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CREDENTIALING DEFINITIONS Certification. An organization grants recognition to an individual who has met predetermined qualifications or standards, usually a voluntary process (e.g. an interior designer is certified.) Certificate of Knowledge. A process by which an individual demonstrates a narrow scope of knowledge needed to correctly perform a certain profession or occupation (e.g. an automotive technician can receive a certificate of knowledge.) Licensure. A mandatory credentialing process by which a government agency grants permission to an individual to engage in an occupation or profession, attesting that he or she has a minimum degree of knowledge or skill (e.g. a physician is licensed.) Accreditation. A process by which an entity grants recognition to an organization that has met predetermined standards (e.g. a chamber of commerce can become accredited.) A number of economic factors are driving associations to re-think the products and services they are providing to members. The reality is that members are demanding greater value for their membership dues investment and that associations themselves are under increasing pressure to find new resources to fund products/services. A certification program has become an increasingly attractive way for associations to address both issues. From the members’ perspective, certification is an excellent way to differentiate themselves in their profession as individuals that meet specific professional qualifications (education, knowledge, skills, quality, etc.) and have been granted recognition as such. The profession also benefits by having established standards of professional practice. The profession or occupation is able to regulate itself by using the standards that are developed through the certification program. Lastly, the association benefits by being able to provide its members with a program that offers significant value. While a credentialing process is almost always voluntary, most members strive to achieve certification because of the ‘status’ and business advantages it offers. This built-in member demand, while it may require re-directing valuable association resources to meet, provides the association with a new opportunity to generate non-dues revenue. THE IMPORTANCE OF A SOUND BUSINESS PLAN Regardless of the reason that your association wants to establish a certification program (e.g., better position the profession, develop industry practices consensus, add a new value-added member benefit, generate non-dues revenue), step one has to be the creation of a business plan and application of sound business principles in order to maximize the chances of program success. The risks associated with program failure (wasted resources, loss of credibility with members and the profession, etc.) can be catastrophic to your association. The following are a few key elements of a certification program business plan. Marketing. Every business plan begins with market research to develop a solid understanding of what market segment and what customer within that segment you’re targeting. Being specific is critical to your success because it will enable you to focus your resources and message. ‘Positioning’ your credential so that it is differentiated and having a solid understanding of your competition for certification are also important. Program Features and Benefits. Value is created when members perceive they are receiving benefits (e.g., job opportunities) vs. features (e.g., a referral directory.) You need to understand this difference to be successful and keep the credential as the program’s key benefit. Goals, Strategies and Tactics. A good business plan has goals that define what the program is striving to achieve. The more often goals are measurable the better, because they can help the organization gauge its success in accomplishing the plan. Goals are supported by strategies that define a course of action for achieving the goals, and by specific tactics for implementing the strategies. DERIVING REVENUE The business plan also must consider the financial implications of the program, based on whether the goal of the program is intended to only meet members needs for value-added programs and services or whether it is also intended to generate non-dues revenue for the association. Key financial considerations include the fees that will be charged for credentialing, projections for program revenues and expenses, and a forecast for when the program will reach a break-even point. Modeling the above information will help you zero-in on what fees you will need to charge to achieve “x” revenue within “y” time frame. In addition to certification fees, additional revenues can be derived from re-certification and from associated program products and services, including continuing education, collateral items (pins, shirts, coffee mugs), certificates and plaques, licensing fees for using the certification logo/mark on the member’s stationery, the sale of the program mailing list, program publications, etc. SUMMARY A certification program is an excellent way of providing a value-added program to your members, enhancing the association ‘brand’ and creating a source of non-dues revenue. Careful thought needs to be given to the financial implications of creating a program, including the staff and budget resources that will be diverted to the program and how long it will take to reach a break-even point based upon projected expenses and revenues. The application of a solid business plan and business principles are also requirements of success. Charles McGrath, CAE, is a Vice President and General Manager of Bostrom Corporation, an AMC with offices in Chicago and Washington, DC. This article previously ran in Bostrom SOLUTiONS, the AMC’s newsletter. For more information, contact Jeanne Sheehy at 312-644-0828, www.bostrom.com. |
