer needs?
- What about the fact that we SHOULD be helping those smaller companies succeed? Wouldn’t they have a BETTER chance at reaching Year Three if they had our help? SURE they would. But do you have the resources to do as much as they need? Can you afford to be everything to everyone, or would your organization be stronger if we focused on helping those who can do more with less FOR less? If they come to you, sign them up and help them every chance you get…but remember that we have a larger purpose, and that we work for EVERY business in our community, whether they’re a Chamber member or not. You’re going to be helping those small non-members by advocating for a stronger local economy. They’re going to benefit from the work you do at City Hall, in County Council chambers, at the State House and in School Board meetings every week. If you try holding EVERYONE’S hand, you’ll soon find your hands are both empty.
So there you go. I’ve said something that I think is going to be VERY new to most people, and I expect I’m going to get some push-back on it. I’m OK with that!!! In fact, I welcome it. Tell me I’m wrong. Explain to me why it won’t POSSIBLY work in YOUR organization. Comment below and let’s make this a real discussion. If I’m wrong, I’ll write a retraction…but I don’t think I am. I believe that we will better serve our existing members and our communities when we INSIST that Chamber membership is valuable and that businesses must pass the start-up phase (in most cases) to justify their inclusion. It means a higher retention rate for your Chamber, larger members taking up fewer resources, and more influence. At the end of the day, isn’t that what we ALL want?
More members. More money. More influence.
Work smart this week, Chamber friends…and rip the idea apart in the comments below.