Navigating through membership churn is like trying to sail a leaking boat—it’s a daunting yet common challenge for any organization. While some churn is expected, identifying when it becomes a critical threat is crucial for survival.
In this article, we will take a closer look at membership churn and its common causes. We’ll provide insights into how to improve retention rates and how to keep members engaged. Increasing member numbers for any membership-based organization is far too difficult to allow churn to cause an organization to slow down. Here’s a more proactive approach to maintaining your membership roster:
What is Membership Churn?
Membership churn is the number of an organization’s members who do not renew or cancel over a certain period. Some suggest membership churn is the opposite of membership retention. It is usually expressed as a percentage. A simple example would be if you had 100 members and 10 canceled or failed to renew, your customer churn rate would then be 10%.
Membership churn can also be called turnover or customer churn.
A high member churn rate usually results when members are not engaged, don’t recognize value, or are even ignored. Thankfully, these can all be addressed. It will result in reducing membership churn.
How Do You Calculate Churn Rate?
Churn rate can be determined for any period, whether it’s a week, month, year, or season.
To calculate the membership churn rate, you will need to know the number of members you had at the beginning of the period. You divide the number of members lost by the total number at the start of the period to calculate the member churn rate.
Churn Rate Formula
If an organization had 500 members at the start of a month and had 450 members at the end of the month, it lost 50 members, or .10.
The formula could be expressed as:
Lost members (50) divided by total members at the start of the period (500) x 100.
What is a Good Churn Rate For Membership Sites?
Churn rates can vary widely between products and services and industries. This can make it a bit of an unexact science to determine what is a “good” churn rate.
A 5-7% churn rate is often considered acceptable for a subscription-based membership site. Those operating at a membership churn rate of 4% or below are generally considered exceptional.
Organizations with an 8-10% churn need to monitor turnover carefully. Those with a churn rate above 10% are bailing water and are likely to have issues that need to be addressed. Thankfully, there are proven steps that can be taken to better manage these numbers.
Figure Out Why Churn is Happening
Even when churn rates are acceptable, it can be beneficial to proactively determine why any churn is occurring. While churn rates may be acceptable or even good, there are signs that you may be heading into choppy seas. Here is a look at some common symptoms.
Low Engagement
When member engagement wanes, it is often a sign that disinterest is growing, which can lead to churn. This is why keeping your members engaged in your organization is crucial.
Remember, disinterest can lead to a lack of member engagement, which can result in higher membership churn rates. Look for ways to keep members involved and engaged. This can be anything from polls and surveys to contests and referral campaigns. There are probably a number of wasted member engagement opportunities you may not be fully taking advantage of. Take an inventory of these opportunities and how you can better employ them.
Missing or Late Dues
Unpaid and late dues are a red flag when it comes to member churn. When dues are late or unpaid, it frequently means there is a lack of interest, and membership is no longer a priority.
It is important to monitor dues and subscription payments, giving members plenty of notice, reasons to renew, and perhaps even incentives. Even when members cancel, they may be able to be restored at some future time.
Diminishing Contributions
Another sign of growing member churn is when a nonprofit begins to see its overall and average donations shrink. This could be a sign that some members have discovered a new nonprofit to champion or have simply lost faith in your organization.
If you are at a loss for why contributions may be dwindling, ask your members with a “How are we doing?” survey. If members aren’t thinking about you, you may be losing their support. Member management software can help you track shrinking donations from individuals, providing an opportunity to proactively address them.
Not Taking Advantage of Membership Benefits
One of the reasons they offer member benefits is to attract members initially and to retain them. When members no longer take advantage of these benefits, they may not perceive them as having value. They also may not simply be aware of them.
Getting members to take advantage of benefits available to them should be a part of your member engagement strategy. Remember, when it comes time for renewal, members will weigh costs vs the perceived value they get in return. Keep member benefits pertinent and appealing, and take steps to make sure they are being utilized.
If you haven’t recently conducted a member survey regarding what benefits they would like to see more of, now may be a good time to ask. It also serves as yet another way you can engage them.
Best Ways to Reduce Membership Churn
So, you may realize your member churn rate may be higher than you would like, and you may even recognize some of the symptoms. What, then, are some of the best ways to reduce membership churn?
Have a Solid Member Onboarding Sequence
Minimizing churn in any organization starts by ensuring you have a well crafted, member onboarding process.
This starts with a warm and sincere welcome and extends through a complete explanation of member benefits. Detail what your organization does and why. Encourage them to be involved and demonstrate ways they can make a difference. Make them aware that if they have any questions and concerns, you are there to help.
