The ROI of Operational Excellence in Associations
Disclaimer: The calculations and examples used in this article are simplified to illustrate the potential impact of small adjustments. While we’ve used simplified math and assumptions, we acknowledge that the actual figures will vary depending on your specific circumstances, association, and industry. These examples are intended as a guide to help you understand the value of operational changes, not as precise predictions or financial advice.
Operational excellence isn’t just a buzzword; it’s a strategic necessity for associations that want to thrive in today’s demanding environment. By optimising your operations, you’re not just improving workflows or cutting costs—you’re making a tangible investment in the long-term success of your organisation. So, what’s the return on investment (ROI) for operational excellence in associations? Let’s dive into the measurable and intangible benefits it delivers
1. Enhanced Member Retention and Engagement
EXAMPLE
The Apple Growers Association starts with 200 members, gains 30 new members per year, and has an average retention rate of 80%, with membership fees at $1,000. Let’s see how the number play out of five years.
Members at Year n = (Members at Year (n-1) × Retention Rate) + New Members
Fees for Year n = Members at Year n × Membership Fee
Here’s how the numbers play out over five years:
Year 1: 200 × 0.8 + 30 = 190 members; 190 × $1,000 = $190,000
Year 2: 190 × 0.8 + 30 = 182 members; 182 × $1,000 = $182,000
Year 3: 182 × 0.8 + 30 = 176 members; 176 × $1,000 = $176,000
Year 4: 176 × 0.8 + 30 = 170 members; 170 × $1,000 = $170,000
Year 5: 170 × 0.8 + 30 = 166 members; 166 × $1,000 = $166,000
Total membership fees over five years = $1,083,000.
Now, let’s imagine improving only the retention rate to 85% while keeping everything else equal. The total membership fees over five years increase to $1,200,000, providing an additional $117,000 or a 10.8% increase.
This doesn’t even account for the residual benefits, such as member referrals and upsells to existing members.
At the heart of every successful association is its members. Operational excellence ensures that your processes and systems are designed to meet and exceed member expectations. When members experience seamless renewals, timely and personalised communications, and efficient event registrations, their satisfaction and loyalty grow naturally.
Leveraging data effectively is another critical component. It allows you to gain a clear understanding of your association's current standing, uncover opportunities for growth, and create proactive strategies to address low engagement at the individual member level. By identifying patterns and acting on insights, you can ensure that every member feels valued and connected.
Associations that prioritise operational excellence consistently report better event attendance, more active participation, and a stronger sense of community. Improved engagement directly translates into higher retention rates, which not only is cheaper than the cost of acquiring new members but also increases lifetime member value.
To boost retention, it’s crucial to implement targeted strategies with clear accountability. Assign a dedicated staff or board member to lead retention efforts, focusing on tracking engagement metrics, identifying at-risk members, and implementing personalised outreach plans. A strong retention strategy should include regular check-ins, understanding evolving member needs, creating new initiatives, and customised value propositions that address the unique needs of your members. Consistent, proactive efforts are key to maintaining strong member relationships and fostering long-term loyalty.
Depending on your association’s size, investing in outsourced expertise for retention management can also be a wise decision. As these efforts require consistency and expertise, a professional partner can help maximise results while freeing up internal resources.
2. Increased Staff Productivity and Satisfaction
EXAMPLE
The Apple Growers Association has a membership support role responsible for handling member enquiries and helping members maximise their benefits. However, they rely on Excel spreadsheets to track members, engagement, and renewals. Over time, multiple inconsistent sheets are created and updated, leading to inaccuracies. The membership support manager spends most of their time sourcing current information (low value) rather than supporting members (high value).
In the last five years, the role, designed for a bubbly, people-oriented personality, has seen three resignations. Frustrated employees have stated, “This is not what I signed up for.” Assuming the role’s salary is $80,000, the cost of replacing an employee can range from 30% to 150% of their annual salary, each resignation has cost the association anywhere from $24,000 to $120,000 in direct and indirect expenses. Consequently, the association has spent $72,000 replacing this role over the last five years.
Additionally, lost productivity during transitions further impacts the association’s operations, creating inefficiencies and affecting overall performance. This cycle not only strains resources but also negatively affects the membership experience and therefore retention.
Operational inefficiencies can be a major source of frustration for staff. Outdated systems, duplicated efforts, unclear workflows, and a lack of professional management or mentorship lead to wasted time and burnout. When staff are left without guidance or oversight, their potential is underutilised, and frustrations compound. Investing in operational excellence streamlines these processes, empowers your team to focus on higher-value tasks that align with your mission, and ensures that they receive the leadership and support they need to succeed.
Happier, more productive staff means lower turnover and reduced recruitment costs. Moreover, an efficient team can better serve members, creating a virtuous cycle of satisfaction and success.
