Chamber Executive Article Archive

TRCs: The Good, The Bad, The Lucrative

By Katherine House

Winter 2014

TRCs can fetch impressive revenues year after year,
but for some chambers there are too many downsides.

CRAZY. That’s what some people call Karen Humphrey when they learn she’s managed total resource campaigns for 19 years. In fact, Humphrey, director of resource campaign and affinity programs at the Tulsa Regional Chamber, has overseen the Oklahoma organization’s TRC every year of its existence. While peers may view her unrelenting efforts to plan reward trips and oversee hundreds of volunteers as over the top, there’s a more apt description of her work: insanely successful.

In its first year, Tulsa’s TRC brought in $100,000. In 2011, 2012 and 2013, the campaign has exceeded the $3 million mark. Today, it’s one of the largest TRCs in the country, contributing more than 25 percent of the chamber’s total budget. The 10-week campaign recruits about 160 volunteers annually, who are rewarded with cash incentives, and, for the top producers, a nice vacation.

TRCs, sometimes called total resource development campaigns, were developed in the 1980s at the Atlanta chamber. On the surface, the premise behind them is simple: recruit an army of volunteers to leverage their connections to sell memberships, sponsorships and other products during a finite period of time. TRCs can be complicated, involving everything from the development of a campaign theme and recruitment of campaign leaders and sponsors, to the training of volunteers and, ultimately, fulfillment.

When it comes to TRCs, most chamber leaders seem to fall into one of two camps: those who believe in them and those who are quick to note downsides such as the staff time required and the uncertainty of relying on volunteers to target the best prospects. Others may resist TRCs because their tiered dues structure contains multiple sponsorships, although it’s certainly possible for TRCs and tiered dues structures to co-exist.

Why Run a Campaign?

  • Tweak the reward trip. The Raleigh Chamber tries to wait five to six years before repeating a destination.
  • Don’t rule out a TRC based on the size of your chamber. TRCs are not only for big chambers.
  • Don’t adopt a cookie cutter approach, thinking you can replicate a campaign done in another community. Instead, leverage what’s special about your chamber and make it your own.
  • Respect the model. The incentives for volunteers are the cost of sales, which is far more cost-effective than paying full-time staff.
  • Plan and articulate your vision. Be prepared to tell volunteers and investors what you will do with the added resources a campaign can bring in.
  • Compare notes with other chamber leaders to find out what’s working and what’s not.
  • Give credit to campaign leaders and all your volunteers. If you treat them right, they’ll tell your story. People want to feel like they are doing something important. Let volunteers know they are an integral part of the mission.
  • Consultants should tailor their services to your needs, not the other way around. You might be surprised at how willing they are to negotiate fees and services. Doing so may make it possible to afford an outside firm.
  • Accept in-kind donations only if they will benefit your bottom line. What good is the waiver of $5,000 in event space if you must spend $10,000 to put on an event that you weren’t planning to do in the first place? Try to keep in-kind contributions to five percent or less of the campaign total.
  • If your chamber runs a resource campaign and an investment campaign, plan carefully to make sure the timing/message of one will
    not adversely affect the other.
  • Interact with top producers throughout the year. In Tulsa, Karen Humphrey stays in touch with members of the Top Cash Producer club at least once a month. Before July 4 she may give them a package of fireworks, or provide chocolate for Valentine’s Day.
  • Understand that the reward trip is more than just a trip. It’s also an opportunity for volunteers to build relationships with other successful, like-minded members of community
  • Give volunteers a say in reward trip planning. This gives volunteers an extra incentive to perform well and takes the pressure off staff.

Bob Morgan, CCE, president of the Charlotte Chamber of Commerce, sees many advantages to TRCs. This year, the North Carolina chamber’s campaign brought in a record $5.1 million, “very little” of which consisted of in-kind donations, he says. The revenue constitutes 60 percent of the chamber’s annual budget, says Lori Lewis, the chamber’s chief revenue officer. Only about 20 percent of dollars generated come from membership renewals, with a much smaller amount from new member sales. (Of total renewals, about one-third come through the campaign.) The overwhelming majority of TRC dollars are derived from sponsorships, she says.

“Many of the volunteers can sell the chamber better than I can with their testimonials,” says Morgan. Not only that, but he likes the affordable cost structure of a campaign. “The cost of goods sold through a professional sales team is extremely high,” he says. By contrast, it cost less than $500,000 (not including staff time) to run this year’s campaign, he says. Without the resource campaign, the chamber would be smaller, with less money to fund its core mission.

TRCs can do much more for a chamber than generate revenue. “If you can get the ball rolling, you really do wind up with a group of dedicated volunteers who buy into what you are doing, who help shape and fashion what you are doing, and, in many instances, wind up being key members of your organization’s leadership,” says Harvey Schmitt, president and CEO of the Greater Raleigh Chamber of Commerce in North Carolina.

“I really see TRCs turn chambers around—not just financially, but in energy, enthusiasm and awareness,” says Joyce Powell-Johnson. She owns YGM LLC, a Lenexa, Kan., consulting firm that helps organizations plan and carry out TRCs.

