News + Insights

ICF Next and HFMA: Modernizing a 200-year-old business model

May 18, 2020
40 MIN. READ
Transforming your organization sometimes means looking beyond your industry.

What if I told you that you could raise your prices by 30%, cut half of your products—and still have excited customers and a growing business? The challenge, however, is that you have to transform your business model, re-arrange several internal departments, and invest in technology to create personalized experiences.  

For the Healthcare Financial Management Association (HFMA), its need to transform was not just about maintaining and growing membership. It was about understanding how to deliver real value to its members in the right way. That meant looking at essentially a 200-year-old business model and deciding to do better.  By evaluating outside industries, HFMA identified a new set of experiences it could adopt and expand to create something new, but familiar to its membership.  

In this podcast we talk to Garth Jordan, chief strategy officer & senior vice president of HFMA about this multi-year journey of transformation. Moderated by Fred Faulkner, partner at ICF Next, the conversation focuses on: 

  • How HFMA went through the process to identify the need for not just a change, but a transformation.
  • How HFMA used design thinking to discover a new business model that would provide greater value to its membership and community at-large.
  • The challenges of implementing such a dynamic change to its organization.
  • How any organization can apply the methodologies and lessons learned to its own business context. 

Full transcript below:

Ben Burrows:  Good afternoon.  Hi everybody. My name is Ben Burrows and I’m a Partner at ICF Next.  And I will be your moderator for today for your virtual roundtable.  I’ve had the pleasure of working along both of today’s panelists and I’m really excited to introduce you to them shortly. 

Today we get to have a conversation about a truly incredible transformation story.  Over the past several years our client, the Healthcare Financial Management Association, have taken the 200 year old association business model and they’ve injected it with the types of modern, engaging experiences that today’s members demand.

Really appreciated if you build out the survey at the end to let us know how we did today. All right, let's begin. First a little bit of background on ICF next. We are a consulting agency that believes that participation is greater than experience. So, what do we mean by that?

Well in a world where everyone expects great experiences. And when the experiences are increasingly optimized to drive transactional outcomes, We work with brands and businesses and organizations to help them create deeper more meaningful. Their customers, colleagues, members, or citizens. We believe that by creating these participatory relationships.  They're not only able to drive transactions but. Higher order and ultimately higher value outcomes like loyalty advocacy and identity. Now participation is something that's earned. It's reciprocal. It's shared and it's relevant. And when it's done right, it drives, meaningful business outcomes and increases in enterprise value.

We combine the creativity of an agency with the depth and expertise of a consultancy. Our global team of 1,700 change makers are a mix of mission-driven, strategists marketers, technologists and data scientists, honestly insights creativity and technology that motivates people.

All right, now let's get under what everybody's here for, our discussion. So I'd like to introduce you to Garth Jordan and Fred Faulkner who'll be leading our discussion today?

Fred, take it away.

Fred Faulkner: Thanks Ben. As you mentioned, I'm a partner at ICF Next.  But prior to my time here at ICF Next I spent over a decade at associations either helping create departments and strategies or consulting with them on their digital marketing strategies, marketing, technology implementations and digital engagement.

So really, today's story holds a special place of my heart as associations really play such a great role in almost any industry. And how they educate their members and non-members and advocate for best practices regulations and a number of other topics. The challenge of associations have, as well as really many almost anyone in any industry, is how that connect with their evolving audiences.

Sometimes that requires small tweaks some changes.  Other times requires a larger transformation. And that's where we're going to take today's conversation. Garth it's a pleasure to have you with us today. Why don’t you tell us a little about yourself, HFMA, and your role there.

Garth Jordan: Sure. Thanks to me to everybody on this round table today.

My name is Garth Jordan. I'm the chief strategy officer for the Healthcare Financial Management Association. We are an organization today of about 56,000 individuals who work in the business side of healthcare and hospitals, large health networks throughout the United States.  Primarily in healthcare finance and accounting, but also a variety of other roles.  Our primary job with that membership audience is to support them in their ongoing lifelong education, life-long networking with each other within the industry of healthcare, and we have gone through a transformation over the last few years that were eager to share with you all day.

