Industry associations and trading portals

We do a lot of work with industry associations. Associations are potentially a gateway to many potential customers so like many companies we spend a bit of time working with them.

A lot of the innovation in social media is directly relevant to industry associations which could become a venue for member conversation and connections.

We are hearing that many associations are having issues with falling revenues and membership, possible due the recession and also those industry networking conversations are happening elsewhere – like FaceBook. I haven’t seen too many examples yet of associations picking up that opportunity.

Googling around industry associations, most have a member directory and a bunch of industry partners as sponsors. I suspect that as there is often not a lot of action happening around the industry association websites the benefits to partners is likely underwhelming, leading again to decreasing revenue for the association.

Since the early 2000’s I’ve also followed closely what’s happening in trading portals. As cloud applications develop, industry associations are becoming a natural hub for industry type applications which have the opportunity for possible data interchange and benchmarking. This then leads to a strategic decision that leaders of industry associations need to make. To what extent do they seek to encourage, participate in or become an industry trading portal.

As I was looking for examples I found a great paper that looks at this strategic issue and captured most of the thoughts I’d been having. It is does include the trading portal perspective so may appear a bit threatening – nevertheless the points are important.Could Profit Motivated Trading Portals Displace Associations?

So many good quotes …

If I’m an association (and not also a quasi-regulatory body or performing some other legally required function) in an industry which is not resistant by its nature to industry trading portals, this would scare the hell out of me. It should.

… the smart industry trading portal looking for a competitive edge will gravitate toward owning or building an industry association. Preferably THE industry association.

If your association isn’t at least striking up relationships with the folks running trading portals in your industry, I’d start.

A lot of small businesses think Wal-Mart is unfair. That may be true, but it still put them out of business.

As a Top 5 list, associations need to:

1. Realize that you’re in a fight for your organization’s life here. For perhaps the first time, it’s worthwhile for other organizations to take a profit motivated run at you (or key pieces of what you do) with the aim of displacing you. Worse, by the time the signs of that are obvious to everyone, you’re dead. You don’t have the size and leverage to afford many mistakes.

“The smart industry trading portal looking for a competitive edge will gravitate toward owning or building an industry association.”

The question is whether your association will strike up these kinds of alliances while that option is still on the table. The clock is ticking….

I think many people within associations can see how fast social media and cloud computing is changing the landscape. Hopefully raising this for discussion can serve as a conversation starter and lead to a number of exciting new initiatives.

One Comment

January 27, 2010 at 9:54 am

What? No blog posts for a week? Must be a big announcement coming up?

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