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Effective URL: https://www.glueup.com/blog/membership-churn
Submission: On July 19 via api from SG — Scanned from DE
Effective URL: https://www.glueup.com/blog/membership-churn
Submission: On July 19 via api from SG — Scanned from DE
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HOW TO REDUCE MEMBERSHIP CHURN AND INCREASE RETENTION RATE? [A COMPREHENSIVE
GUIDE WITH CHURN RATE FORMULA, TIPS TO INCREASE MEMBERS’ RETENTION, AND FAQS]
Iqra Rai,
Content Writer
•
Jul 08, 2022
Share:
We know you might be concerned about your membership churn rate or your
retention plan failing to produce positive results in the industry. This problem
rears its ugly head more often than people would like.
The membership model is the cornerstone of most business models now and it has
gained immense popularity among small businesses due to its flexibility, ease of
implementation, and scalability.
However, it's essential to not just set up your membership program and sleep on
it but also ensure it’s working effectively for your business. This way, you can
take full advantage of its benefits like increased revenue, higher retention
rates, and more returning customers
This article will provide you with best practices on how to reduce churn and
increase retention rates. Now, without further ado, let’s get into it!
QUICK READS
* What is Membership Churn?
* Figure Out Why Churn is Happening
* Best Tactics to Reduce Membership Churn
* FAQs
WHAT IS MEMBERSHIP CHURN? DEFINITION & CALCULATION
It is the rate at which members leave your membership program or the number of
people who cancel their membership divided by the total number of members. The
lower your churn rate, the better you retain members and keep them engaged with
your brand.
HOW TO CALCULATE CHURN RATE?
The churn rate is the percentage of members who cancel their membership in a
given period. It can be calculated for a single month, quarter, or year.
CHURN RATE FORMULA
To calculate your membership churn rate, divide the number of members who left
in a period by the total number of members at the end. For example, if you have
100 members today and lose 20 over one month:
* The first step is determining how many people are with you that month by
subtracting your current membership from 100 (100-20=80).
* Then, divide this number by 80 to get an idea of how many people left your
organization during that month (15/80=0.19).
FIGURE OUT WHY CHURN IS HAPPENING
The second step to reducing churn is figuring out why it's happening. Here are a
few examples of the type of causes you'll want to look into:
* The onboarding phase wasn't engaging enough or didn't include enough
information (for example, the pricing information)
* Members had problems with their membership experience (for example, they
weren't sure how to get in touch with customer service)
* Members didn’t have clear instructions on how they could use your product or
service (for example, they didn't know how they were supposed to use your
webinar software or which features worked best)
Once you've determined what caused your members' churn, you'll be able to take
actionable steps toward improving recruitment and membership retention rates.
For example: If many members left because they felt that the onboarding process
was too long and repetitive, try breaking up the cycle into multiple steps so
that it doesn't feel quite as overwhelming at once. If member churn occurred
because of concerns about payment methods and billing procedures—maybe there's a
better way for them to handle these issues than having them call an 800 number?
LOW ENGAGEMENT
Low engagement can be another factor adding to an increased churn rate. It is a
measure of how a member interacts with your site. For instance, If you have an
e-commerce site, it could be the number of products purchased or searched
through. Engagement could be the number of videos watched or articles read for
an entertainment website.
You can calculate this engagement by dividing the number of activities by the
total members or visits. To involve your members more effectively, you need to
have some solid member engagement ideas.
You can do it by making your website more engaging for visitors if you provide
more valuable content (and opportunities to purchase from). Another option would
be to offer discounts and special offers to increase sales and create urgency in
customers’ minds, making them more likely to complete whatever action they were
considering before leaving.
MISSING OR LATE DUES
Sometimes, it’s as simple as that. Members may simply not be paying their dues
on time because they don’t see value in the community—or they may merely be
forgetful.
Use this opportunity to communicate the value of membership and how it helps you
accomplish your organization's mission. You want people who are passionate about
what you do, not just those who need an outlet for their free time or want a
discount on services (though those types of memberships can still work).
DIMINISHING CONTRIBUTIONS
A contributing member is a “good” member and will likely stay with your
organization for a long time. However, if you don’t encourage them to
contribute, they may not be contributing. It is particularly true if other
members of the organization aren’t encouraging them.
A good way to keep members involved and engaged in the organization is through
fundraising campaigns that allow them to give back in some way.
NOT TAKING ADVANTAGE OF MEMBERSHIP BENEFITS
Membership benefits, like rewards and discounts, are a great way to keep your
members engaged. They also help you stand out from competitors by offering
something no one else does. Using these benefits will increase your retention
rates.
Here’s what you need to do:
* Explain the benefit clearly and concisely on your website or mobile app. You
want members to understand how it works and how they can use it to get the
most value out of it.
* Make access easy—don’t make them jump through hoops just to get their
discount or reward coupon code!
* Make sure that whatever benefits you offer are relevant to your target
audience—you don't want them wasting their time with irrelevant offers or
coupons (and neither do they).
BEST TACTICS TO REDUCE MEMBERSHIP CHURN
Reduce churn by adding just these few simple tweaks to your strategy:
* Having solid member onboarding experience.
