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A chamber without members

Ben Goldstein on Wednesday, May 10, 2017 at 11:37:00 am

Since the very beginning, the chamber of commerce business model has revolved around membership. At the Lancaster Chamber of Commerce & Industry, that conventional wisdom is now being turned on its head.

Earlier this Spring, the Lancaster Chamber became the first in the nation to abandon the traditional membership dues structure—a bold move that upends more than a century of chamber orthodoxy.

The chamber hopes that by getting rid of dues, it will reduce barriers that prevent smaller or growing businesses from joining.

“Our mission is to have Lancaster County recognized as a model for prosperity,” said CEO Tom Baldrige, adding: “if we really mean it, we need to make sure that we’re offering our services to all businesses in a way that is welcoming and non-restrictive.”

Historically, the chamber has had about 2,200 members at any given time. There are more than 13,000 businesses in the chamber’s home county of Lancaster, though like other chambers, members come from other geographic areas.

“The fact that we were only dealing with those that joined and were ignoring opportunities with 11,000 other businesses led us to conclude that the traditional model was stressed,” recounted Baldrige. “We wanted to create a structure that was engaging of all businesses in the county.”

But what about the revenue? To support itself financially, the chamber devised a dual business structure consisting of two components: a “business success hub” that offers customized services on a fee-for-service basis, and a “community prosperity hub,” which seeks investments from businesses to finance the chamber’s agenda to enhance the community as a better place to live, work and do business.

“We call them investors, because they’re investing in the agenda and priorities,” said Cheryl Irwin-Bass, vice president and COO at the chamber. “It’s about being at the table and part of the discussions that influence the future of Lancaster County.”

The investors are sorted into ten different levels, consisting of three tiers with three levels each and a Chairman’s Circle tier for the largest investors. “Other chambers often ask why we didn’t just go to a tiered dues system,” shared Irwin-Bass. “This is very different, because it’s not about bundling things—it’s about unbundling. There’s not a lot of extras that come along with it.”

The chamber pitches the new model to members as they approach renewal time. “Before, if they dropped membership, it was a mark in the loss column,” recalled Irwin-Bass. “Now, we can tell them about the programs and services they may still be interested in, and steer their dollars into another business unit,” she added.

At the chamber’s annual dinner last year, acclaimed author Malcolm Gladwell used a sports analogy to describe the changes underway in the chamber profession. Gladwell compared soccer to basketball, noting that the key to improving  a soccer team is to build up the worst players, whereas the key to improving a basketball team is to make the best players even better, so they can dominate the court.

“In decades past, we were playing basketball,” said Irwin-Bass. “It was all about the biggest businesses, and we made our decisions around what was good for those companies.”

“Now, we’re playing soccer,” she continued. “The only way we can realize our mission is if every business and individual can reach their full potential. The better the individual does, the better the community will do, and that’s what we’re ultimately trying to achieve.”

The Lancaster Chamber will participate in a panel on the topic at ACCE’s annual convention, hosted this Summer in Nashville.

 

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