Fred: Great okay so you mentioned transformation.  But your transformation didn't start today.  Actually, you started this story a couple years ago and HFMA was seeing some trends that was causing some concerns and maybe raising some red flags as far as what you needed to do to continue with your membership.  Can you talk us through what that looked like and how did you know that HFMA actually needed to make a change?

Garth: Sure.  There were a few things.  So this is going to be a bit of a long answer.  So the first thing that was most noticeable was an internal kind of red flag so to speak.  And that was that we looked at about seven years of data. Pretty simple data.  And that was our membership was flat for almost seven years straight from about 2008, 2009 through 2015-16 when we really started our efforts.  We were around 36,000 members and we were either kind of ebbing and flowing, give or take about one or two percent a year.  Sometimes losing, sometimes gaining.  But right in that 36k mark. So that was just that stagnant kind of growth if you will. I know that's kind of an oxymoron, but that's stagnant growth was basically kind of our first indicator.

The second indicator was as we as we were in that stagnancy, we're watching groups on LinkedIn that were affiliated with HFMA.  Especially the main HFMA group grow to over 58,000 participants. So we saw this tremendous growth just in kind of the natural social networking of our membership.  But we weren't growing.  That kind of sparked us to look more at the association industry more broadly.  We found data that's was from a previous study that a little over 50% of the association industry was seeing the same results we were seeing.  Either flat or decreased membership.  And those in the 45% of the associations that we're seeing growth, they were averaging only about a four to five percent growth rate.  Mow, you might have considered that to be pretty decent growth across half of an industry. But that four to five percent was heavily skewed actually by just a handful of associations that were experiencing tremendous growth.  Hundred percent growth year-over-year. Associations that, for example, were in high growth industries like cannabis, wearable devices, autonomous vehicles, and even Bitcoin, you know types of cryptocurrencies.

The fact was what we were looking at the association industry across the board and seeing just as this really difficult time in terms of growth as well. So that causes to look at a kind of sequentially the association model itself.  For those that aren't really familiar association started a couple hundred years ago with Ben Franklin starting some of the first professional societies.  Their intent and model over the course of a couple hundred years hadn't really changed that much.

The intent was essentially sharing intellectual property, learning from each other, networking with each other. That's really the kind of the main intent from those early professional societies.  Over the course of a couple hundred years you join a professional society association, whether it's a trade or a professional association, and you get a variety of learning and networking opportunities with that.

Fred: And that’s still a pretty standard model this will exist today in many associations.

Garth: Yeah, it's very standard.  And that model is as you join you get a membership you get a few features of that membership with it and then on top of that you get to get access to more learning, more networking, and even more leadership opportunities. You usually have to have a heavy participation and even buy more products and services from your association.

So, associations are fairly narrow and who they serve because they serve a specific profession. Yet, they're trying to sell you a membership, and they sell you more products, and more services, and more conferences, more certifications.  On top of that they are dipping into the same wallet over and over again. It's really hard to grow that way without just growing, you know, the number of members.  You're also trying to get them to pay more, spend more, with you over the course of their tenure with you. So, if it started to prove to be a fairly challenging model not only for us, but for associations across the board.

Fred:  Yeah for sure.  And again, I'm sure anyone who’s here is in an association that’s a model that they probably still run today. Share of wallet, but just you know, having that active component of adding on is something that's still very real.

So as I mentioned on the beginning, you could make small tweaks to make some shifts or there's some bigger transformation that you can actually do.  And so it sounds like as you looked at the landscape, transformation was probably more the direction than the making a small tweak here or there.

What did that look like from a transformation standpoint? You needed to do something more.  Once you acknowledge what you're trying to do, how did you know you actually had to take action and do something with that?

Garth: Well, I'm going to go back to the first question for just a second and say we actually started looking at other models outside of the association world and those models were fairly inspiring for us.

We weren't really seeing a lot of associations do significant transformation. Sure, they were pushing things to the cloud or launching microsites for their magazines and doing a pretty standard stuff. But when we started to look out at other models, you could look at everything from like Harvard Business Review to Coursera out there in the world.  Which is doing amazing stuff with universities and free education. We start looking at those other models for inspiration, number one. And that's one thing that we did. We also did some work on with our board around what transformation meant to us. We brought those models in as well as some ideas that we had, and we started talking about what transformation meant to us. And this gets to your second question, Fred.

