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Generation X
Generation Y

Raising Membership Roi: 3 Threats Challenge Future Of Associations

Last week, XYZ University hosted a workshop for membership associations on how to increase ROI. Now, more than ever, associations need to be able to prove beyond a shadow of a doubt that membership provides a return on investment to their members.

Last week, XYZ University hosted a workshop for membership associations on how to increase ROI. Now, more than ever, associations need to be able to prove beyond a shadow of a doubt that membership provides a return on investment to their members.

Demographic shifts, changes in technology, and a declining economy have merged to create a relentless three-headed monster for membership associations to combat. What members held valuable yesterday doesn’t necessarily hold any value today. As a result, trade associations, chambers of commerce, and civic organizations, are experiencing declining revenues and memberships and struggling to navigate this uncharted territory.

Indeed, this three-headed monster (demographic shifts, technology, economy) seriously threatens the future of associations, yet just one of these traits stands alone as the greatest threat of all: the demographic shift.

For the past 10 years, I’ve been talking with associations about the approaching demographic shift. While most associations have been aware of the shift all along, few have done nothing about it.

Unfortunately, the declining economy did nothing but prolong the inevitable and perhaps set associations up for an even greater fall. Alas, Baby Boomers are finally starting to exit the workforce–albeit slowly at first. Like a hole in a dam, we can expect this trickle to burst sooner than later.

This shift in human capital — the largest shift in our country’s history–poses the greatest threat to associations because most remain entirely governed and supported by the Baby Boomer generation, and few have or are developing plans and strategies to cushion themselves from this massive exodus of board members, committee chairs, and dedicated volunteers.

For more than two centuries, the inner workings and overall purposes of membership associations remained the same. Technology dramatically changed the existence of membership associations in the 1990s, but that hurdle pales in comparison to the generational shift that’s about to take place in the twenty-first century.

The passage of the Baby Boomers will mark the end of an era, the end of the membership association as we know it. Even now, most membership associations believe they have approximately 20 years to coast until all the Baby Boomers have retired. But that’s being overly optimistic. Membership associations that refuse to implement change and interest younger members have a 10-year life-span–at most.

So what’s an association to do?

Here’s a ‘cheat sheet’ of what I covered in the Amplify Association ROI workshop last week:

  1. Focus on giving.When the market starts to decline, the first reaction is often to increase dues or cut expenses which often means cutting member benefits. This is a mistake. Rather than cutting back, your association needs to be concentrating on adding more value. The members need to know your association is investing in them and helping them through a very difficult economy–and you need to keep these members from jumping ship. The market is more demanding because it is more needy right now, and your association has to meet these expectations. Your association has to give more than it takes right now to prove its a worthwhile and meaningful investment.
  2. Consider your purpose.Does your association offer a really compelling reason for members to join? Because all members–especially younger audiences–are very selective right now about where they spend their time and money. Younger generations can create networks and access information on-line and often struggle to see what additional benefit an association membership can provide. Identify what makes your association unique and the ROI of becoming a member — what unique, exclusive, relevant benefits a member stands to gain in return for paying dues– and your association will have an easier time retaining and recruiting members.
  3. Focus on the future.In today’s society there’s a fine line between honoring traditions and getting stuck in the past. If your association is doing things the exact same way they’ve been done for the past 20, 10, or even 5 years — it’s probably time to start thinking about things in the present tense. Keep in mind that to a 20-something raised on technology, today is practically history. This is a generation that is always thinking about what’s next and wants access to things that are relevant to their lives, especially things that are new and cutting-edge. If you’re keeping certain traditions in place, make sure you also introduce some new, hip programming that appeals to the next generation. The same old bags of tricks aren’t going to entice this crowd.

There are three major challenges that associations must overcome right now. The economy is on the path to recovery, technology is here to stay, and the demographic shift is just beginning. From now until 2030, every 8 seconds someone will turn 65.

Members of all ages are questioning the value an association membership brings right now, but the youngest will continue to pose this question for the next 19 years. They will demand a return on investment unlike any other generation that has come before them.

Borrowing an excerpt from my book, The New Recruit: What Your Association Needs to Know About X, Y, & Z:

The Boomer-centric associations still think they can launch something new and it will resolve all their recruiting woes. These associations have overlooked the simple fact that the vast majority of their membership will retire in the next decade or two—and the generations to follow are radically different from the generations of the past two centuries.

Membership associations have not experienced anything like this before. Generations X and Y have completely different values, interests, needs, and wants from the generations before them. Their worldview, their priorities—everything about them is different as a result of their social experiences.

Generations X and Y will not respond to the recruiting efforts of the past. An entirely new approach is required. Everything about the membership association has to change. …

The Boomer-centric associations will refuse to change or fear change. These are the associations that are considered endangered species and likely will be extinct by the year 2020. The New Recruit associations realize the need to recruit and retain younger members and invites younger generations in to help them make the change. These are the associations that will succeed and survive.

Which association do you want to be?”

