I'm a bit late in here because we're in the middle of leaf season but have to share this. I got an email last week from our provincial B&B association. It's renewal time and they are reducing their membership fee by more than half!
They are doing this as part of a strategic plan to significantly increase membership; and they realize the best way to do this is to make it affordable and accessible to every B&B.
They understand that in these economic times, they will lose members if they don't change their model. And of course losing members means losing $$ to support the association. They have also cut back on one of their biggest expenses by changing the format of their printed booklet to a map-style print piece. Of course they also have an online directory of members.
They are also adding price-reduction incentives for regional associations to join them. The goal is to grow the association--and to grow the coffers--on volume. The association has a small portion of the market and stand to do well. As more members join at the reduced cost, they will spread the word to their regional groups and it has the potential to grow exponentially. At the same time, the online directory will grow, making it a more useful tool to travellers and guests.
From my own experience talking to B&B's in my area, I can see this strategy working. Within my region I can count about 15 B&B's who do NOT belong to the provincial association and only 2 of us who do belong. Of the ones that don't belong, at least half of them have cited the cost of membership as being the reason. This is on the agenda for our regional AGM next week.
I really hope Eric & John of B&B.com are reading this and realizing that this is a viable, sound, pricing strategy for increasing the bottom line. It's win-win-win. The little B&B wins because they can afford to play withe big boys. The guests win because they have a robust directory to peruse. The organization wins because their revenue increases at a much higher rate than their expenses.
I'm not trying to re-beat a dead horse here. It's just perfect timing and makes me SO HAPPY to see that sometimes things actually work right..
Very interesting. We have discussed NOT doing a printed directory every year. I think they will bring this up to the membership for discussion at our annual meeting.
Unfortunately, we depend on our member dues to pay for our marketing and our staff..so cutting dues even though it sounds good.We have committed $$$ to a new web site for the coming year $25K at least...same to pay for printed directory..so this would not be the year for us to cut dues.
I am not sure would work for us. But I do see your point.
Also, our members must be inspected and approved and there are many inns out there who will not meet or want to change to meet our standards. So just because they are an inn, does not mean they will qualify to join our association. There are many we do NOT want:-(
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Our member B&Bs are inspected and approved before joining, too; and there would certainly be some that wouldn't meet the standards.
I think a major determining factor in whether or not this could work is the existing market penetration. If an organization has only a small % of the total market potential, then the pricing strategy is very likely to work.
If an organization already has a large portion of the market, then there is little room to grow, and the strategy becomes risky.
In the case of our provincial association, they only have about 10% of the market. That's to say that only about 10% of the B&Bs in the province are currently members. There is a LOT of room to grow that number. If the association gets even 25% of the market with the new strategy, it will be worth it. They're aiming for 100% of eligible B&Bs, and I think even 50% would be in fairly easy reach. It won't happen all at once, but it's the kind of thing that snowballs. Increasing membership by 500% while reducing fees by 57% is good math.
That's why I think it could work for B&B.com too. They seem to have only a small portion of the small-B&B market segment. Lots of room for growth there.
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