To enhance staff productivity and satisfaction, associations should focus on eliminating inefficiencies, providing adequate mentorship, and fostering a supportive work environment. Key strategies include adopting modern, streamlined systems to reduce time spent on repetitive tasks (more on that below), clarifying and documenting workflows to avoid duplication, and ensuring that roles align with employees' skills and expectations. Assigning a mentor or manager to offer guidance and oversight can prevent frustration and burnout. Additionally, offering professional development opportunities can empower staff to grow within the organisation.
For associations where resources are limited, outsourcing certain tasks may provide a cost-effective way to manage workloads while maintaining productivity. The association could also outsource a fractional operations manager to oversee staff workloads, provide support and mentorship, and ensure systems are consistently refined and updated. This approach not only alleviates the pressure on existing staff but also ensures that operational processes remain consistent, efficient and aligned with the association's goals.
Ultimately, these steps help create a positive work culture where staff feel valued and engaged, leading to greater overall efficiency, satisfaction and retention.
3. Cost Savings Through Efficiency
EXAMPLE
Their membership support person spends the following amount of time on these tasks to process a new member:
Entering a new enquiry into a spreadsheet: 2 minutes
Sending an application form, copying and pasting from another source: 2 minutes
Following up on the membership enquiry : 10 minutes
Opening the spreadsheet each time to make changes: 5 minutes
Sending emails and reports to board members about the enquiry status: 10 minutes
Creating and sending an invoice: 5 minutes
Following up on payment: 10 minutes
Sending a confirmation email: 2 minutes
Putting together a checklist for onboarding: 2 minutes
Total time spent per member: 48 minutes.
Processing 30 new members at 48 minutes per member adds up to 24 hours of work—just for this one task! Imagine how much more time our support manager could save with streamlined processes. At an approximate hourly rate of $40, the cost to process these members comes to $960 per year.
One of the most immediate and measurable benefits of operational excellence is cost savings. By identifying and eliminating redundant processes, automating repetitive tasks, and modernising outdated systems, associations can significantly reduce overheads.
For example, adopting a cloud-based membership management system can cut down on administrative hours while providing better insights into member data.
We love monday.com— an affordable, project management and CRM all in one software. We use this for all our clients, and the transformations have been remarkable! Not only does it provide greater board-to-operational transparency and a single source of truth, but the time saved on administrative tasks is also significant.
In our example provided, Monday.com will eliminate manual admin tasks as follows:
Sync and import data directly from your website or email.
Automatically send application form links to potential members.
Sync application forms with a centralised CRM for seamless data management.
Automate emails to follow up on applications or required paperwork.
Send custom notifications and reports to board members, providing real-time updates on membership enquiries.
Generate invoices automatically from your accounting software.
Send reminders to follow up on payments, reducing manual follow-ups.
Create and assign onboarding checklists with reminders for appropriate board members or staff.
Send personalised welcome and onboarding emails automatically to new members.
Don’t know where to start? We offer a no-obligation, free Monday.com template tailored specifically for associations’ needs. Click here to request yours.
4. Sustainable Growth
EXAMPLE
The Apple Growers Association experienced a surge in new memberships over five years, from 30 new members to 50 new members per year. However, they lacked the infrastructure to manage this growth sustainably. Staff and volunteers lacked resources for proper onboarding. Staff and volunteers lacked resources to maintain and improve the membership experience. Staff and volunteers lacked resources to nurture existing members.
Lets' plug in the numbers that we used from example one but instead change the new member growth rate from 30 to 50 and reduce the retention number to 70%.
Here's the breakdown of years 1 & 5.
Year 1:
- Members retained: 200 x 0.70 = 140
- New members added: 50
- Total members: 140 + 50 = 190
- Revenue: 190 x 1000 = 190,000
Year 5:
- Members retained: 174 x 0.70 = 122 (rounded)
- New members added: 50
- Total members: 122 + 50 = 171
- Revenue: 171 x 1000 = 171,000
Total Revenue:
200,000+190,000+183,000+178,000+174,000+171,000=1,096,000
Membership Numbers Each Year:
Year 0: 200
Year 1: 190
Year 2: 183
Year 3: 178
Year 4: 174
Year 5: 171
Reflecting on the previous example, which focused on a 5% increase in membership retention, the total membership revenue reached $1,200,000. In this case, however, the association has not achieved revenue growth over five years and has, in fact, regressed in membership numbers. This decline would also lead to residual negative effects, including bad word of mouth, diminished motivation to volunteer, and increased workloads to compensate and correct inefficiencies.