We decided transformation wasn't just about digital transformation, but about transforming our business model.  Which really meant we needed to make it easier to use. Easier to access. Perhaps change the entire financial structure of how we derive revenue. And also how we support that with both technology and our staffing. So when we use the word transformation, we're talking about it from a very holistic perspective.  And to be maybe a little dramatic or over the top about it, it was almost as if we were saying we need to keep building, or keep working on our old model if you will, and build an entirely new one from scratch on the side and be ready to launch that over the next couple of years.

So we were thinking about transformation essentially from the most holistic perspective you could take it.

Fred: Yeah, and that's good.  You can't stop doing something as you plan and prepare for the next . You have to run those in parallel because you’re not going to stop your business model today, just so you can start to think about implementing a new business model later.

So as you looked at that business model what kind of methods and methodologies did you actually apply to come to some conclusions with a new business model looks like?

Garth: So in an association you have, and just like any other business, you have a variety of stakeholders. So we have, I would say, several groups of primary stakeholders.  Our staff, of course because they care about the business and their jobs. Our bored because our board is comprised of our members. They're not shareholders, they're shareholders in passion, not so much financially, but in passion. And then our members themselves who are also, if you will, our shareholders.

So all these different stakeholders. Once we decided that transformational was important to us, we have the agreement going forward that we needed to do something.  But we didn't know what that would look like yet. So we decided to take the concept of human centered design.  Use design thinking, essentially, and we adopted an adapted design thinking for our strategic planning process.  So, in a nutshell over the course of about six months what we did was we engaged our staff and our board and about a hundred and twenty members.  We collected a huge amount of qualitative information about the day and the life of a member, of a customer.  And we distilled that into the major themes that we saw in their in their kind of daily lives in terms of what they needed from an organization.  So that they could be successful in that their organizations. So they could be successful.  And that's really the power of design thinking and human centered design generally is that it kind of forces you into a very empathetic view. So that empathetic you gave us the kind of high-level themes that we needed to address with a new business model.  From there essentially a couple of the high-level themes that came out of it were straightforward. Like we need ease of access and ease of use of a model, right? In other words, we had an overly complicated model for them to access.  Another example was they wanted to be able to give all of their staff access to what we had to offer not just in onesies twosies, so to speak.  So, there were a variety of themes like that.

Then what we did with all of that information was we followed the design thinking pathway and we essentially created a prototype of what an entirely new model might look like.  Went out to Wix.com and I just made a fake website that was just meant to give someone a high-level experience of what it might be like to join this new HFMA.  And in doing that we realized we would have to get everybody on board. We put that prototype in front of our board and some of our members to see if we were even kind of heading in the right direction.  And that made a huge difference.  

That was at about the time when we decided ‘hey, this is a huge change for us.’ Even if this prototype is wrong, and it's either right or it's wrong or it's somewhere in between, we're going to need a lot of help with this transformation.  So, what we did at that point in time was we engaged ICF to help us think through the next significant steps that we were going to have to take.  ICF Next helped us kind of go through a couple more phases of that prototype.  And not only think about the future of that business model and how we needed to evolve it, so we had a kind of a final destination to design toward.

But, there was a really key and interesting, I would say turning or tipping point in our relationship with ICF Next. Within the first couple months where we realized that big project, that huge transformation, was going to have to be split into three main projects.  One was, and we were already working on it, the design of the new business model. What is it going to look like and how are you going to execute it?  But then the other two in parallel were the design of the technology that supports the implementation of that business model. Which we were nowhere near close. And the second was the organizational design.  The people.  The organizational structure.  The business processes.  That organizational design that will support a new model.  We were designed around a 200-year-old model, not around a contemporary business model. So that was where the relationship with ICF Next for us the initial value was significant there and it took off from there.

Fred: You mentioned the two things that I love to hear about transformations, which is people and process that goes along with technology.  A lot of people think transformations, and again we use the word transformation, big word first and then digital second.   Some people think digital transformation is you put in technology it's going to solve problems.  But, really people and process is a huge other part.  And that is an organizational design component that goes into that as well. So, you're right most organizations are revolved around the staffing of that 200-year-old model. That changed has to go in place with your digital experience transformation or you're going to struggle.  I think associations do struggle. I'll say organizations in general, you know, struggle with and how do you actually maintain the new model if you're not staffed correctly to do it.

