A Radical Change to ITE Membership/Dues

I’m a big fan of the Pareto Principle.  Richard Koch and Perry Marshall have illuminated the power law behind this seemingly natural principle in their understandable business books.

This is a magical principle Vilfredo Pareto discovered about a hundred years ago and it seems to be everywhere.  In our industry, about 80% of vehicle miles traveled are carried by 20% of our roads and about 80% of the crashes happen at 20% of the intersections on our list.  In my businesses, 80% of my revenues come from 20% of my customers.  Look at most economic situations and you’ll find 80% of the money concentrated in 20% of the transactions.  Of course the world doesn’t follow the 80/20 split precisely.  Some situations are closer to 70/30, while some are as concentrated as 90/10.

Perry Marshall has guided me how to use the power law in business.  I suggest you read 80/20 Sales & Marketing if you have any interest in the topic.

The power law says the Chicago Bears will sell a spread from $40 nose bleed seats to $300 seats on the fifty yard line.  They’re all seeing the same game, but they are buying different experiences.  BUT (this is the mind bending point) they will sell million dollar packages for luxury suites and access to the players to several companies/business owners.  The vast majority of the Bears profits are dependent on selling these high end packages and the nose bleed seats are irrelevant in their profitability.  The key in a 21^st century business model is catering to your customers by having multiple offerings at multiple price points.

We all have customers who would give us more money if we provide great value for that extra money.  To effectively apply this principle you need to provide a lot of value at each price point and you need to realize some of your existing customers would be happy to give you more money as long as you provide sufficient value for it.  You also need to accept that certain customers would like to buy less elaborate products from you at a cheaper price point.

How is this related to ITE?

Here is a price structure that would provide great value for the dues amount and would allow the members multiple price points:

Junior Membership

• $20/year
• Member of local chapter, section, district, and national
• Get the ITE Journal (important to increase readership to keep selling advertisements)

Silver Membership

• $200/year
• Member of local chapter, section, district, and national
• Get the ITE Journal
• Access to ITE Community with sub-membership to one group
• 25% Discount on Publications/Webinars

Gold Membership

• $450/year
• Member of local chapter, section, district, and national
• Get the ITE Journal
• Access to ITE Community with sub-membership to all groups
• 2 Free Publications and Webinars a year, 50% Discount on Publications/Webinars after the freebies
• Free access to Trip Generation and Parking Generation cloud based system

Platinum Membership

• $1,200/year
• Member of local chapter, section, district, and national
• Get the ITE Journal
• Access to ITE Community with sub-membership to all groups
• Free access on all Publications/Webinars
• Free access to Trip Generation and Parking Generation cloud based system
• Free registration to the ITE Annual meeting (this has a nice benefit of pumping up the registration numbers, whether or not these members actually show up or not – important stats for selling vendor booths).

Onyx Membership (Limited to15 Members)

• $20,000/year
• Member of local chapter, section, district, and national
• Get the ITE Journal
• Access to ITE Community with sub-membership to all groups
• Free access on Publications/Webinars
• Free access to Trip Generation and Parking Generation cloud based system
• Free registration to the ITE Annual meeting
• Free vendor booth at ITE Annual meeting with registration for two additional people to work the booth.
• Three roundtable meeting per year at ITE Headquarters with elected politicians, agency leaders, and other professional group leaders.  This is the insider’s circle for CEO’s/Presidents/Executive VP’s to network amongst themselves and with the big wheels in the industry.

Here’s my guess on how existing members would shift within the categories:

• 10% Junior
• 50% Silver
• 35% Gold
• 5% Platinum
• 15 Members Onyx if ITE really does deliver the access they purportedly have.  Moderating this group is an important task for the Executive Director because this entrenches us with the movers and shakers in the industry.

A couple of key assumptions to the above, 21^st century business model:

1. Digitize all of the publications (I’d follow the 80/20 rule and start by digitizing the top ten best sellers), turn all of the webinars into recordings that can be watched or listened to on demand, and buy or replicate OTISS so we have a Trip Generation/Parking Generation  software service.
2. Become a credit card based online business. This would allow ITE to operate a spread of membership levels without having much associated cost with the increased membership levels.  It would implement the above membership rules and would provide instant access to the members.  It would be best to have a recurring monthly charge into perpetuity until the member actively cancels.  I’d add on an upcharge for those wanting to pay by check annually because it hurts cash flow and takes staff time to deal with annual checks.

I know ITE accepts credit cards and dues can be paid monthly.  Many publications are available electronically, including the revamped ITE Journal.  ITE has increased the number of webinars they offer and I believe staff is working towards making all webinars available on demand.  ITE has been making significant changes in their operations over the last three years, so implementing the 21^st century business model wouldn’t be a big leap.

An important part of the marketing system is to realize you are giving away the Junior Membership to keep those people in your database and to interact with them.  You’re gaining their permission to send them emails.  The intention is to move them up the chain of membership when the time is right for their careers/agencies/firms.    ITE should also work to move silver members up the chain.

I believe this membership structure would provide more benefit to its members, increase membership at least 35% and increase revenues at least 25% – all without adding more staff (maybe even trim staff).  Maybe ITE is considering a new structure like this, but I haven’t heard about it.

Let’s continue pushing the evolution!