Rapid growth can often feel like a victory, but it can also be costly in the long run if not managed carefully. Growth without proper planning can lead to inefficiencies, overwhelmed staff, and a drop in member satisfaction. Associations that grow too quickly often experience long recovery periods as they scramble to realign their resources and systems to match their new scale.
Additionally, it is far easier and more cost-effective to retain an existing member than to replace them. Member retention requires consistent engagement and communication, but the rewards—including loyalty and advocacy—are invaluable.
How to Ensure Sustainable Growth:
Invest in scalable systems, such as automated CRM and project management tools, to streamline processes such as monday.com as mentioned above.
Focus on member retention strategies by offering personalised experiences, timely communication, and engaging content.
Assign resources to manage growth proactively, such as hiring additional staff or outsourcing specific tasks.
Regularly review and refine your operational processes to ensure they align with your current and future needs.
By planning growth strategically and prioritising retention, associations can create a foundation for long-term success.
5. Alignment with Strategic Goals
Example
When the Apple Growers Association failed to follow through on their strategic plan, the consequences were significant. Despite drafting an ambitious five-year plan to grow membership and increase revenue, critical follow-ups and resource allocations were neglected. As a result:
They failed to launch their new membership category, aimed at Apple Pickers which was predicted to bring in $30,000 per year, or $150,000 over five years.
No accountability was provided for budget management and they overspent by $20,000 per year, or $100,000 over five years.
They lost out on a potential $75,000 from industry and government grants to help with their members.
Totalling $325,000 over five years.
This highlights how a lack of follow-through can derail even the best strategic intentions. Ensuring accountability and resource alignment is crucial for sustainable success.
Operational excellence ensures that every process, system, and resource in your association is aligned with your strategic goals. By eliminating distractions and focusing on what truly matters, you can accelerate progress toward your mission.
We love monday.com not only for documenting strategic plans and KPIs but also for ensuring accountability. During board meetings, as part of the agenda for our clients, we bring up a monday.com board—a centralised digital workspace where all KPIs and action items from the strategy or plan are tracked in real time. Each KPI and action item is reviewed to determine if it is on track or off track. If any metric or task is off track, the person accountable provides an explanation and collaborates with the board to implement corrective actions. This fosters a culture of accountability and ensures strategic goals are consistently met.
Accountability and consistency are key to ensuring that strategic goals are more than just aspirations—they become measurable achievements. By leveraging tools like monday.com and fostering a culture of accountability, associations can stay on track, adapt to challenges, and ensure their long-term success.
The Intangible Benefits: Reputation and Culture
While measurable metrics like cost savings and retention rates are critical, the intangible benefits of operational excellence are equally important. A well-run association builds a reputation for reliability and professionalism, which attracts new members, partners, and sponsors.
Additionally, a culture of excellence fosters pride among staff, volunteers, and members. When everyone sees the organisation operating at its best, they’re more likely to stay engaged and invested in its success.
How much did the Apple Growers Loose Dues to Operational Inefficiency
What if the Apple Growers Association implemented the following changes, based on the examples and numbers above:
Increased their retention rate by just 5%
Reduced staff turnover
Saved time by automating repetitive and manual tasks
Focused on sustainable, steady growth rather than rapid expansion
Developed a systematic strategic plan with accountability and consistency
Over five years, these changes could have improved their bottom line by $514,960. And that’s just based on the examples provided! There are countless other ways that streamlined and efficient operational systems can deliver tangible results for your association.
Calculating Your ROI: Where to Start
To calculate the ROI of operational excellence, you need a clear understanding of your association’s baseline metrics. Begin by assessing the following key areas:
Growth Rate
Use these formulas to calculate growth and membership revenue for each year:
Members at Year 𝑛 = (Members at Year (𝑛 − 1) × Retention Rate ) + New Members
Fees for Year 𝑛 = Members at Year 𝑛 × Membership Fee
Administration Costs
Administration Cost = Time Taken to Complete a Task × Staff Hourly Rate
Employee Turnover Costs
Replacement Cost = Annual Salary × 0.30 (Conservative Estimate)
Progress Toward Strategic Goals
Strategic ROI = Strategic Benefit × Completion or Success Rate
By tracking and measuring improvements in these areas, you can quantify the tangible value that operational excellence brings to your association. These metrics provide a foundation for identifying inefficiencies, setting goals, and evaluating the impact of streamlined systems.
Ready to Elevate Your Association?
Operational excellence isn’t a one-time project; it’s an ongoing commitment to improvement. By focusing on optimising your processes and aligning your operations with your mission, you can unlock both measurable returns and intangible benefits that propel your association forward.
At AME, we specialise in helping associations achieve operational excellence. Our tailored solutions are designed to streamline operations, engage members, and deliver growth-driven results. Get in touch today to learn how we can help your association thrive!