Garth: Right, exactly.

Fred: So as we look at the business model you mentioned some of the outside external sources that you kind of looked at. Can you elaborate a little bit more on some of those external influences that you saw that made you want to think about ‘this is how our business model needs to change’ and how you actually evolve your business model?

Garth: Yeah, I will.  So let me talk about the old model first just briefly again.  The association model and this is again, very true across almost any professional association we look at, they're built around three verbs:  Lead, Learn, and Connect.  And so, we what we do around Lead, Learn, and Connect is create product lines and experiences around those three verbs.  So, for example, the Lead verb, we give people volunteer leadership opportunities, speaking opportunities, writing opportunities and kind of treat members special around those types of opportunities.

In the Learn opportunities, we have online learning. We have magazines, certifications, fellowships, We have those type.  Conferences both virtual and face-to-face. We have the learning opportunities for lifelong learner.

And then the connect opportunities are face-to-face networking events as well as online communities, that kind of thing. So, that's the traditional model and we didn't really think about integration of those three things very well.  As associations we didn't really think about the holistic experience.  A seamless experience.  Sure, we have some single sign-on and that kind of thing. But again, we would ask people to buy a membership and then buy and/or somehow kind of wean their way into any one of those product areas or product lines and experiences.  Dipping into wallets over and over again.  When we looked at other business models, whether it was the Harvard Business Review model or Coursera, we started even look at things like Spotify, New York Times.  Of course, LinkedIn, maybe an obvious one. You saw freemium models. You saw tiered access.  What we didn't see was models that reflected this association model where there's like a hundred different product lines that you have to kind of navigate by your way into.  

The one that was most inspirational for us was actually, it's probably a very obvious one, but it was Netflix and for a couple reasons. Netflix is still a content organization that's very much what an association is about.  When you layer on community it kind of adds another dimension to it.  But it's very content heavy. When you look at Netflix you have your monthly subscription.  You can turn it on or off whenever you want.  But Netflix doesn't care on any given day how much content you watch.  They don't care whether you're looking at content that they license or whether you're looking at a Netflix Original.  They're very personalization heavy.  Meaning, you know, I can go in and get all those great Netflix Originals recommended to me. My daughter can go into her account all on the same Family account etc.

At the same time, they're very data driven. I think there is pretty well known that Netflix Originals are built off of consumption data.  They also have a really interesting measure that's about a kind of what the value of what you watch.  So, Fred, if you watch Friends 80% of the time, they know that Friends is the primary reason that you have your subscription to Netflix. So, they're able to use that information to maintain you as a as a life-long customer based on what they license and/or what their Original creations are.

So, we took that as our inspiration in part because that Netflix model, as well as many others that are like a Spotify etc., they’ve set consumer expectations at a bar that's much higher, frankly than associations have set for themselves, or live up to.  So, we started thinking about what it meant to be that all access, or open access. What it meant to be dated driven. What it meant to, meaning use that data to only create the stuff that people want instead of creating the stuff that we think they want.  And we're actually doing it based on their consumption and how they vote by clicking or vote with their feet so to speak.  So those were the types of organizations we looked at that were our inspiration.  The one that I would also mentioned that we looked at, and it was it was inspiring we didn't necessarily follow the model but it was inspiring because how they disrupted an industry, was Warby Parker.

Warby Parker basically disrupted the ophthalmology industry by enabling people to buy glasses cheap.  Give glasses away with one-for-one, they give one away when you buy one, That kind of thing.  And the disruption to the ophthalmology industry has been tremendous.  And that's the kind of thing we were thinking we wanted to try to do for the association industry.  To give our industry kind of a swift kick so to speak.

Fred: Interesting.  And I would probably say I would drop my Netflix subscription if they decided to nickel and dime me saying ‘well you want to watch Dramas’ or ‘you're into superhero movies’.  That's not the model that is going to work to keep people subscribed.  Subscriptions.  Memberships.  Those words can really similar but how are you looking at memberships in a subscriber kind of world? And how is your membership model changed? Because you did take some heavy influences from Netflix.  But you still have options to have tiers for who can access what, at what specific point time.  And even that whole tiered metering kind of scenario, to continue to bring that engagement.  Can you elaborate a little more, or talk some more about how you're actually adopted those business components into now your world?

