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Changing Climate for Chambers

Evolving Role, Shifting Resources Facing Chambers in 2002 and Beyond

by Mark Wright
for American Chamber of Commerce Executives Chamber Executive newsletter. Copyright © 2002 by American Chamber of Commerce Executives. All rights reserved.

Welcome to the future. As chambers enter the New Year, they are also moving into a new era in which past assumptions and practices are being questioned and changed.

That new era is unfolding against the backdrop of a troubled economy, which is differing in its effects from one community to another. While the economic wind is blowing cold this winter for Dan Ringle at the Goshen County (WY) Chamber, it is driving prodigal members back to the shelter of James McCurdy's North Suburban (MA) Chamber.

"The agricultural sector is hurting," said Ringle. So he is keeping a cautious eye on his membership rates, and anticipates smaller dues increases.

"Here the recession tends to help," said McCurdy. "Some chambers have had incredibly successful campaigns recently."

McCurdy explained that, at least for his chamber, banks are coming back because their business is off and they're sending people out to get more customers. He's seeing fewer people from software companies, on the other hand, because they are busy. "Businesses need the chamber to help in a down economy," he said.

That is not to say that dues revenue is a font of security. Chambers are increasingly looking at non-dues sources, including project-related grants from government agencies.

"There is no question that dependency on dues has shifted dramatically," said Christopher Cooney, President & CEO, Metro South (MA) Chamber. "That trend is going to continue." Cooney said his chamber is seeing nearly fifty percent of its income flow from non-dues sources, such as allotments and sponsorships.

Income pressures are making attention to expenses all the more important, particularly administrative overhead. "One of the things I've seen in the industry," said Cooney, "is the change from chambers that have been thick with secretaries and administrative assistants to chambers that have none." Instead, says Cooney, "chambers are opting for fewer staff but, possessing greater and more varied skills."

A countervailing trend puts some chambers in a double bind, though. Volunteers are harder to find. "Where chambers of our size used to be able to rely on volunteers to be our receptionist, we can no longer do that," explained Melanie Stepp, President, Geneva Area (NY) Chamber. Stepp said she recently had to hire a full time person for that job.

Industry practices are emerging that will likely persist through the economy's cycles. Chief among them: running a chamber as a business, leveraging resources through partnerships, using technology, and filling a value-added niche for customers.

Running a Chamber as a Business

While chambers are typically organized as nonprofit entities, they would serve their members--and their own financial viability--better by adopting a "for-profit" mindset, some execs say. Operating in effect as a for-profit organization puts the exec in a better position to understand and respond to members' own business challenges.

"The 'not-for-profit' misnomer doesn't serve us well," said McCurdy. "Chambers need to act like the businesses they represent."

Since a successful business understands where it fits in the marketplace, it can better focus its efforts and resources on what matters most to its customers. Instead of an approach that might be characterized by the old political adage, "I seen my opportunities, and I took 'em," the profit-oriented chamber has a business plan that says: "I seen my customers, and I served 'em."

Partnering

How best to deliver that service is a question being answered by some chambers with one word: "partner." Ok, some use two words: "strategic alliance." Either way, the idea is the same: leverage limited resources by teaming up with neighboring chambers, government agencies, economic development groups, or others who bring complementary goals and finances to the table.

"We have to get away from the 'Lone Ranger' mentality," said Kristi Brown, Executive Director, Greater Starkville (MS) Chamber, an agency of the Greater Starkville Development Partnership. "Partnering makes us good stewards of our membership and tax dollars, and we get more bang for the buck."

As Eric Voyles, President, Galesburg (IL) Regional Economic Development Association sees it, partnering offers the advantage of synergy and shared resources, without the disadvantages of actually consolidating organizations into some new entity. "We just partner on what we want to, and then anything that only our organization can do we handle alone," explained Voyles.

Using Technology as a Tool

Chambers are finding another way to stretch limited resources, and it's as close as the nearest phone line. The Internet and e-mail have had a tremendous impact on how some chambers serve their customers.

"E-mail has taken a huge chunk out of our printing and overhead for communication," said McCurdy. "We couldn't ask for a better tool to increase productivity."

Not only is e-mail obviously cheaper than snail service, it facilitates faster communication of breaking news that can benefit businesses. Informing members about a kink in a business-supported bill snaking its way through the legislature, for example, can generate a quick round of phone calls to address the problem.

Filling a Value-Added Niche for Members

Unless it is the only game for business in a very small town, a chamber increasingly has to compete in a marketplace of organizations whose interests, missions, and audiences overlap. More chambers are concluding that they cannot realistically expect businesses to join, and subsequently renew their membership, out of obligation or loyalty--even though some communities are still fortunate enough to see this.

"We have to keep talking to our members and find out what their marketing objectives are and what their budget is focused on," said Kimberly Bless, President, Northwest & Schaumburg (IL) Association of Commerce and Industry.

To find their niche in the community, market-driven chambers are asking businesses what they need to succeed--in 2002 and beyond.

Mark Wright for American Chamber of Commerce Executives Chamber Executive newsletter. Copyright © 2002 by American Chamber of Commerce Executives. All rights reserved.