Companies say they are seeing more inquiries as associations seek consulting and look to outsource functions once performed by staff
July 24, 2020
By Walt Williams
Association management companies say they are seeing more inquiries from associations about providing services since the COVID-19 pandemic began, with many groups either seeking expertise in subjects where they lack experience or needing to outsource services previously provided by staff.
The pandemic has taken a toll on the economic models of many associations, and in some cases, they are turning to AMCs to fill in the holes left following layoffs. But AMC representatives say associations shouldn’t view their companies simply as a means to save money. Rather, those groups should take time to pin down what they want out of the partnership and be able to clearly communicate that.
“I would suggest looking for a partner who really understands who they are,” said Jeanne Sheehy, chief marketing officer for Bostrom.
AMCs like Bostrom provide full association management services, running every aspect of an organization. But that model was shifting even before the pandemic. Consulting and individual outsourcing services have grown in recent years and both now account for about half of the company’s revenue, according to Sheehy.
“Traditional full service is great—it is core to our business—but the reason that people come to association management companies is because they need flexibility,” she said. “Times can be high-growth, they can be turbulent, they can be like they are now with the pandemic. That flexibility is key for associations to have, and the way we are structured we can easily expand and contract when we need to.”
As for which AMC services are in demand, Sarah Timm, CEO at Parthenon Management Group, said many clients have approached her business for help with virtual meetings. Her company is also fielding many inquiries on marketing assistance and member services as associations trim staff in those areas.
“I’m seeing more limited-service requests where associations have limited staff, so I’m definitely seeing more requests for individual services,” she said. “I’m also seeing an uptick in requests for full-service association management, where associations have recognized that with a standalone staff, they weren’t as agile or as quick to respond to the pandemic and to shifting to virtual.”
With the meetings industry having taken such a big hit in 2020, many associations are looking beyond events in terms of driving nondues revenue when they approach MCI USA, according to Erin Fuller, the company’s president of association solutions.
“People have dealt with their events reality and now they’re realizing they’ve got to very swiftly drive non-event related revenue to the organization, which is coming from membership and is going to come from non-event product sales,” Fuller said.
Before the pandemic, a lot of the services associations sought from MCI were what Fuller called “operational purchase outliers” like financial or human resources services. Now they are looking for more “programmatic” services like marketing strategy and maximizing technology solutions.
Nonprofit HR has also seen an increase in the number of clients inquiring about outsourcing since the pandemic began, according to Heather de la Riva, managing director of outsourcing. That includes clients who never had an HR function in the past.
“It’s just a very dynamic work environment right now,” she said. “There have been consistent increases in both supplementing HR and also organizations requesting HR for the very first time.”
Associations shouldn’t look to outsourcing simply as a way to cut costs during the pandemic, according to AMC representatives. Sure, associations may realize some cost savings at first, but their ultimate goal should be to enhance the services they offer.
“It is really about relationship and culture,” Sheehy said. “Are the services that we (as an AMC) provide a fit for where their organization is, the challenges they are having and where they want to go?”
Getting assistance from the outside also isn’t something associations should be ashamed of, said Alex DeBarr, CEO of Naylor Association Solutions.
“Associations really have never had more access to more tools than they have right now,” DeBarr said. “Those tools level the playing field. An association that knows what to do and can bring on the help to execute it has a huge advantage because they have a unique relationship with the members and markets that they serve.”
Before approaching an AMC, associations need to make sure they are prepared for entering into talks, he said.
“And by that, I mean their goals need to be clearly identified,” DeBarr said. “What are they trying to accomplish? What is their strategy going forward? What are the most important elements in their strategy for succeeding? When you start to break it down like that, what you should do in-house and what you should outsource becomes a little more clear.”
Prices for AMC services vary depending on the type and level of services needed. Most groups put out a request for proposals during their search. The AMC Institute—the association representing AMCs—provides downloadable request-for-proposal forms on its website at amcinstitute.org/start-an-rfp.
Still, an RFP is only as good as the information contained in it. The more detail about what exactly your organization needs, the better.
“It’s always frustrating when you have very little information because our proposals—and I speak to the whole industry—they are not just-add-water proposals,” Fuller said. “They are very customized to each association.”
“Have us sign an NDA and give us your finances. Give us your projections for 2020,” she added. “A picture of even your 2019 (Form 990) is useless. Really show what you’re projecting for the best-case scenario because maybe the AMC can say, ‘Have you guys thought about this? We think we can increase sales by 10% or reduce your technology expenses.’”
Timm suggests associations with questions reach out to AMCs as they are drafting RFPs. “We’re always willing to talk and help steer people in the right direction. There is plenty of business for all AMCs.”
Timm believes communication is particularly important at this moment when many association employees are worried about their futures. Even before the pandemic, one of the first things she does is talk to association staff to help them understand what role her company will play at the organization.
“People are worried. They’re worried about their jobs, they’re worried about their livelihoods, and it is definitely not our intention to take those away, but we need to find some level playing ground for achieving projects together,” she said.