Garth: Sure.  So of course, you know, you're a non-member or you're a member and people think that they're just kind of nothing in between.  At least in most associations there are really nothing or not much in between.  And that was true of us prior to launching our new model.  So what we've done with the new technology in this all access model, in the first place, we went from a membership that costs about $335 and our membership not cost $435.

Fred: So, you increase your price?

Garth: We increase our price by that's about 33 percent.  And, we actually didn't lose numbers when we did that price increase.  But we moved from that kind of nickel and dining, as you call it, to the all-access model. Which really enhanced the value. At the same time that we did that or around the same time we did kind of some staged launching.  We launched not only the all-access but we launched a guest account which gives someone an opportunity to just give us a name and an email just like you would expect on say Spotify or Pandora.

Fred: Low barrier of entry.

Garth: Right, low barrier of entry. And then they can actually experience a wide variety of the content, mostly educational content, as well as news and other content that we have that you normally would bump up against a like a metered wall right if you're not a guest.  So, it gives them a little bit of a deeper access.  And then within about another eight months after that we launched also trial membership. So again, you know, you give us a little more information which includes credit card. And you let us know if you want us to bill you monthly or annually.  So, it's like my Spotify subscription frankly.  And then you can actually try everything during your first month, right, before you actually let us start to bill you.  For example, you can go online and you can actually consume an entire certification which would normally cost you, you know, say $500 retail. Now, that said, you can't get the certification unless you're a member. So there's a little bit of a, you know, of a carrot at the end, right? But the point is that people really want access and they want to try things before they necessarily commit.  And I think we as associations have to feel comfortable with living on the value of content that we provide and feeling good that that's not really a gamble to give people that trial.  

So, what we've seen in short order now is we have over I think we're close to 20,000 guest memberships. Which is a group of names and emails that we obviously want to convert and market to that we didn't have before.  We didn't have those kinds of qualified individuals prior in our old model, number one.  We just launched trials less than a week ago and we already have over a hundred people on the trial membership.  So and we didn’t do a massive marketing roll out.  We just left it passively on the website.  We're already starting to see traction with that.  So again, taking our cues from a more contemporary models that are more subscription models and applying them into the membership sphere.

There's still a difference between those subscription and a membership. My subscription to Spotify I don't feel connected to a community so to speak like I do in my membership with the Americans Society of Association Executives. So, there's a difference, but there's no reason why the models we can't learn from each other.  

Fred: So now you have a new model.  You have some new business rules. You've got some pricing changes.  But now implementing that experience is a little bit different story.  Let's transition and talk a little about how you've actually technically implemented these changes. That requires technologies to talk to each other that is about design, user experience, etc.  Can you talk about how took that and then transformed it into a digital experience for your members?

Garth: So most associations have three main kind of systems that have to work together. We have an association management system or customer relationship management system CRM. We have a content management system and we have a learning management system.  We focused on the CRM and CMS first.  So we have a Salesforce CRM and went with Adobe Experience Manager for our CMS.

Which is pretty high-end for a small organization.  The reason we went there was for some pretty straightforward reasons.  Future ability for plugins and integrations. That's probably kind of on the lower end of the rationale. The higher end of the rationale is for personalization. So, I alluded to that when I talked about Netflix.  With us, for our audience, being able to serve up someone in healthcare finance, different types of content on policy, regulation, future facing technologies like how AI is going to impact healthcare finance, down to certifications.  Is a certification meaningful to you? Should we serve it up to you and ask you to go ahead and give it a try? Those are what was probably one of the biggest drivers for us as well as being able to have just a very fully integrated experience.  Someone could come to the website so to speak, which is not a website, it's our product now, right?

I need to call it a website.

So if someone can come to the digital product, you know log in, and get access to all of the content, all of the community, in a very integrated way. So if you're in the community and you're consuming some content from the community and it makes sense for us to say to you, ‘hey, you should probably look at this certification.’ We want that fully integrated experience.

