by Ralph Penning

Ralph is a former executive trustee of the Independent Business Foundation, Life Member of the Small Enterprise Association of Australia and New Zealand and director of a typical SME.


In a recent dialogue with a colleague, the executive director of an industry organisation about the real value of membership, I drew on my experience in a long career managing trade associations.  My recent reading of The Future of Associations, my prescribed text for anybody serious about their role in the voluntary business sector, makes it very clear that the traditional model no longer serves its purpose.

Self-regulation, advocacy and collective purchasing power are no longer sufficient to build and maintain a viable membership base.  The predominant make-up of small to medium enterprises creates opportunities for business development to give members a greater competitive advantage.

Time and again member surveys identify marketing as the weak link in most SMEs.  This found expression many years ago by Trevor Roberts, a prominent appliance retailer.  He challenged a recruiter from the Chamber of Commerce to convince him in one short sentence how membership would substantially improve the custom of Roberts Electrical.  Therefore the principal role of an association must be the collective promotion of its members as preferred providers of goods and services with the aim to get customers through the door.

Categorising members according to their special skills and preferred areas of application is not sufficiently practised.  For example, I was in search of a building firm that could carry out remedial structural work on a pole house.  As a matter of principle I will not deal with tradies, who are not affiliated to their trade association.  In this case I approached the two relevant industry bodies, who were unable to identify members specialising in this area, but gave me a few names at random.  Neither was qualified to carry out the work.  It was by sheer coincidence that a neighbour knew a builder with the necessary skill sets and membership of one of the two associations representing constructors.

In my own case I belong to two professional associations, both with the ability to segment members according to specialisation and as referral sources to their practising members.  Listing members on the industry website is a prerequisite as a customer information source.  Verifying members’ claims to advanced trade training and master status requires a robust verification process.  The Collision Repairers Association is a good model with its I-Car based accreditation.   Taking the next step, with the introduction of additional requirements, may cause resistance and require some convincing with the possibility of losing a few members on the way.   Industry bodies are accountable to their members’ customers.  They will also be subject to increasing pressure from consumer organisations to underpin their members’ quality performance claims with meaningful action in case of reported shortcomings and defaults.  What it comes down to is that associations have to be more selective in their choice of members.  Several traditional trade associations have already instituted accreditation scheme not unlike those in many professional societies akin to no longer accepting all comers without scrutiny.  

With branding playing an increasing role they are moving closer to a franchise model that requires compliance in a number of operational areas with retraining and systemisation as key elements in the service delivery.  This extends into the visual impression of business premises, staff and vehicles under a common industry brand.  Proof of financial viability, insurance cover and formal trade qualifications also play a role in membership selection.  While these may be regarded as discretionary practices that inhibit membership growth, it can be measured against their effect as means to instil public confidence and to enhance the good standing of the whole industry.