Leveraging Partnerships to Boost Membership Value
Partnerships with outside companies and organizations offer associations an effective way to provide member value, generate revenue, and grow the association. The North American Association of Floor Covering Distributors (NAFCD), for example, has established several strategic partnerships over the years as a way to launch new programs in cost-effective and risk-averse ways, explains NAFCD Executive Vice President Kevin Gammonley. “That’s been our model for how we grow NAFCD and move forward on the association’s objectives,” says Gammonley. As another example, the Healthcare Business Management Association (HBMA) recently leveraged a partnership with a company to launch an industry accreditation program. The key to success for both of these associations lies in knowing who to partner with — and why.
Partners Central to NAFCD Growth Strategy
Like many associations, NAFCD was looking for ways to leverage its limited resources to create and launch new programs for its members. Many programs require not only a sizable monetary investment, but also the time, attention, and resources to both get them off the ground and maintain them. Through partnerships, however, NAFCD has found a way to provide a multitude of valuable member services. At the same time, the partnerships have helped the association achieve steady growth in revenue and membership and deliver on its strategic objectives. “Our strategic partnerships powerfully enhance our value proposition,” Gammonley says. “There are entities and organizations in our environment that are experts in different areas and they bring training, education, content, or advocacy to our members through partnerships.”
One of the areas where NAFCD leverages partnerships is for gathering data used for industry intelligence, research, the development of industry statistics and trends, and more. The association developed a strategic partnership with a consultancy that does research on topics relevant to NAFCD’s membership base. The research firm typically sells this information to individuals and organizations through subscriptions, but NAFCD worked out an arrangement through which the firm will provide industry-specific information to the association and its members. Each NAFCD member company gets a quarterly report. This is valuable information — and expensive if members were to subscribe on their own — but now members get it as part of their membership package. The partner is positioned as a thought leader, having been identified by the association as an expert. It also gets additional revenue and the potential for future sales opportunities from members due to the exposure they’ve received.
NAFCD also partners with companies that provide online education, training, and advocacy. The process of identifying potential partnership opportunities starts with NAFCD’s strategic plan, explains Gammonley. “We look at the objectives in the strategic plan and think of ways to provide value for members and the association.” Then the board appoints staff members or a committee to seek out partners in the industry that can help develop programs.
The financial arrangements vary from partnership to partnership. In some cases, members might pay a fee for the services provided by the partner, but at a discounted rate. If the utilization rate is high or meets an established threshold, the association could get a portion of the revenue. This, of course, provides the association with an incentive to market the program to members, which keeps partners happy. In other cases, NAFCD pays a fee to the partner for the service while the member pays nothing. But part of that fee might be offset by offering the partner a booth or sponsorship at the association’s annual event.
HBMA Launches Accreditation Program with Partner
Due to the ever-changing nature of the healthcare regulatory environment, HBMA found that the industry needed an accreditation program specifically tailored for members, who are primarily in the field of revenue cycle management. Members had found that more and more of their clients were demanding that they have some form of certification, but no options existed that were specifically related to revenue cycle management companies.
HBMA Executive Director Kurt Gallagher said that the association realized a partner could help it more efficiently create and launch an accreditation program. In addition to the attractiveness of sharing costs, HBMA knew it needed an independent party to conduct assessments and then ensure companies remained in compliance.
HBMA assembled a task force to oversee the initiative and explore potential partners. Initially, they looked at partnering with a company that had a certification program for medical billing companies, explains Emily Osetek, the HBMA board member who served on the task force. However, that particular program was not focused on all the issues related to the roles of HBMA members, and the potential partner didn’t have the expertise needed to make it work.
In the fall of 2017, HBMA connected with a company called Healthcare Compliance Pros (HCP), which had several different compliance certification programs. HBMA and HCP came up with a plan to combine aspects of several of these pre-existing programs into one. The result was HBMA’s Compliance Accreditation Program, which sets standards to help safeguard patients’ protected health information in accordance with the Health Insurance Portability and Accountability Act. They beta tested it in the spring of 2018 and by fall of last year — one year from inception — it was ready to be rolled out. “We could have never afforded to implement this program through HBMA without the partnership,” Osetek says. “Or done it nearly as fast.”
HCP administers and runs the program for HBMA. Fees are paid to HCP and HBMA receives a percentage of the revenues through a royalty agreement. The companies who go through the accreditation program get an exclusive discounted rate from HCP. The fees are based on company size.
For HBMA, the program raises the organization’s profile in the industry and generates revenue both through the fees and by attracting new members, says Osetek. HBMA has already had four companies go through the program, three since the start of the year, and has seen a great deal of interest from both members and nonmembers. Members get a much-needed way to validate their processes and meet industry standards, which helps them stand out in their field. HCP gets revenues through the program and it raises their profile being associated with an industry leader like HBMA. In the end, everyone wins.
Keys to a Successful Partnership
Successful partnerships must check several boxes to work. They must fill an unmet need for members. They must be more cost-effective than what could be produced in-house. A good partnership should be less risky to the association because it requires less time and resources, and the chances of it being successful increase due to the partner’s involvement. However, partners must be willing to adapt to the specific needs of the association. And, above all, a successful partnership should provide value to the association, its members, and its partners.
FEBRUARY 2019 EDITION
| Board Forward is published 10 times a year by SmithBucklin, the association management and services company more organizations turn to than any other. SmithBucklin has served volunteer board members for 70 years.