John Madigan's Blog

Welcome!

Welcome to my blog.

If you don't know who I am, I have a brief bio here. 

If you're interested in connecting via social media, you can find me on Twitter.

I hope you enjoy reading.

Warm regards,

John Madigan

Graduation Speeches

It's that time of year again.

Here are two recent graduation speeches that are worth your time. First, Sheryl Sandberg's speech to the graduating class of Harvard Business School (HBS). Second, Jacqueline Novogratz' speech to the graduating class of Gettysburg College.

 

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Recommended Reading 2012 (second quarter)

Of the books that I've read so far this quarter (April, May, June), two have stood out among the rest.

These are the two titles I've read this quarter that I think are worth owning. When I say worth owning, I mean the book is interesting/valuable enough to warrant a second (or third) read. 

The $100 Startup by Chris Guillebeau
Through his writing, Chris offers "unconventional strategies for remarkable people." He writes about life, entrepreneurship, travel and non-conformity (among other topics) on his blog. This book seeks to bust the myth (and common excuse from people that say that want to start a biz but never do) that entrepreneurship requires large amounts of capital/financing. It's a quick and engaging read best suited for folks interested in starting a business on a shoestring budget. 

The Food Lover's Guide to Wine by Karen Page with Andrew Dornenburg
I've tried to read wine books before with no luck. Every book on wine that I've ever attempted to read was eventually abandoned. It read to much like a text book. It put me to sleep. Or it just wasn't very engaging. This book is different. It's easy and fun to read. And it's packed with practical advice on how to become more skilled in your appreciation of wine. Highly recommended.

Recommended Reading 2012 (first quarter)

Of the 10 or so books that I've read so far this year, three have stood out among the rest.

These are the three titles I've read this year that I think are worth owning. When I say worth owning, I mean the book is interesting/valuable enough to warrant a second (or third) read.

Hopefully you find one or two that resonate with you as well.

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The Behavior Gap by Carl Richards
A common-sensical book about the relationship between people and money. It's filled with great sketches that simulataneously simplify/explain why people do dumb things with money.

Steal Like An Artist by Austin Kleon
A quick read that will leave you wanting to create something. Creativity transcends all aspects of life (work, fun, etc.), but sometimes we all need a gentle reminder that we have (and should embrace) our creative side.

Stop Stealing Dreams by Seth Godin (free ebook)
A thought provoking read about the current state of education. For anyone who's ever wondered why there are so many problems with the current system and the questions we should be asking about how to fix them.

Chambers: Embrace the "Rotating Door" of Membership

This post is part of an ongoing series on Chamber of Commerce leadership, organization, and membership. The posts are intended for Chamber staff but anyone who works in a membership organization can apply the concepts.

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The Rotating Door

People have described membership at a Chamber as a rotating door. With every new member that signs up, another one cancels their membership. One in, one out.

And for many Chambers, that's the current state of membership.

The trouble is that having a consistent flow of cancellations is perceived as a very negative thing. When members drop, Chambers start worrying that it's a reflection of their performance. They start developing plans to shut down the rotating door at any cost.

But guess what? Instead of trying to shore up the rotating door, Chambers should grease and embrace it instead.

Embrace it

Why?

For two reasons:

First, the easier it is to drop membership (and less painful/stressful), the more likely it is that members will renew sometime in the future.

Second, dropped members can offer information that will make a Chamber even stronger.

Let me explain.

Greasing the Rotating Door

Have you been a member of a gym where they don't let you cancel over the phone? Or they require you to submit a form by mail in order to cancel? How did that make you feel? Would you consider joining that gym again? It probably wasn't a pleasant final experience with the establishment.

In contrast, how did you feel when it was incredibly easy and efficient to cancel a membership? Netflix allows you to cancel your membership with one-click. Simple and painless.

When you make it easier for members to cancel, you're leaving a member with a good last impression. Cancellation is after-all still part of the member service process (a very important part).

