The Threat of Hypercompetition to Smaller Associations
As the reach of large organisations expands, smaller industry and professional Associations are finding it harder to maintain a competitive advantage even in narrow niches.
There are new and colossal global competitors who have the capacity for fast change and extreme competition. They’re able to offer more value with lower member fees, threatening to price smaller Associations out of the market. So why are many continuing to ignore the danger they present?
Assisted by grants from the Australian government we commenced research in 2011, trying to understand what was happening to Associations and how YOU can take advantage of this situation.
Before beginning, I should highlight the four important concepts that underpinned our research:
1. Real networking actually happens offline – it’s hard to build strong and enduring relationships online.
2. Online relationships are relatively easy to start in large numbers, but their true value to Associations comes from the potential to be converted into offline relationships – membership.
3. When an Association owns an online network with thousands of members, the marketing costs in converting them to fee-paying members is virtually free.
4. The Social Media platform most relevant to Associations is LinkedIn: it’s the business network serving professionals and managers, and continues to grown grow rapidly – with 5 million Australian members.
Over the past few years, the retirement of Baby Boomers and increasing power of Social Media has seen a slow decline in paid membership numbers. These two factors however, well known as they may be, are working far slower than Globalisation, so do not pose as great a threat. I’ll therefore only briefly acknowledge that:
- Baby Boomers are typically the largest group of Association members, and the most active in terms of providing volunteer services. The average impact of their retirement is 1.9% per annum, which is serious, but not as dramatic as the yearly impact of HyperCompetition and Globalisation.
- The growth in Social Media, with its ability to deliver both professional networking and training/education: this is where we focused our research.
Our research therefore aimed to reveal how HyperCompetition can and WILL impact smaller Associations. We intended to expose the biggest threats to Associations in smaller countries (like Australia, let alone the minnows of New Zealand), both online and internationally, and how you can turn them into opportunities.
More in the next post,
Regards, Toby