Zs came of age in an era of disruption

In many ways, it’s symbolic that Generation Z is named after the last letter in the alphabet because their arrival marks the end of clearly defined roles, traditions, and experiences. After all, Gen Z is coming of age on the heels of what has been referred to as the most disruptive decade of the last century. America has become an increasingly changing and complex place.

For example:

  • ‍Zs were born into a “modern family era” in which highly involved dads help out at home, and the nuclear family model (two parents, married, with children) represent only 46% of American households.
  • ‍Zs are the first generation to be born into a world where everything physical, from people to places to pennies, has a digital equivalent.
  • From the time they were infants, Zs had access to mobile technology. As a result, their brains have been trained to absorb large amounts of information, and Zs are especially adept at shifting between skills and subject matter.
  • Zs tend to have crystal-clear memories of sitting up for the first time at six months old because they can easily and quickly reference the photos and videos their parents shared on social media or saved in the “cloud”. 

Members of this generation have undoubtedly been shaped by crisis and disruption. This generation will largely be responsible for confronting the aftermath of the Great Recession, high youth unemployment, the effects of climate change, terrorism, energy sustainability, and more. These dark events have undoubtedly made this generation more cautious and pragmatic, but they have also provided this generation with the inspiration to change the world – and their grit will likely allow them to do it.

Coming of age during disruption means that most Zs will be comfortable being the disruptors. While Millennials tend to be collaborative and innovative, this generation tends to be sincere, reflective, thick-skinned, and self-directed, and will likely approach work in much the same way.

Zs were raised to be competitive

In the era following World War II, Boomers (1946-1964) were born and eventually became the wealthiest, most prosperous generation in history. Raised to aspire for the American Dream, this very large generation moved into positions of power and influence, and served as the workforce majority for 34 years.

With the American Dream alive and well, Boomers had no reason to teach their children, mostly Millennials, about competition. Instead, they taught them to focus on academic achievement and to be team players because if everyone works hard, everyone can win.

Enter Generation X (1965-1981). In contrast Boomers, Xers came of age during a time when change and economic and political uncertainty began to take root. They have lived through four recessions, struggled with debt and economic decline most of their lives, and watched the best educated and accomplished generation of all time (Millennials) graduate during the Great Recession and become the most debt-ridden generation in history.

Gen Xers can be defined by their independence and anti-status quo approach to life, and they have taught their Gen Z children to be competitive, believing only the best can win. They have encouraged their children to be realists, finding something they are good at and aggressively pursuing it.

Xers have raised their Zs with an intense focus on competitiveness -- in academics, sports, and other activities. This approach to parenting has many implications, but one stands out in terms of business: Gen Z is likely to lead.

Millennials in the workplace created and aggressively advocated for collaborative work environments. In fact, their aversion to leadership has been so strong, some Millennials sought out companies that boasted boss-free or team-managed workplaces.

In contrast, Zs have been raised with an individualistic, realistic, and competitive nature. They have been taught the skills to successfully defy the norm. This means we’re going to see the pendulum shift away from collaborative workplaces towards a widespread demand for, and pursuit of, leadership development.

Zs are career-focused.

While Millennials have been criticized for their “delayed adulthood”, Gen Z is showing signs of “early adulthood”. Educators and parents often describe this generation as being more serious and contemplative about the world. Zs are thinking about their career paths and exposing themselves to career training at an earlier age than Millennials. It’s probable that some of this early onset of adulthood is caused by parents, who are pressuring their children to be competitive and successful and to avoid the debt that plagued both the Gen Xers and Millennials.

The numbers from our global research found 46% of Gen Z said they know what career to pursue and 51% have taken a class at school focused on their career interests. Forty percent joined an extracurricular program (team, club) based on their career interests.

Zs are seeking financial security. 

Zs have been shaped by the aftermath of the Great Recession. They watched Millennials become debt-ridden and are concerned about falling into the same trap. XYZ University’s survey results show 66% of Zs said financial stability is more important than doing work they enjoy, which is the exact opposite of Millennial survey results.  Also, 71% of survey-takers have a paying job.

Zs value leaders who are positive and trustworthy.

When presented a list of leadership traits, Zs ranked positive and trustworthy the highest. While Millennials and Gen Zs both value trust in a leader, Millennials usually cite collaboration and vision as most important. In other words, Millennials focus on the outcomes leaders inspire, whereas Zs are more likely to consider leaders’ attitudes and personalities. To Z, what leaders encourage others to do isn’t as valuable as how they make them feel.

 

Zs want to be challenged.

Both Millennials and Gen Zs place a very high value on feeling challenged and appreciated in the workplace. However, according to our survey results Millennials rank appreciation slightly higher than challenge, whereas Zs rank feeling challenged slightly higher than appreciation.

Time will tell how Zs go down in history, but we know this generation’s influence on history will be unlike any other.

 

Does your organization have what it takes to engage the next generation? Take this quiz to find out.

 

Sarah Sladek is CEO of XYZ University. Our generational intelligence can assist you with engaging and retaining young talent and members.

Sarah Sladek

Concerned about declining engagement in our nation’s membership associations, non-profits, and workplaces, Sarah Sladek founded XYZ University, the nation’s first and only generations-focused training and engagement strategy company, in 2002.

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