Here are a few important characteristics of the cancellation process:

• A simple process
• A communication of concern as to why the member is dropping
• An opportunity for the member to dialog about their reason for dropping

Chambers that have a cancellation process that allows members to cancel easily, learn why the member cancelled, and express a willingness to have them back in the future likely have better success recruiting previously dropped members.

Dropped Members as Information

The second reason to embrace the rotating door is because most cancelling members are offering the Chamber information, not a criticism of the Chamber and it's offerings.

For example, let's consider some top reasons members choose to drop their membership:

• Out of business
• Moving
• Financial difficulties

Instead of interpreting these drops as a negative on the Chamber, consider the following interpretations to the above reasons for a cancelled membership.

If a business drops because they've failed or out of business, then it's information about the type of businesses that are struggling in your community. 

If a business moves away from your community, perhaps it's too difficult/expensive to do business in your community.

If a business is having financial difficulties, perhaps the local economy is struggling and consumers aren't spending.

In all three situations, the Chamber isn't at fault for the member cancelling their membership. It's not something that the Chamber can control.

It is, however, great information that the Chamber can share with its members. Who better that the Chamber to update its members about the business climate and the trends/strengths/opportunities/weaknesses in the local community?

It is, additionally, great information that the Chamber can use to focus its value proposition and member benefits. Maybe the Chamber needs to rethink its annual food festival because the local economy is shifting away from hospitality and more towards manufacturing? These are the sorts of trends that emerge when a Chamber really digs into its dropped members.

Not so fast you say. 

What if a member drops because they "didn't get anything from their membership." Surely the Chamber must be at fault?

Sure, no value = no renewal. It's as simple as that.

But again, a dropped member can be a great source of information about what benefits they used and/or found valuable. It opens the door to a productive conversation about what their expectations and experiences were of membership (more great information).

Bottom Line

This isn't an attempt to shift responsibility away from Chambers for retaining their members. At the end of the day, the buck stops with the Chamber.

Instead, it's a gentle reminder that the rotating door of membership will always exist. There will always be members that drop their membership.

But if you start looking at dropped members as a source of useful information for a Chamber, you may uncover information that will make the Chamber stronger and more relevant.

Chamber Member Savings/Discount Programs

This post is part of an ongoing series on Chamber of Commerce leadership, organization, and membership. The posts are intended for Chamber staff but anyone who works in a membership organization can apply the concepts.

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Chamber Discount/Savings Programs

What often surprises me is how few real (i.e. valuable) discounts Chambers offer their members. A typical Chamber might have a discount for Office Depot and airport parking, but that's it. Why so few discounts?

Or worse yet, Chambers will offer their members "Hot Deals" or "Member to Member Discounts" that would more aptly be labeled advertising/marketing offers disguised as savings/discounts. 

It's a shame. Especially since Chambers have the benefit of leverage. They can leverage the number of businesses and employees they represent to get discounts and savings on products/services used by their members every day. 

So what gives?

A few reasons.

First, most Chambers don't have the time/resources to individually negotiate deals on behalf of their members. This isn't a good excuse because if Chamber don't have time to create new additional member benefits, what are they spending their time doing?

A second, better excuse is that trying to negotiate deals for one Chamber doesn't create enough leverage to get significant discounts. Vender's need thousands of people using the deals, not hundreds.

A third excuse is that Chambers only want to offer deals to their members that offer a commission back to the Chamber. And since the majority of vendors do not offer a commission, Chambers don't offer their deals.

If you're a Chamber staff member and any of these excuses make you mad or frustrated, they should. Chamber can (and should) do better in this regard. How you ask?

One option is to partner with other Chambers/associations. What if Chambers were to aggregate multiple Chamber's members? Then, there would be enough leverage to negotiate serious deals from national brands.

Enter Cost Cooperative.

Cost Cooperative is our newest partner at the Santa Monica Chamber (where I act as the Membership Director). They are leveraging the buying power of multiple Chambers and associations and their members to get great deals for Chamber members.

Before you ask, no, our Chamber isn't making any money from this partnership. Our goal is to create real benefits for our members that will lead to more businesses wanting to join the Chamber (thus increasing membership sales).