So, in working with ICF and trying to create this implementation, of course, we did not have the development and expertise.  Nor did we have necessarily the model that I'm sorry the IT development expertise nor the model development expertise.  And that's where the partnership with ICF for us really started to shine for us was when we made our final decision on the CRM and the CMS the development, we went through about 15 sprints to bring it all to life.

So you're talking about 30 to 40 weeks of work to bring it all to life once the design was done. At the same time the last thing I'll say about that is in going towards kind of a more contemporary CRM and CMS for us, at the same time, we will build a data lake so that we can actually start to get a more holistic and integrated view of consumption and what's driving the engagement to with the digital product.

Fred: That's real smart. You know even if you're not going to activate on that data right away, the fact that you're collecting it in all these different systems and putting in a place that you could start to put layers, extract the data, use it to influence member, non-number interaction, the kind of versions of your funnel that exists is real smart to have that upfront as a strategy then a after the fact strategy.

Garth: Yeah, it goes back to that whole list to transformation conversation. Yeah, I failed mention that we looked at it data as a major component of that transformation.  I’ll say this, we were trying to collect 250 to 300 data points on every member prior to our transformation. We actually simplified and reduce that by about 80% and we're now in collecting maybe 40 to 50 data points.

We figured it's better to start with the kind of the simpler data collection and then build complexity from there. And we're already seeing, less than a year out from that redesign of the data, and the data architecture of the data lake, the storage of the reporting, we're already starting to see how data is much more easy for us to use, analyze, understand, and make decisions from.

Fred: That's smart. And again, you know it's different skills, different things, if you have almost paralysis by analysis at times if you have too much. So the fact that you reduced those data points down to actually more actionable data points than anything else as a real smart move. And I think a lot of organizations can learn from that because there's always the ‘well what if someday’ but really the ‘what ifs’ can always burden down the ‘what can we do now?’ and how do we make this work for us to see actual results and some ROI?  So it’s a real smart move to streamline that.

Now, data points on your members isn't the only thing you streamlined. If understand correctly you also have products that you're now making available.  But as again so many products that are out there whether to be content or other kind of services, what did you and how have you guys actually streamlined that to provide more value, I’m going to come back to that word ‘value’ that you use earlier.  Associations as a value proposition, why you want to subscribe to spend your money with them. So how have you actually streamlined your services and your products to actually provide greater value than maybe having the plethora of anything you might possibly want, to now more narrow like, the things you really want and need?

Garth: Sure, So in our old model, so to speak, we had multiple products.  We had newsletters. We had a magazine. We had various webinars and podcasts and forms of content media. We had an online learning. We had certifications and all that stuff.  We even had you had to buy access to an online community separate from your membership. So we have all these different products, number one. So now a to your point is all access, right? But we didn't just make everything all access to the say it’s all the same.

We did get rid of a variety of products that weren't being consumed especially early on.  At the same time, we used the new content management system to serve things up more effectively more efficiently, etc. I want to get back to part of the storyline that that tends to, it's not the sexy part, but it's a really integral part. And this is where ICF really helped us think through a lot of it. Our content generation was happening across I think about four or five different departments within HFMA. We redesigned that to be centralized and now we have essentially one content department.

So instead of having people focused on the output, meaning I make webinars, I make magazines, I make newsletters, I make online learning. We now have a team that looks at the content that's needed. So, I'll take an example. Price transparency and healthcare. That's a high-level topic. That content team looks at that high-level topic and says, ‘How do we now need to treat that topic over the course of the next three, six, nine, twelve months?’ And they may say ‘well, let's start off with a series of articles.  And then get into expert interviews on podcasts or webinars.  And then we'll see if the consumption tells us that we need to go into more depth with online learning and perhaps even build a certification of that.’

So, it becomes driven based on the topic number one, and the consumption number two.  Not the individual department outlets. And that centralization is very unique in the association world anyway.  But it also really supports, so it's not only more effective and efficient for us, it also supports this unified digital access model.

What we've done is we now were treating content almost like it's a financial budget.  At one time, I think it was in March of 2017, we looked at how many words we published.  We published like 81,000 words through you know, webinars and news bulletins and magazines and all that good stuff.

We now publish somewhere around 30 to sometimes 50% less than that. And it's because ‘A’ were more targeted and ‘B’ we're really tackling in depth fewer topics because we're more concentrated on what the consumer is actually using right? Not based on what we think they should be reading.

