May 21, 2007

Direct Marketing Association, Dues, And ROI

An open-ended question for you.

During my time at Nordstrom, I paid the Direct Marketing Association more than $200,000 in annual membership dues from my operating budget. That's money that I could have spent doing things that benefited Nordstrom, or more importantly, benefited my staff. Think about this ... we had to generate between $600,000 and $1,200,000 in sales to cover the profit lost by paying these dues. We had to sell an additional 6,000 to 12,000 pairs of shoes to cover the profit lost by this expense!

If you belong to an association, what do you believe is a valid return on investment for your annual dues? Whether you belong to a stamp club that charges $10 annual dues, or you are an $8 billion dollar business paying a huge organization $200,000+ over five years, what is an acceptable ROI? How would you measure ROI?

2 comments:

  1. Great question, and one that deserves an answer. The ROI needs to come from what the organization provides, which in the DMA's case would be education and networking. Neither are easy to trace back to sales or professional performance (leading to sale), but there may be a way to place an artificial value on them and trace their change over time. Sadly for organizations of all stripes, the ROI for one is probably on the steep decline. I'm talking about networking.

    One of the books I plan to finally get around to reading this summer is "Bowling Alone," which talks about the deterioration of every type of fraternal or civic organization as our society becomes increasingly harried and physically isolated. My professional curiosity hinges around whether social forces are behind falling enrollments in professional associations such as the DMA, and the presumed migration to online networking sites (extremely presumed -- the jury is still out on this to be sure!). I'll let you know what I learn!

    ReplyDelete
  2. During my time at Nordstrom, I wrote the DMA, asking them to demonstrate to me what the ROI was for the $47,000 I was spending, annually, to be a member.

    I did not receive a reply.

    ReplyDelete