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M E M B E R S H I P
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Network Metrics - A Comparison with a Single Profession Network
DEFINITIONS
Overhead - The amount spent on salaries, benefits, rent, communications, and supplies by the network.
Direct Marketing – This is the expenditure for internal and external meetings, publications and advertising by the network itself.
Indirect Marketing – The amount spent by members promoting themselves to other members and clients at no expense to other members. Indirect marketing is a function of the number of members, their size, common interests and expansion. Indirect marketing does not necessarily represent dollars spent. For example, saying “Member of WSG” on stationary costs nothing but has significant benefits to member and all other members.
A. LAW FIRM NETWORK: Dues for law firm network at an average of $10,000 per year for 100 members in year 1. Dues in 2008 remain the same but the number of members increases to 150. Direct marketing budget remains flat as percentage of dues (yellow bar) since firms will pay only so much dues. Indirect marketing increases as members begin to know each other and market membership to clients. Indirect marketing reaches a peak as a result of a limited number of members or reduced participation.
B. NETWORK OF NETWORKS: Dues for year one are on average $5,000 for 200 members. Dues in 2008 remain at $5,000 per year but the number of members increases to 2000 members. Direct marketing budget increases the number of members rises (yellow bar). The amount per member remains flat. Indirect Marketing – Indirect marketing is a function of the number of members, their size, and common interests. With leading firms and companies, continuous expansion of membership, tools to facilitate contacts and identify common interest and development of relationships, indirect marketing increase geometrically.
CONCLUSION: In a “network of networks” members are able to leverage membership to create a dramatic increase in value while at the same time paying 50% less in dues. Continuous growth means new blood into the network with new ideas. A single profession network has limited growth given the limited number of jurisdictions, limited marketing, challenge of implementing new ideas to a static group and other network externalities.
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© World Services Group 2008