Fred: Yeah, and that's I think everyone can take a lesson from that.  Again if you're an association or not.  You have a new model, you want to actually provide the value because value is something every organization wants to provide. Even Netflix trims content based on what their viewers are doing. It is like some seasons only last two seasons because of those same kinds of analysis.

So it's a very interesting way you've approached it.  But at the same time the value to the member, which keeps them renewing, and retention, and then acquiring as well because hopefully word of mouth is getting out saying HFMA is presenting some really good content here, you should join, you know, I think that is a recipe for success when you have all the right ingredients.  And sure enough this is a multi-year process where you have started to really put the recipe together and find the right ingredients to make this transformation.

So let me ask you this. Do you think you've transformed a 200-year-old business model?

Garth: Well I want to play off of so I'm going to hold off on my answer and play off of something you just said a minute ago.  Which was really about you said but I'll say to different way.  It's really about this kind of conversion process, right? We're trying to help a potential audience understand who we are, what we have to offer, but more importantly how we fitted to their needs and the value that they want to extract from lifelong learning networking etc.  When they show an interest in who we are, maybe become a guest, or something like that, we want to convert them, of course to a paying number. Then go beyond that and create loyalty.  And then even beyond that and create advocacy.  Advocacy for who HFMA is but advocacy for the profession and for improvement to our industry. What this new model has allowed us to do, frankly, is to be very methodical in that very in that long conversion process.  You can create an advocate for Spotify pretty quickly but to create an advocate for a profession in an industry takes a little bit longer time, it's a little more in depth.

But what we've got now is a very integrated tool and process and product that allows us to look at that conversion.  And where we can start to turn dials, using data, to help us understand where we can turn dials whether we're adding a feature into membership or subtracting one.  What we're what we're doing now, so this is early for us, is we're looking at where people are consuming across all of those products and services and experiences we're starting to build a holistic engagement score.

So that for example, if you're a guest member on a scale of zero to a hundred, guests maybe on average have a score of whatever 15 to 30.  But as you become a member, your engagement might be 40 to a 50.  If you become loyal it might be a 60 or 70. And we're starting to use this information to build, it's almost like saying I can take a bunch of data off of the body, and independently that data that doesn't tell me much. But if I mash it all up together…

Fred, I can tell you when you wear your Apple watch, now it pulls off seven different pieces of data  and it can tell me how well you're sleeping at night.  That's very rich information. And that's what we're trying to do with this. So, in that regard that's one example to give you an answer to your question. I believe we've transformed the 200-year-old model. Because now we have that capability which we did not have before and we're seeing results from it.  

Fred: So I'm going to show some of these. So this is what we're seeing, right? Increase in member renewals.  Increase in consumption.  Increase in members per month. I'm sure there's other ones as well, but you are seeing success in delivering.

Garth:  Absolutely and that 25% increase in new members per month. I want to poke at that just for a quick second and say that 25% increase was immediate. Which is really interesting.  So we launched. June 1 or so of 2019. So month to month it over previous months, you know year-over-year previous months, we're seeing a 25 percent increase in new members. And that continues today even during this this COVID strangeness that is going on for all of us. That has not decreased at all.  And our guest member growth is still there and our conversions of those guests are slowly improving as we learn over time what it means to convert.  And of course, we're gonna try to learn how to convert numbers into loyalists and advocates as we as we use the data as I mentioned earlier.  

So it's important to say that we had some success, yes, from our launch. But it hasn't really changed that much especially those the hundred percent in the 25 percent numbers. The renewals is pretty stable as well, but we're in a renewal phase right now so it's hard to be exact.

Fred: Sure.  This has been a great conversation. I want to thank you for your time today about talking about this amazing initiative that we've taken together of last couple years. I'm going to bring Ben back to go through some questions that have been coming in as we've been talking and see there's some answers, we can give them.

Ben: Yeah, thanks Fred.  Great stuff guys. Really great conversation. So as a reminder to everybody on the line you can submit questions using the questions panel and we will try to get to as many as we can here.  So, I have a question to maybe get us started and give folks on the line a chance to enter their questions.  You know this story as we've talked about, is all about innovation.  So, does innovation stop now for HFMA or if not, how do you sustain innovation?