Be Accessible to Your Members
Knowing how your members prefer to be contacted and making your organization accessible are key components in limiting churn. The lines of communication must be kept as seamless as possible, and a prompt response to any inquiries is crucial.
Provide Alternatives to Canceling
Too often, an organization and its members view cancellations as a black and white issue. In fact, there are alternatives to accepting a cancelation that should be offered to reduce churn.
A reduced or special rate may be an option. Perhaps a lower support level could help maintain support, at least at some level. There are value-added features you may be able to offer. Ideally, you want to say to a member, “Rather than canceling your membership, how about….?” If you can finish the sentence with an attractive alternative, you may have just reduced member churn.
Keep Creating Engaging Content
One of the reasons members are driven to an organization or association is to stay connected and in contact. This is frequently done through news and industry updates. Keeping the content available to your members up-to-date, accurate, and pertinent to them is vital.
Provide examples of how national or world events impact them and your organization. Offer them tips and human interest stories. The fresher and more actionable your content is, the more value you are delivering to your audience.
Educational opportunities are perceived as having great value to members of an association. Keep members on top of trends and technology.
Pre-qualify Your Offering And Your Leads
Another factor that can lead to high turnover or churn is that it is likely that some of those in your organization may not belong in the first place. They may be joining just for a particular benefit. They may not have a real interest in the organization or a reason to maintain membership.
You can reduce member churn by pre-qualifying candidates for membership to ensure they are quality leads. Like customers, no two members are created the same. Ideally, you want an organization of active, involved, and supportive members.
Pre-qualifying leads can make your organization stronger and minimize membership churn.
Don’t Over-hype or Mis-sell Your Membership
Sure, you want to increase members and supporters. Of course, you would like to increase your ranks and income. Just be aware that activities used to increase membership can lead to higher member turnover rates. If you oversell your organization, ove-rhype its activities, and over-promote your benefits, it can lead to disappointment and cancellations.
Organizations can sometimes be distracted by the lure of a shiny new member so that they forget that an uninvolved, uninterested, and unengaged one has little value. They may, in fact, be a cost to the organization. To reduce member churn, focus on increasing the quality of your membership. Maintain the integrity of your sales/recruiting process. It will pay off in a lower membership churn.
Key Points
In review, the key points in managing and reducing membership churn include:
- Know Your Churn Rate
If you are not tracking your churn rate, start now. Measure and track it by the month or year. Organizations that have churn rates affected seasonally can benefit from tracking them quarterly. The higher your churn rate, the more effort it will take to reduce it.
- Look for Symptoms
Higher churn rates have symptoms. They could include late payments or missing payments. Contributions may be down. Member engagement may be lagging. Interest and energy could be lacking.
- Reduce Membership Churn by Addressing Symptoms
Knowing the symptoms of a high churn rate is one thing, addressing and correcting them is another.
If members aren’t engaged, purposely and intentionally engage them. If contributions are down, determine why. Stay on top of renewal payments and monitor them closely. Improve and upgrade content and educational opportunities.
- Review Your Onboarding Process
Are candidates qualified? Review your membership benefits to make sure they appeal to members and are being taken advantage of. Ensure communications are seamless, and member contact is handled through the member’s preferred methods. Provide members with easy-to-understand details of what the organization does, how it does it, and statistical data to back up its effectiveness.
- Think Quality, Not Just Quantity
There is a cost to membership churn. It wastes energy, time, and resources. Churn can stall momentum and impact morale.
When you raise your standards and seek to improve the quality of your membership roster, you are building an organization of long-term supporters. You are building a community of people who are easier to keep engaged and who will take advantage of member benefits. Not only will support improve and membership strengthen, but you will also reduce membership churn.
- Factors Beyond Your Control
While there are certainly are steps you can take to manage membership churn, the reality is some factors remain out of your control.
These can include: the economy, employment data, and inflation. There may even be factors locally that may impact membership churn. A large lay-off at a local or regional employer, for example. You may want to make note of these when tracking churn rate.
Conclusion
Even though membership churn and customer turnover are a normal aspect of organizations, associations, and businesses, they can still be a source of frustration. Even organizations with acceptable or low membership churn rates can view them as wasteful or even as a sign of failure.
The good news is, as we have learned, there are steps your organization can take in reducing membership churn. It is also important to note that there is technology available to assist in membership management and membership churn.
We encourage you to learn more at MemberClicks. Let’s connect members to your mission!