Volunteers and Clients

TRCs also provide an opportunity for volunteers to gain recognition within their companies. “I can’t stress this enough,” says Morgan. A young, upcoming professional at a company could get “face time with an executive that might influence” his/her career through their work on a campaign together.

Additionally, by using a large pool of volunteers, chambers “cast a much wider net” than staff members could, says Humphrey. Volunteers “have very unique relationships that we don’t have,” says Matt Pivarnik, CCE, IOM, executive vice president and COO of the Tulsa Regional Chamber.

Tristan Johnson, vice president of the Greater Cheyenne Chamber of Commerce in Wyoming, concurs. The chamber no longer turns to “the same handful of businesses over and over again” seeking sponsorships. Thanks to the TRC, “We are getting businesses [as sponsors] that we never thought would be interested.” Morgan says volunteers leverage their contacts outside Charlotte to make investments in the organization, which he describes as “a beautiful thing.”

“A TRC is not about getting more from the big guys [major investors],” explains Powell-Johnson. “It’s about getting a lot more clients.” Advocates of TRCs also like the fact that most of a chamber’s sales efforts can be consolidated into a short timeframe. This “one-stop shopping” benefits staff and would-be investors alike.

Before the Cheyenne chamber began its TRC, “every month, it seemed like we were down to the wire to get sponsors for that month,” says Johnson. “I think it has taken a lot of the stress off events because we are getting sponsors in advance.” As a result, the chamber can now “focus more on the bigger picture.” The TRC has allowed the chamber to hire a consultant in Washington, D.C., who keeps the chamber apprised on issues important to the local community, Johnson says. TRC volunteers also can cement relationships with existing members by clearing up misconceptions about the chamber, she adds.

On the other hand …

For many years, starting in 1999, the Charleston Metro Chamber of Commerce in South Carolina ran a total resource campaign. In 2010 and 2011, revenue from the TRC accounted for about 40 percent of chamber’s budget. But there was a price to pay for this success. “TRC took up an inordinate amount of staff, leadership, volunteer and board meeting time,” says Bryan Derreberry, president and CEO. “It took our top volunteer and professional staff members away from the valued work they should be doing on behalf of the membership.”

In 2012, the chamber discontinued its TRC. The time investment wasn’t the only factor behind the decision. The chamber was undertaking a $5 million investment campaign, Accelerate Greater Charleston, and leaders “did not feel that our membership could handle both this ask and an almost $2 million ask from the TRC,” says Derreberry.

Instead, the chamber initiated Annual Partnership Meetings with its top 110 members. During these visits, chamber executives discover top business priorities and needs, ask for an evaluation of the business environment, and seek recommendations for top chamber priorities. The meetings, which involve two staff members, typically last 75 to 90 minutes. During the calls, the chamber team also offers suggestions about which chamber programs the members might consider investing in. Then, within five to seven days of the calls, the chamber e-mails a custom “electronic partnership package,” explains Derreberry.

The program has been well received. The chamber’s overall budget, including Accelerate Greater Charleston commitments, is up 25 percent, he says. “Annual Partnership calls allow for a sound delivery and review of membership dues, AGC annual commitments and sponsorship engagement,” says Derreberry. The calls also counteract another issue. “I consistently heard from our larger members that the only time they ever heard from the chamber was when a volunteer or staff member had their hand out for TRC,” he says.

Paul Miloni, vice president of membership development for the Charleston chamber, has first-hand experience with TRCs from his previous tenure at the Lincoln, Neb., chamber. It discontinued TRCs several years ago, and even now Miloni has no desire to undertake another campaign. Although TRCs can do “a great job” of helping the events side of the chamber ledger, he believes they do a disservice to the membership department. A campaign “doesn’t allow a chamber to message what its core value is to a new member,” he says.

TRCs have the potential to create membership churn after a few years, says Miloni. Members may join primarily to help out friends, but fail to renew, leading to a low retention rate. There is also potential for volunteers to help subsidize a membership if doing so will make them eligible for the rewards trip, he says. It also can be challenging for chambers to bring on a large number of new members in a two- or three-month period, he says. “If you have a huge influx, can you really get them on board, engaged and educated about what you offer?” he asks.

TRC proponents say campaigns generate more community awareness about the chamber. Miloni sees a potential downside to that, however. “[It] gives the impression that the chamber has deep pockets for sending volunteers on trips,” he says. “It does not give the right message.” The Charleston chamber faced similar concerns. “Many of our larger members frowned on the expensive trips to celebration destinations and others were prohibited from taking part in the trips,” says Derreberry.

Keys to Success

What does it take to run a successful TRC? Commitment, say the veterans. “Until you get board buy-in, you are not as successful as you can be,” says the Tulsa chamber’s Humphrey.

“The most important decision after you decide to do a campaign is who you get to chair it the first year,” says Powell-Johnson. “It must be a key strong business leader to get some credibility and get other business leaders behind it.”

Executive and staff commitment is equally important, says Schmitt of the Greater Raleigh Chamber. If a campaign is driven by the board or staff but lacks the support of the chamber CEO, it will not last more than a year, he says. And, “you have to have your own staff team committed to making the process go well.” The staff must “view the campaign as an integral part of the culture of the organization and treat it with respect.”