* Providing alternatives to canceling.
* Being accessible to your members.
* Bring existing members back to your site through email marketing and social
media or with discounts and special offers that require them to log in or
renew their membership.
* Reach out to potential leavers with automated emails asking why they are
considering leaving and then giving them an option for how they can stay a
member. It can be done using exit-intent popups or simply asking in an email
as part of the overall welcome email series you send out when someone joins
your community/network/club etc., but don’t forget the importance of personal
touch!
Want to learn more? Here we go.
HAVE A SOLID MEMBER ONBOARDING SEQUENCE
A robust member onboarding sequence is essential to your community's lifecycle.
It is the process of introducing new members to your community and making it
personalized based on their interests.
The first email you send them should be a gentle introduction to the community,
not a sales pitch. Make it clear that they are welcome here while also informing
them how to get involved if they want to be more active in the community and how
they can help others with their expertise when needed (as long as it’s
appropriate).
With GlueUp's robust and easy-to-use email marketing software, you can do just
that. It helps you build branded email campaigns, newsletters, and invitations
for events that you can send in just a few minutes.
PRE-FRAME YOUR OFFERINGS AND PRE-QUALIFY YOUR LEADS
If you’re using a membership model, you must understand the types of members who
are most likely to convert into paying clients. Before you even start marketing
your product/service, make sure that you have a clear idea of what type of
members you want to attract. You need to know what your target market looks like
so that you can create offers that will appeal to them.
Once you’ve identified your ideal member, it makes sense to pre-qualify leads
before they take their first step with you. By pre-screening leads, you can make
sure that they are the right ones qualified for membership. By avoiding people
who are not interested in your product or service at all, you can save time and
money.
PROVIDE ALTERNATIVES TO CANCELING
* One of the key ways to reduce member churn is by providing some alternatives
to canceling. There are many ways to go about doing this. One way is that you
can provide your customers with a way to get in contact with you and speak
with someone about their problems and fears about canceling your service.
This will allow them to feel like they have an alternative. They might not
want to do this at first, but if they feel like they have nowhere else to
turn, then it could be beneficial for them.
* You can just keep the lines of communication open by creating a help section
on your website. This allows people to see all the possible solutions that
you are trying to provide for them if they are facing an issue about being
able to cancel your service. These alternatives will give them more options
and help curb member churn in the process.
* If someone still wants to cancel their membership, ask what else you can do
for them instead and create a solution that works for both parties. It may
include offering another product or service that meets their needs in
exchange for keeping the membership active for another month or two. You may
also be able to offer lower pricing on additional products/services and waive
cancellation fees if they continue with the same level of membership during
this period.
MAKE YOURSELF AVAILABLE TO YOUR MEMBERS
Ensuring that your members are taken care of is vital for many reasons. First,
it will help you retain them and keep them from leaving. Having a way for them
to contact you anytime can also reduce voluntary churn because they won't feel
alone in their struggle with whatever issue they're having.
Finally, being accessible to your members will help with the growth rate because
they'll be more likely to recommend your business to others when they feel you
treat them right.
BRING EXISTING MEMBERS BACK
Once you get your existing members to engage with your site, there are many ways
to keep them returning.
* Send an email newsletter that highlights the benefits of membership and gives
an update on recent or upcoming events.
* Send a survey to see what members think about the organization, its programs,
and its staff.
* Ask for feedback about how the organization is doing and what it can do
better. For example: “What did you like about our last event?” or “How was
working with [name] at [company name]?” In addition to gathering good data on
member satisfaction levels (which should be shared with staff as well), this
information can be used by leaders to make adjustments to improve their
services over time—so they don't lose their members because they're not
providing what people want!
REACH OUT TO POTENTIAL LEAVERS
* Reach out to members who haven't renewed directly or through an automated
email campaign.
* Reach out to members who haven't logged in. You can send a welcome message
after they've signed up, but it's also helpful to reach out again later and
make sure they're still using the service and engaged with your community.
* Reach out to members who haven't posted in the forum. If someone hasn't
posted on the forum, send them an email asking why they haven't been
contributing as much as they used to. If there's nothing wrong with their
account or payment information, ask if there's anything else you can do for
them so that they'll return as active members of your community (make sure
you phrase it positively).
* Reach out when people update their profile information or payment method
information—they may want some help understanding how these features work!
CONSTANTLY REVIEW USER EXPERIENCE
User experience is the sum of all interactions a person has with a product and
this is what makes people stay or leave. In other words, it’s how you make them
feel about you with the value created by your product over time. So make sure to
frequently review your members' overall experience with your product or service,
including how easy it is to use and how helpful features are when they need them
most.
KEEP AN EYE ON THE COMPETITION
If you find that your competition is growing and expanding, that’s a good thing.
All you need is to stay on top of your game to continue leading the pack and
gaining market share.
You can learn from your competitors’ best practices, especially if they are
doing something differently than you are. Analyze the various ways they attract
new members or retain old ones, then adapt those ideas for use in your business
strategy.
UPDATE AND IMPROVE YOUR CONTENT
It's no secret that content is king and here's how to make it work for you.
* Update your content and make necessary improvements.