The  more Chambers that get involved, the bigger the negotiating power will be and the greater the benefits/savings participating Chambers can offer their members.

There isn't any good reason Chambers shouldn't join forces and create a real savings/discounts platform that's filled with great offers from recognizable (and trusted) brands. 

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What do you think? Is this something your Chamber would be interested in? Have you seen platforms like this before and if so, what has been your experience with them?

Creating & Evaluating Member Benefits

This post is part of an ongoing series on Chamber of Commerce leadership, organization, and membership. The posts are intended for Chamber staff but anyone who works in a membership organization can apply the concepts.

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Member Benefits

A constant discussion among membership organizations is the right number of member benefits. Are more benefits better? Less benefits? Should weaker benefits be eliminated?

There aren't any easy answers to these important questions. And because each Chamber is different, the number and type of member benefits will vary.

Since there is such a diversity in the type/number of member benefits, Chambers should be more concerned with a process of member benefit creation and evaluation. If there is a solid process, then the appropriate number and type of member benefits will emerge.

Defining a Member Benefit

What is a member benefit?

It's a solution to a member need. For example, members come to the Chamber with the desire to expand their professional network. They want/need to make more professional connections. To satisfy that need, the Chamber organizes networking events.

Member benefits are the lifeblood of Chambers (and other membership organizations). And because they play such an important role, it's critical that Chambers use a process to ensure the quality of those benefits.

Here is a 4 step process to create and evaluate member benefits. 

4 Steps Process to Create & Evaluate Member Benefits

Step 1: Create

The first step is coming up with an idea for a benefit. Maybe it comes from Chamber staff or directly from the members. Maybe you'll be approached by companies with partnership ideas for new member benefits.

But tread carefully, always make sure that the benefit is really a solution to a member need. You'll recognize a need when multiple members start asking for help with a certain aspect of their business or asking if your Chamber sells a certain product/service. 

For example, suppose a number of members asked if they can promote their events on your online events calendar. Since your events calendar is probably just for Chamber events, you might say no. But, you might also realize that if enough members are asking for this, it could indicate a need that the Chamber could solve with a member benefit (i.e. creating a community calendar). Proceed to step 2.

Step 2: Implement

The second step is taking the idea and evaluating/gathering the resources to implement it. This step starts with questions and ends with action. Here are some questions you can ask yourself before implementing the benefit:

• Complexity of implementation?
• Costs associated with implementation? (staff time, money, energy)
• Projected members served?
• Ongoing maintenance (cost, time, energy) of benefit?
• Can the benefit be self-service (i.e. not require staff time/energy once implemented)?
• Can the Chamber provide this benefit better than anyone else in the Community?

Consider these questions a quick cost/benefit analysis for your suggested member benefit. By doing some basic due diligence, you can weed out the losers and focus your attention on the benefits that have real potential.

Building on the community calendar example in Step 1 above, it is probably simple to implement a new community calendar on your website. Ask your web manager to give you a quick estimate on cost. The projected members served could be quite large, since members have their own events all the time. Ongoing maintenance is a tricky one. Many online calendars are not self-service. This means that every time someone wanted to add a new event to the calendar, you would need to manually input the event information. This may raise a red flag. Finally, it's worth a quick web search to research other event calendars for your community. Is this a resource the Chamber can provide that will be better than the other event calendars in your community. Or will it just be buried on your Chamber website? 

These are the sort of questions your staff must evaluate before fully implementing the new benefit. In the final analysis, you'll know whether or not to implement the benefit. 

Step 3: Promote

Three words: communicate, communicate, communicate. No one cares about benefits they don't know about.

The Chamber must communicate two things: (1) the benefit and; (2) how to use it. Do they need to contact a specific staff member? Create an account? Call an account rep?  

Whether you do this through email, direct mail, phone or in person, communicating the benefits available and how to use them will make or break your offering of benefits.

Step 4: Evaluate

Constant evaluation is essential to member benefit relevancy. Still think your members gain tons of value from a "business listing" on your website? Think again.