For campaigns to work well, “You need a sense of community and a perception that the chamber makes things happen,” says Powell-Johnson, “That’s harder to accomplish in some areas than others.”

Commitment from local businesses is also critical, says Lewis of the Charlotte chamber. Companies must commit employees to be leaders of the campaign, and volunteers must be committed to introducing you “to people you may not have access to,” she says.

“To run a good total resource campaign, you have to have a bunch of volunteers,” says Marc Jordan, CCE, IOM, president/CEO of the North Myrtle Beach Chamber of Commerce Convention and Visitors Bureau. “We do not have a lot of volunteers here.” That’s because many of his members are sole proprietorships. For the most part, owners are simply too busy in the summer months to help out, and many of them take time off in the off-season.

Jordan says it’s easier to run resource campaigns where there are concentrations of banks, hospitals and utilities—businesses that are generally willing to supply teams needed to run a campaign.

Morgan agrees. In Charlotte, large corporations, including two banks and Duke Energy, have bought into the campaign concept. He says “super-competitive” corporate leaders have been instrumental in setting the pace. “That friendly competition was absolutely essential to our early success,” he says. It helps, too, that the Charlotte area is growing.

Morgan believes the chamber’s significant role in economic development and public policy initiatives has been a contributing factor to the campaign’s success. “We deliver on the ROI that companies sell,” he says.

What’s the key to success year in and year out? “One reason we are still so successful is that we do have several long-term volunteers,” says Humphrey. Once a volunteer sells to a company as part of the campaign, that volunteer is given the opportunity to sell to the same company the following year, she explains. In Oklahoma City, a volunteer this year won the top producer award after working with the same company all 20 years on the campaign and reaching the milestone of raising more than $1 million for the chamber.

Sustaining Success

In Texas, the Longview Chamber of Commerce ran its third resource campaign in 2013. Kelly Hall, CCE, IOM, president, wishes she had started the campaign 10 years ago because it has brought in added revenue. An enthusiastic believer in the system, she is also aware of the challenges of TRCs. In talking to her peers, she learned that the third year had the potential to be “a bubble year.” Why? In part because of volunteer turnover. “The lifespan of a volunteer in an association is historically two to three years,” she says. That statistic is reflected in her experience: this year about half of her campaign volunteers are new to the TRC.

Hall also knew that retention of new members brought in through a campaign could be lower than the rate of those brought in by staff. Again her research proved accurate. To counteract this, she spent a lot of time emphasizing to volunteers this year that the campaign is not about simply selling a membership, but selling a membership to the chamber’s ideal candidate. For this reason, she emphasized “the sweet spot,” or profile, of that type of business.

She benefited from other sage advice. She asked peers what they wished they had done differently in the first three to five years. Some of them said they wished they always brought back a consultant to help train volunteers. “They’re professionals and perceived as professionals,” she says. “The volunteers respond to that.” Hall says chambers may not need the services of a consultant “every year for everything,” but they are invaluable for volunteer training.

For chamber staff, the work is far from over when a campaign ends. It’s critical that the staff have adequate internal systems for tracking all commitments, she says. There are thank-you letters to send out, and you may need additional staff. Hall added a part-timer to help with fulfillment. “When you bring in additional revenue, you are also increasing your workload,” she says.

In recent years, some chambers have run across corporations whose ethics policies prohibit employees from receiving cash prizes or going on rewards trip, thus eliminating some key incentives driving resource campaigns. Schmitt says the Raleigh chamber has found ways to work within these limitations. For example, an employee may be allowed to participate if he or she gives winnings to a charity, foundation or even the chamber. In other cases, employees may be permitted to receive cash prizes but are prohibited from going on the rewards trip.

The Tulsa chamber still gives cash prizes, but knows of some chambers that now use gift cards instead. Several years ago, the Charlotte chamber stopped paying cash incentives. In the post-Enron world, these commissions came under greater scrutiny, says Morgan. But eliminating the cash incentives did not lead to a decline in participation. “Our volunteers are remarkably committed to the mission of the chamber,” he says. And, the trip is “still highly motivating.” Plus, some corporations provide their own incentives to volunteers, whether in the form of recognition or something more tangible, such as tickets to a sporting event.

After multiple campaigns, it may be tempting to take a lot in trade to meet goals, says Roy Williams, CCE, IOM, president and CEO of the Greater Oklahoma City Chamber of Commerce. This strategy can backfire. Rooms in a typical suburban hotel will not be useful if the chamber needs rooms in a five-star downtown hotel, he says. Likewise, an airline’s offer of $50,000 in credit towards flights is not as good as it sounds since it will charge a premium price when you might have been able to get the tickets cheaper elsewhere. For these reasons, the Oklahoma City chamber only accepts in-kind TV airtime from a cable company. Ordinarily, it buys that advertising, so a trade saves the chamber cash on something it planned to spend anyway, says Williams.

In Cheyenne, chamber staff members continue to appreciate the TRC model. Every day, it seems, someone says, “We wouldn’t be able to do this without TRC,” says Johnson.
Katherine House is a business writer based in Iowa City, Iowa.

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