Garth: Well no, it doesn't stop. So keep an example, that's what I kind of do, live through examples, when we developed this new business model we looked at it as if we've developed a new platform. So think about Uber as a platform, right? It allows people to rent someone's car, rent a driver and get from A to B. But now that they built that platform, on top of that they're able to build Uber Eats. And then they're doing non-emergency medical transportation on a platform, right? So, we've built a platform now.

And now, the question is how are we going to take advantage of this platform? We can move into adjacent markets. We could, for example, help another association under duress today run their association for them essentially. I know it's not this easy, but we could copy and paste our platform and run another association's business for them. That's like being an association management company. So those are just two examples of what this investment in people, technology, process, business model has enabled us to do and think of.  

And we are on the cusp, we're going through a strategic planning right as we speak here. And we are using the now, near, far model adapted by Ford from Steel Case and we're coming up with some really cool ideas about not only how to use this platform, but how to evolve it to a next step.

 

Ben:  That's great but they know we've had a lot of conversations about the now, near, far model. Encourage everybody on the line to Google it if you're not familiar with it. It is a really interesting construct for a strategic planning. Okay, we're a question coming in on the line.

So, Garth, knowing what you, what advice do you have for other associations who need to affect a similar transformation?

Garth: So I’ve spoken about this with a variety of association executives.  One-on-one and in groups, at conferences. I've spoken about this particular transformation. And one of the kean interests that that folks have is how do I get started? And for us, again, I go back to how we got started was we adopted and adapted design thinking for strategic planning.  Which was kind of an interesting marriage. Design thinking is usually, was mostly being used for things like product development, maybe some service development.  Most recently now, to tackle large social challenges. We basically used it to talk about transforming the organization, of course. But we did it in a way because it's human centered and because it really takes in to account your member point of view and your member needs in a very unique way.

What that allowed you to do is help your board, your executives, and your staff get off the mark.  So again the feedback I usually get is we don't know how to get started. And it seems to me that getting past that point of inertia, there's willingness, for example to use reserves to invest in a new model or invest in new technology.  But we don't know how. We don't know how we can reduce the risk of what it means to engage in such a significant change.  And so I'm a big fan of human centered design because I think I've been practicing for 10 years.  What I would say to folks is if that doesn't work for you, find what it is that will allow you to get off the mark. But do it in a way where your executives, your board, your staff and even your members have a common expectation. Otherwise you're going to start to run into battles with stakeholders. And that's not a good place to be.

Ben: That's great, thanks. All right, we have time for one more question. Doesn't look like they're any other questions in the queue. We'll give folks just a moment here if they're any other questions.

OK, so I actually have one other question. So, Garth, tell us a little bit about, I know that you're in a renewal cycle right now for your membership so that's ultimately going to be the true barometer of how this has been received.  But, tell us a little bit about how your current membership has received this transformation. What type of feedback you're hearing from the community?

Garth: Sure.  So, the quantitative feedback is our renewals are still higher than they were prior to this.  So in fact I think the last number I saw you had on the screen eight percent, we were a seven percent, you know, depending on the week and it might be five percent.  But it's still higher. So, I don't want to not talk about the quantitative side.  But on the qualitative side what we hear over and over again is that the access, the accessibility, the ease of access, the personalization, that contemporary approach in experience to basically make their lives, their professional lives easier. You know, Netflix made our entertainment lives easier. I can watch anything I want. Whenever I want. At the airport when I'm on two hour delay downtime. There's no fear of missing out, right?

Well we're trying to do the same for the professional who cares about life-long learning and life-long networking. And there is a truth, for those who care about that kind of thing, there's a sincere appreciation that is reflected back to us the in written comments and calls to our member services team.  In comments that are made directly to our CEO and our executive staff.  To our board members. There's a passion for this content and to have it kind of now free it out in the open, not free, but out in the open once you've paid your membership dues is we're getting a lot of positive feedback.

Ben: That's great!  We are just about at time here so we will wrap everything up. Garth, Fred thank you so much. This was a great discussion here today a really inspiring story and one that I think we all can learn from. So thanks everybody on the line and we will see you on another panel discussion soon.

Fred:  Thanks Ben.

Garth: Thank you.


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By Fred Faulkner

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