It's almost sacrosanct to eliminate a benefit and thus, the list of member benefits just keeps growing. But guess what? It's OK to eliminate member benefits. It's better to eliminate weak benefits if it creates more resouces to focus on the stronger ones.

Some questions to consider when evaluating a benefit (similar to the questions you ask before implementing a new member benefit):

• What member need does this benefit serve?
• Approximate number of members served?
• Ongoing costs associated with the benefit? (staff time, money, energy)
• Can the Chamber provide this benefit better than anyone else in the community?
• Approximate value of this benefit to members?
• Would anyone notice if the benefit was eliminated?

For many Chambers, Step 4 should be the first step in the process. There already have a list of members benefits that hasn't been evaluated for months (or even years). Evaluating each benefit one by one will shed light on benefits that need to be enhanced, changed or eliminated.

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Thoughts? Does your Chamber use a process to routinely evaluate member benefits and their relevance?

How many members do you have? (Hint: the answer isn't that important)

This post is part of an ongoing series on Chamber of Commerce leadership, organization, and membership. The posts are intended for Chamber staff but anyone who works in a membership organization can apply the concepts.

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How many members do you have?

After attending the annual WACE Conference (a conference for Chamber Executives), I was reminded of the typical question Chamber Execs routinely ask each other every year to gage their own Chamber's performance. That questions is "how many members to you have?"

The problem with this question is that the answer is relatively unimportant (other than a general barometer of Chamber size). Sure, in a membership organization like a Chamber of Commerce one piece of data is the number of members.  

But does the number of members really give a Chamber a good sense of the strength of its organization? I think not. Wouldn't a Chamber rather have 500 committed members instead of 750 apathetic ones? Without a doubt. 

Instead of focusing on the number of members, Chambers should focus on the value (i.e. quality) of those members. Sure, more is typically better in membership organizations. But quality is much more important than quantity.

So what question(s) should Chambers be asking about the value of their members?

Here are a couple suggestions:

• [Participation] How many members participate in events? Committees? Volunteering?
• [Financial] What is your lowest and highest membership fee? Lifetime value of a member?
• [Promotion/Referrals] How many referrals does your Chamber get from members?
• [Brand Recognition] Do well known and respected businesses join the Chamber?
• [Loyalty] What is your retention rate?
• [Feedback] How many members routinely give you feedback? Suggestions for improvement?
• [Communication] How many members receive, open, and engage with your communications?

These questions are just a starting point for a more meaningful discussion about Chamber membership and the value of members (instead of just the number).

Hopefully next time you run into other Chamber Execs, you'll think twice about how many members they have and instead inquire about the quality of their members.

Thoughts? What questions do you think Chambers should be asking each other to assess the value of their membership?

Non-Dues Revenue is for Non-Chambers

This post is part of an ongoing series on Chamber of Commerce leadership, organization, and membership. The posts are intended for Chamber staff but anyone who works in a membership organization can apply the concepts.

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Non-Dues Revenue

A topic that floats around Chamber of Commerce circles is non-dues revenue. Most Chambers are strapped for cash and the prospect of finding an alternate revenue stream (other than membership dues) is appealing.

Chamber staff members whisper stories about that one Chamber that made $30k from a trip to China in non-dues revenue. And if a Chamber has had success with non-dues revenue sources, more power to them.

But in my experience, these stories are the exception, not the rule. Far more likely is a Chamber uses significant staff time, energy, and resources to implement and promote a program that only yields tens or hundreds of dollars over the course of a year.

Here are a few examples of the most popular non-dues revenue opportunities for Chambers:

• Travel programs (earning a commission on each trip sold) - approximately $200 per trip.
  
• Affinity programs (earning a commission on the sale of Office Depot or other products) - approx. 10% - 35%
  
• Resale programs (earning a commission on the sale of labor law posters) - approx. 10%  - 35%
  

The Issue with Non-Dues Revenue

The problem with pursing non-dues revenue is that it's time/resources/money spent pursuing a non-critical competency of the Chamber. Is a Chamber of Commerce in the business of selling trips? Office products? Labor law posters?

