How to Run a Successful Chamber of Commerce
Businesses in your community rely on their Chamber of Commerce for many of the benefits that help them excel. These benefits range from soft perks like networking and invitations to enrichment events to hard benefits like health insurance plans and discounts on services.
For those at the helm of their local Chamber, they understand that maintaining and expanding their benefits is the key to their Chamber's success. Business owners want to work with a Chamber that will increase their chances of success and help them reach their goals.
Oftentimes Chamber leaders face two big challenges when trying to guide their organization to sustainable success. First, they struggle to understand what their members want and how they can provide the support necessary to get them there. Second, they struggle to understand effective ways to grow their chamber due to common misconceptions about retention rates and market penetration.
In this post, we will give you some tips for running a successful Chamber of Commerce. We will discuss some benchmarks for Chamber success, then we will go over some misconceptions about market penetration and retention. Keep reading to learn more!
What Makes a Successful Chamber of Commerce?
The success of a Chamber is subjective to the goals of leadership. However, there are a few benchmarks that we can all agree on, that are indicators of success. Things like increased revenue, larger membership bases, and expanded benefits are goals that every Chamber strives for. However, every Chamber should also have unique goals of its own that it must hit to find success.
There are a few misconceptions that stand in the way of Chambers finding sustainable success. The two biggest misconceptions that cause Chambers to tread water are misunderstandings surrounding membership retention and market penetration.
Let's begin by looking at some benchmarks that every chamber should strive for, including the balance between membership dues and non-member dues, key operation and financial metrics, and adjusting staffing methods and salary ranges.
Benchmarks for Running a Successful Chamber of Commerce
Before setting benchmarks, you need to understand the proper balance between membership dues revenue and non-due revenue. The larger your Chamber becomes, the proportion of profit you make from membership dues decreases. That means as Chambers grow, so does the importance of non-due revenue.
The first benchmark you need to set is how your non-due revenue must grow over time as your chamber expands. As we said above, the more members you have, the less those member dues will proportionally cover the cost of operating your Chamber. Non-dues often come from sources like events and other similar initiatives.
Determine how much your member due revenue will cover as your chamber grows. Next, use the difference between that number and your revenue goals to determine how much you will need to make in non-due revenue. Use this number as a benchmark for success and plan your events and sponsorship needs accordingly.
Once you have a grasp on how to balance your member and non-member revenue needs, you can look at salary benchmarks. As your Chamber grows, your leadership demands will grow as well. When this happens, it is important to set new goals and benchmarks for how you will adjust your staff and salary range.
When looking at other benchmarks, the Association of Chamber of Commerce (ACCE) has put together this handy benchmarking platform that every chamber leader should check out.
You can use the link above to compare your Chamber to similarly sized organizations to track key operations and financial metrics. This will help you make sure you are hitting necessary benchmarks and growing.
Next, let's look at some misconceptions about member retention and market penetration that you need to know as your Chamber grows.
Misconceptions About Retention and Market Penetration
As Chambers aim to grow, two big misconceptions hinder their development. The first is a misconception about membership retention rates and what they truly mean, regarding growth. The second is a misconception about market penetration and the reliability of public metrics. SOCA is currently working on a solution for this second misconception that will soon be available to the public.
Let's start with the misconceptions regarding membership retention. Oftentimes, you will hear Chamber leaders enthusiastically discuss membership retention rates in discussions on growth. However, retention rates, even very high ones, do little to help a chamber grow.
Take, for example, a Chamber that has a retention rate of 90%. That means 10% of members leave every year, and as a result, you will need to recruit more new members than 10% of your current member pool to grow your member base. The larger your Chamber becomes, the tougher it becomes to grow without exorbitant recruitment rates.
Chamber leaders too often believe that the key to making a higher revenue and growing rests on recruiting new members, but when they devote their resources to this pursuit, they often tread water and stagnate. The better strategy is to pursue revenue from non-due sources and then invest that money and influence expansion efforts.
Next, Chamber leaders often have misconceptions surrounding market penetration. The misconception is not how to use market penetration, but rather over-reliance on its accuracy. Unfortunately, local market penetration is often very difficult to accurately calculate. There are too many businesses listed in different databases, as a result, it is hard to get an accurate roster of all local businesses.
Because of that, you may be confident that you have an excellent market penetration rate, however, you may be missing many local businesses that have gone unaccounted for, and your real market penetration rate may be much lower than your calculations.
To help combat this, SOCA has put together a complete database of businesses that you can use. This project is currently in the works and will be available soon. Check back for more progress updates.
Running a More Successful Chamber with SOCA
Running a successful Chamber of Commerce can be a challenge. There are many misconceptions floating around about how to expand your Chamber and increase profit, but you can make progress with proven strategies from SOCA.
SOCA offers Chambers many proven benefits that their members need, like health coverage through Anthem, 401k plans, worker's compensation plans, shipping benefits, identity protection, and more. If you are curious about the benefits SOCA can offer your Chamber, click the link below to learn more!
For more tips and information on chamber of commerce benefits, follow SOCA on Facebook, Instagram, and LinkedIn.
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