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Association membership — a business dilemma

Why is membership in industry trade associations declining and what can be done about it?

By Al Tuttle, Associate Editor -- Industrial Distribution, 12/1/2002

NEWTON, MASS. — Membership rolls in many manufacturing and distribution associations are declining. Is the fall inevitable and do officials expect a consequential rise in membership when economic conditions improve?

A decline in membership was predictable and inevitable during the economic conditions of the last two years, according to Gary Buffington, executive director of the Industrial Distribution Assn. Prior to that, industry consolidation was widespread, which meant a distributor that purchased others became a member registered under a single name. The result was a steady decline in separate memberships over the last five years, Buffington said.

"In the case of the Industrial Distribution Group, for example, dozens of distributors that were individual members became one distributor – IDG. That is the member's name now, and there are several such groups," Buffington said.

Buffington knows of no industrial association that hasn't suffered a loss of membership in the last five years. I.D.A. is down about 25 percent from its peak. Manufacturers leaving North America is another factor in a company's decision about whether or not to join, he said.

Retaining members and recruiting new ones are not easy propositions, Buffington added.

To tackle that issue, association managers are implementing programs to attract new members and regain those that were lost. I.D.A.'s Member-Get-A-Member program includes a micro Web site for referring names of potential members and sending information packs to prospects. The program began slowly, but picked up five new members in October, a burst that Buffington hopes will continue.

In total, associations must offer a set of programs, including sales and other kinds of training, that overcome the detriments of the economy and other objections to joining, Buffington argues.

Some organizations report that membership rolls are holding steady, however. The Industrial Supply Manufacturers Assn.'s membership ranks remain stable despite the economy and consolidation, due in part to the acceptance of NorthAmerican Industrial Representatives Assn. members as associates, said executive director Chuck Stockinger. About 80 NIRA members have joined ISMA since the membership policy was changed recently, he said.

Multiple memberships — in which a company has individual memberships spread across various businesses and locations – have been declining, however.

ISMA creates programs and educational opportunities to attract, and keep, members. ISMA also sends information packs to prospective members and interviews any member who is leaving the association, Stockinger said.

"We are going to be inviting the various distribution groups to come to our meetings [next] year," he said. "When we share our experience, such as through our e-commerce summit last August, everyone benefits."

Stockinger also noted that young executives hold the key to continued membership for their companies and to recruiting others.

ISMA's dues structure, which ranges from $535 to $1,430 annually, appears to have no bearing on gaining or losing membership.

NIBA – The Belting Assn. is another group feeling the same two-pronged pinch on memberships. NIBA has about 300 members, 180 of which are distributors. Attendance at the national convention in September was encouraging, but was kept down due to economic conditions, said president Ron Roalsen.

However, consolidation erodes distributor and manufacturer bases from which the organization draws members, Roalsen said. He agrees with other association leaders that members are the best recruiting tool they have. Most of the industry consolidation in recent years happened among belting and conveying manufacturers, he said. NIBA's annual dues range from $670 to $920.

At the Power Transmission Distributors Assn., consolidation and the economy hit the member base hard, but another factor has eroded membership roles, too. Distributors specializing in one segment of power transmission chose to remain a member of specialist associations while dropping PTDA, said Mary Sue Lyon, executive vice president. PTDA encompasses a wide-open field of power transmission and motion control products distribution, Lyon said.

"It's a business decision they really have to make," she said.

Last month, PTDA created new criteria to become a member. The requirement to be a PT/MC distributor for at least two years prior to membership was dropped, as was a stock item requirement. Also, PT/MC need no longer be the distributor's primary business; a segment devoted to power transmission will qualify.

Some rules were relaxed for manufacturer membership, as well.

Lyon said that part of the decline is attributable to the advent of European PTDA, which took some members into its fold in 1998. As a result of these and other factors, PTDA membership is down 14 percent since 1997.

PTDA's recruitment committee is very active, however.

"We are really having quite good luck recruiting in the last six months, turning membership numbers around," she said. "The membership committee has reached independent distributors with our message."

Going against the dropping-membership tide, the Specialty Tools and Fasteners Distributors Assn. is steadily growing, says executive director Georgia Foley. STAFDA membership increased from 2,069 six years ago to 2,657 last month. A combination of programs, including a membership category for industrial representatives and the annual convention and trade show, grow membership, Foley said.

Quarterly teleconferences and regional meetings, as well as joint programs with 20 other distributor associations, make STAFDA attractive to potential members. The $350-per-year dues, kept low due to increasing membership, have not increased since STAFDA was founded in 1976, she said.

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