Absolutely Not. A Chamber is in the business of selling memberships (and anything that supports that critcial competency). For most Chambers, membership revenue makes up 60% or more of the total Chamber revenue.   

Lack of focus

A common pitfall I've witnessed in a number of Chambers is a lack of focus. Chambers engage in event planning (networking, etc.), advocacy, educational workshops, marketing, and a number of other activities.

And part of this diversity of activities is the very nature of a Chamber - Chamber's serve their members in numerous different ways. But at what point are Chambers overextending themselves and operating in a segment that's too far away from the true focus (i.e. core competency) of the organization?

Speaking at an investors conference this week, Tim Cook, the current CEO of Apple said the current Apple TV business is a "hobby," but "Apple doesn't do hobbies as a general rule. We believe in focus. And only working on a few things." [Emphasis added]

Taking Tim Cook's advice to heart would do Chamber's well. Chambers need to focus on membership dues first and foremost.

A different approach

Instead of looking for more ways for the Chamber to "make more money" from non-dues revenue, what if Chambers looked for ways to strengthen current member benefits? Or if Chambers added new valuable benefits?

The stronger the membership benefits are, the more likely it is that businesses will join Chamber, refer the Chamber, and support the Chamber financially through it's strongest value proposition (membership dues).

If the Chamber is struggling financially, it isn't time to call in the non-dues generators, it's time to refocus on why dues (i.e. people paying for benefits) aren't covering Chamber expenses.

Bottom line

Non-dues revenue is best left to non-Chambers. Chambers should be focused on dues revenue (by providing valuable member benefits).

NYC Marathon

This past weekend I ran the NYC Marathon. It was my 4th marathon and favorite marathon to date. 

The course

What's great about the course is that it feels like a well planned sightseeing tour. Starting in Staten Island offers the opportunity to take the Staten Island ferry and experience nice views of the Statue of Liberty. Shuttles whisk runners from the dock in Staten Island to the starting line.

Experiencing Staten Island, Brooklyn, Queens, the Bronx, and Manhattan (1st Ave and Central Park) by foot is absolutely ideal. What better way to get to know a city than to run it? 

As far as the elevation goes, the course is mostly flat with the exception of a few inclines over the bridges and at the end in Central Park. The inclines on the bridges are somewhat unnoticeable because most people are focused on the views from the bridge itself (at least I was). But careful not to try and go to fast and waste much needed energy.  

The fans/supporters

Except for the bridges, the course is completely lined with enthusiasic fans/supporters cheering the runners on.

Some of the best signs I saw people carrying:

"Hurry up! It's cold as hell out here."

"Worst parade ever!" 

The organization

The team behind the marathon did an excellent job. Everything from the communications, the expo, transportation, lodging suggestions, and the race itself were coordinated beautifully. 

There was only one part of the marathon experience that needs to be reexamined. The end of the marathon after the finish line was a logistical disaster. At the end of the marathon, all the finishers are pushed into a narrow corral that is lined with the UPS trucks carrying runner gear from the start line. There isn't an opportunity to leave this corral because it's fenced in. Thousands of runners are literally stuck in a corral, standing up, after 26.2 miles of running. Not fun. People were getting sick next to me because we were packed so tightly together with no chance at getting some space.

That being said, it was a small price to pay for the positive aspects of the race itself.

Overall

The NYC Marathon was a fantastic experience. Highly recommended.  

Warren Buffett on Business

Here is a great video of Warren Buffett answering questions from a group of MBA students. He uses Coca-Cola as an example throughout the presentation as a great business with the characteristics he looks for in an investment.

Interestingly, he says that people don't get cola fatigue. Meaning that it is natural to get tired of eating and drinking foods and liquids with the same taste. While people may get tired of drinking root beer or other flavored drinks, they do not with cola. This phenomenon is what enables people to drink five cokes a day and then do the same the next day. I'd be curious to know if that's actually true.

The video is about 128 minutes, but well worth watching in its entirety. Here it is: