Budget influences market research. (Eye on the Industry).

The majority of associations do not conduct formal research to explore markets for their products and services and to collect information on member preferences--a trend that has remained consistent since 1995, according to research conducted by ASAE. Data collected from more than 1,000 ASAE

Type matters. This finding is evident in trade associations and individual membership organizations, with 39 percent of trade associations and about 42 percent of individual membership organizations reporting in 2001 that they conduct market research, compared with 43 percent and 47 percent, respectively, in 1995.

Impact of budget. The larger the association's annual budget, the more the association invests in market research activities. In fact, the amount spent annually on market research increases proportionally with the association's annual budget (see chart). For example, associations with budgets of less than $500,000 spend a median of $1,000 on market research, while those with budgets between $1 million and $10 million have market research expenditures ranging from $8,000 to $25,000; those with budgets exceeding $10 million spend a median amount of $50,000 on research.

Also, the greater the market research budget, the more likely the association is to employ its own market research staff.

As ASAE's research indicates, formal market research is still elusive for most associations. Given that market research is not a profit center and is not engaged in as a direct member service, some associations may not view it as essential. However, associations with larger budgets may be more likely to conduct and invest in market research because they have more financial flexibility.

For more data on associations' market research activities, call 888-950-ASAE or 202-371-0940 to obtain ASAE's 2001 Policies and Procedures in Association Management: A Benchmarking Guide. Also see this month's article, "Leveraging the Power of Market Research."

Submitted by Denise Armadoros, research associate, ASAE Industry and Market Research. E-mail: research@asaenet.org.

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