August 27, 2024 | Andrew Lawlor

It’s natural to have concerns about adopting a private membership association (PMA) business model.

For instance, will this model offer sustainable benefits? Could it potentially harm your revenue or reputation? Are there financial drawbacks and challenges? 

Like every other business out there, private membership associations have their pros and cons.

When executed well, embracing a private membership model could strengthen your business. Creating an exclusive community, legal flexibility, and a sense of self-control are just a few of the advantages of a membership organization. 

In this blog, we’ll dive into the pros and cons of PMAs and explore how this approach could transform your business.

What is a private member association (PMA)? 

A private membership association (PMA) is an organization or group that operates as a private entity, offering services, products, or benefits exclusively to its members. 

Unlike public services, PMAs operate strictly on a membership basis in a private domain, allowing only approved members to participate. 

Private associations can take many forms, from professional associations and trade unions to social clubs and health cooperatives. Some even offer tiered membership levels depending on member needs and purposes. 

These associations often operate under different legal frameworks than public businesses, giving them more flexibility in structuring their operations and engaging with members.

More on association membership management here.

Common membership structures

Membership structures are of various types, depending on the members’ needs and the stakeholders involved. These include:

• Individual membership where members are individuals, often professionals or enthusiasts in a particular field or industry
• Organizational membership: Members include companies, nonprofits, or educational institutions
• Hybrid membership: This membership structure combines both individual and organizational memberships, where individuals and organizations can both join 

Examples of private membership associations (PMAs)

• Professional Associations: Examples include the American Medical Association (AMA) and the American Bar Association (ABA) that provide networking opportunities for doctors and lawyers respectively
• Health and Wellness Associations: Life Extension Foundation and Optimum Health Institute are examples in the health category, offering members access to healthcare programs, personalized wellness plans, and wellness retreats 
• Business and Trade Organizations: Examples include the National Federation of Independent Business (NFIB) and Young Presidents’ Organization (YPO)

Check out Aptaria’s industry-wide association management solutions here.

The pros of a private membership association

Thinking about starting a private membership association (PMA) can feel like a big decision. You’re probably wondering if it’s worth the effort, right? Let’s break it down by looking at some of the major perks that come with a PMA.

1. Exclusive access and member loyalty 

Members of private membership associations get exclusive benefits that are not accessible to the general public. That’s one of the biggest upsides of a PMA. When people know they’re part of a special group with unique perks, they tend to stick around.

Beyond servicing, it’s about building a community where members feel valued.

2. Legal and operational flexibility 

Here’s a less obvious but powerful benefit — PMAs often operate under a different set of rules than public law. 

This means more flexibility in how you run things. It might also mean fewer licensing headaches or marketing restrictions, giving more room for innovation without usual interference. 

3. Networking and collaboration opportunities

Private membership associations are like magnets for like-minded people and businesses. By bringing everyone together, you create a space for new ideas, partnerships, and opportunities. The connections you make through a PMA can sometimes be just as valuable — if not more so — than the direct benefits of membership. 

Achieve your membership association goals with Aptaria. 

4. Enhanced Value Through Tailored Communication

A key advantage of running a private partnership association is the ability to offer personalized value to your members. 

As a best practice, ensure your members feel like they are receiving something unique and valuable. This will make them more likely to remain loyal to your association.

One way to do this is through high-value content. Think targeted email campaigns and exclusive newsletters that address their specific interests and needs — content that isn’t available in the public domain. 

By focusing on clear public interest topics and providing insider information, you’re sure to boost member engagement and the perceived value of the membership. 

5. Sense of control 

In public groups, members don’t really get to contribute to decision-making directly.  

However, fellow members of a PMA often have an influential role to play in discussions and decisions, making you feel like you own a part of it. 

Members can actively participate, share their opinions, and suggest ideas, contributing to a stronger sense of self-control and satisfaction with the association’s direction.

6. Self-advocacy 

Private membership associations empower members to advocate for their own interests through free speech. 

Whether it’s pushing for industry changes, shaping public policy, or simply having a collective voice, a PMA gives members a platform to speak up and make their voices heard when they need help. This kind of self-advocacy can lead to real, impactful change that benefits everyone involved.

The cons of a private membership association

Of course, it’s not all sunshine and rainbows. Running a PMA comes with its own set of challenges. Here are some of the potential downsides to consider:

1. Membership management challenges 

Managing a growing membership base can quickly become overwhelming. Keeping up with member data, staying in touch, and consistently delivering value isn’t easy. 

However, investing in the right technology can combat these challenges. 

For instance, a robust customer relationship management (CRM) by Salesforce can make managing growing memberships easier. You can seamlessly update members about the perks, latest events, and ongoing programs. 

Salesforce for PMAs — Check out Aptaria’s solution here.

2. Ambiguous legal areas

While private membership associations do enjoy some legal perks, they’re not completely off the hook. There are still laws and regulations to follow, especially around member privacy and maintaining non-profit status (if applicable). 

Furthermore, because of the legal status gray areas, PMAs may face thorough scrutiny by regulatory authorities. 

To be on the safe side, be sure to be updated about all legal compliances to avoid headaches regarding legal, fines, or even damage to your reputation.

3. High operating costs 

Starting (and running) a PMA can be an investment in the long run. Legal fees, administrative expenses, and operational costs add up and could be hefty. 

And since membership associations have fluctuating funds (from sponsors and donors), meeting these costs regularly can become a financial burden.

4. Potential for exclusion 

Exclusion is a double-edged sword. While it can drive loyalty and unique perks, it can create a sense of elitism and exclusivity when not executed properly. 

For instance, if a potential member doesn’t meet the required membership criteria, they might feel excluded. This will in turn affect how your association is perceived and slow down your association’s growth. 

5. Risk of creating echo chambers

Private membership associations can sometimes create echo chambers where similar viewpoints dominate. 

In these environments, members may be surrounded by like-minded individuals, leading to confirmation bias. This bias makes them resistant to new ideas or differing opinions, stifling creativity and hindering innovation.

In these cases, lack of diverse perspectives leads to intellectual stagnation. Without exposure to alternative viewpoints, members may overlook valuable insights that could propel the association forward. 

Final thoughts 

Private membership associations offer a unique way to create tight-knit communities and deliver exclusive perks to your members. 

By analyzing the private membership pros and cons and taking a smart approach to your PMA, you can set up a membership association that not only retains members but also pushes your business toward long-term success. 

If you’re just kicking things off or aiming to boost an existing PMA, the possible gains are big — and worth looking into.

Aptaria is a Salesforce partner, helping membership associations manage and streamline their member base with tailored solutions. These solutions are designed to enhance member engagement, improve retention, and drive growth.

Having doubts on how to get started? Talk to experts at Aptaria.

FAQs

1. Are private membership associations (PMAs) legal?

Yes, private membership associations are legal. However, PMAs operate under different rules and regulations as opposed to public services. 

2. What are the benefits of association membership?

Association membership offers networking opportunities, access to exclusive resources, professional development, advocacy, and a sense of community. This access to shared knowledge and industry insights can enhance career growth and personal connections.

3. How to run a successful private membership?

To run a successful private membership, keep your value clear, engage members, and communicate well. Besides offering exclusive content and creating networking opportunities, ensure to maintain transparency and listen to member feedback.

4. Who can be members of a private membership association?

Members of a PMA are usually individuals who share a common interest or goal. Membership is usually selective, based on the association’s specific criteria, which includes profession, interest, or shared values.