Biz beat: In switch, business chambers try linking dues to services

A handful of chambers of commerce in Minnesota are hoping to add members and revenue by trying a novel alternative to the traditional method of collecting dues based on the number of company employees.

The chambers are offering their business members the option of choosing and paying for the level of advertising and other chamber services that they need.

Such tiered membership pricing programs are being rolled out this week by the Shakopee Chamber of Commerce, this month by the Dakota County Regional Chamber of Commerce and last month by Hutchinson's chamber.

The Dakota County Regional Chamber spent a year talking to its 500 members and developing its seven service bundle options, costing from $325 to $7,000, President Ruthe Batulis said. Her chamber, like others, has seen membership drop or plateau since the recession hit, she said.

Batulis expects the service options will attract younger business people who are less likely to join groups than their counterparts in the baby boom generation, who tend to be joiners.

Tiered pricing has been used mostly on the East and West Coasts but is moving into the Midwest, said Larry Dowell, president of Dowell Stute and Associates. His St. Paul consulting firm customized the model for the Willmar Lakes Area Chamber of Commerce, which a year ago became the first Minnesota chamber to extensively use the service-fee approach, Dowell said. Dowell is working with six Minnesota chambers, including Brainerd and Winona.

The Willmar chamber spent 18 months surveying and meeting with current, former and prospective members to explain the idea and find out what service packages made sense to them, chamber President Ken Warner said. The chamber settled on seven options for bundled services, he said, ranging from the $300 Believer package to the $5,000 Chairman level. So far the response has been good.

Typical service bundles include seats at chamber banquets, sponsorship of chamber seminars and events or Internet advertising. Because membership bundles include prepayment for event fees, more members participate in events.

During 2011, Willmar's first full year of the program, the chamber saw "a great resurgence of members at our events," Warner said. "One guy told me, 'I paid for it; I figured I might as well go.' "

Warner said he contacted 90 percent of his members and lost only eight businesses while gaining 98 last year, which brought in $28,000 in new chamber revenue -- about 7 percent of the overall budget. Eight more firms have joined in January, and member renewals are rolling in. So far, no business has reduced its service-fee level.

"You can pick the value of membership you want," Warner said. "They really liked having the choice based on what their need was rather than how many employees they have. We were showing them a good return on their investment. They look at our bundle program, write us one check and they are done for the whole year."

Warner said he gleaned the tiered-pricing idea from two nearby chambers in Marshal and Litchfield that have less comprehensive service bundle programs.

"A lot of us will watch to see how it [service bundle fees] goes in the suburban community," Van Helden said.

Shakopee is dropping employee-based dues this year as it offers chamber members five tiers of bundled service options, President Angie Whitcomb said. The bundle packages offer better value because service prices are discounted from what the chamber charges when selling them separately, she said.

"The tiered pricing gives them choice and value," Whitcomb said.