* Keep it fresh, relevant, and short to the point./li>
* Keep it oriented around your target audience.
* Use social media to promote it.
DON'T OVERPROMOTE
We’ve all been members of clubs, gyms, and other organizations that have been
the victims of salespeople who act like they are trying to sell us something. In
fact, it can be so annoying that we don't want to return to the same place
again.
If you want your members to come back, you need to consider how much you promote
yourself or your products. For example, when a member has questions about a
product or service, they come directly to us because they trust you with their
personal information (name, address, email, etc.) and know you will give them an
honest answer. However, if you become too pushy about selling yourselves or your
products, their trust will quickly disappear, causing them to leave without
saying goodbye!
If these things apply, you must remind yourself: Don't over-promote!
ASK FOR FEEDBACK AND LISTEN TO YOUR MEMBERS
It is crucial to ask your members for feedback and listen to what they have to
say. You must do this as an organization. It shows you are invested in your
experience with your company and brand. It will also help you improve the
quality of your products or services.
If all this isn't enough motivation for asking for feedback from members -
consider that many companies offer incentives to their users who take the time
out of their day (and lives) to provide constructive criticism about the things
they use daily!
REVIEW SERVICE PROCEDURES
The first step to reducing churn is to review your service procedures. Make sure
the process is clear, simple, and easy for customers to follow. Your goal should
be to make it as easy as possible for members to get the help they need with
their membership problems.
Remember, good customer service starts with a positive experience from the
moment a customer interacts with your organization—and continues throughout
their relationship with you. By ensuring every interaction is positive, you'll
be able to retain more members than ever!
HAVE A GOOD PROMOTION PLAN
Promotions are an essential part of your membership marketing strategy. They
should be relevant to your audience, in line with your brand, timely,
well-executed, and well-communicated. Effective promotions will also be
well-measured for ROI analysis so that you can optimize their profitability over
time.
KEEP MEMBERS ENGAGED
It is imperative to have a winning member engagement strategy to reduce churn.
Here's how to do it.
* Make it easy for them to share their experiences, thoughts, and ideas with
one another in a safe environment where they feel comfortable expressing
themselves.
* Use gamification. Add elements that make your app more fun and help them feel
like they're accomplishing something using it.
* Use social media. Offer special promotions through social media platforms to
encourage members to invite others on the platform to earn rewards or
freebies—and if possible, make these rewards tie into your core product or
service too! For instance, if you run an online marketplace for sellers who
want to sell handmade goods online, offer a discount on one of their items
when someone purchases through your platform. Make it an incentive for them
to invite others into the fold (and so that those new members can reap some
benefits themselves once they sign up).
* Send emails regularly with content explicitly tailored towards what each
subscriber would like most from whatever information is available at any
given time (for example, discounts off certain products sold through the
site). This way, everyone feels like what he wants most has been delivered!
HOW GLUEUP CAN HELP IN MEMBER ENGAGEMENT?
Having the right membership management software such as GlueUp is extremely
essential for member-based organizations. By automating all your processes, it
helps you develop meaningful relationships with your member community.
GlueUp is an all-in-one engagament management software that helps professional
communities retain and grow memberships. The top-notch features of GlueUp
include:
* Membership - Enroll new members easily with several membership types and
customized online application forms.
* Email Marketing - Create & send newsletters, branded events, and campaigns
with the email module in a few clicks.
* Event Management - Create amazing events and customize several types of
tickets.
* Community - It includes a private community where you and your members can
share virtual business cards and have 1-on-1 chats with each other.
* Analytics & CRM - Keep track of all your members' activities such as events,
emails, and finances.
All-in-all, Glue-Up provides your members with the premium experience they
deserve. Book a demo learn more.
ACCEPT FEEDBACK AND ACKNOWLEDGE IT
The following justify the effort involved in gathering and acknowledging
feedback.
* It's the right thing to do.
* It will help you improve your product.
* It will make you more trustworthy, so members are more likely to recommend
your service/product to others.
* It also helps improve the retention rate because if someone feels valued,
they're more likely to stay with a company or product than if they don't feel
valued (this is why people often refer back to their favorite customers when
making purchasing decisions).
REWARDS AND REFERRALS GO A LONG WAY
Rewards and referrals are potent motivators. It is valid for any business, but
particularly for subscription-based companies where subscribers pay a monthly or
annual fee. We’ve seen customers get excited about rewards such as discounts and
free trials – some even like receiving gifts they can use daily!
It also helps if you have an effective system in place to track referrals so
that you can reward your top referrers appropriately.
MAINTAIN A GOOD RELATIONSHIP WITH YOUR MEMBERS
One of the most important things you can do to reduce your churn rate is to
maintain a good relationship with your members. It means listening to them,
responding to their feedback, and acknowledging it.
If someone has a question about something you're doing or needs help with a
problem, make sure that you reply promptly and provide them with an answer. The
best way to build trust in your organization is by providing ways for members to
communicate directly with staff, so they feel their concerns are being heard and
addressed.
INVOLUNTARY CHURN RATE AND HOW TO REDUCE IT
Involuntary attrition rate (failed payments) is the percentage of members who
cannot make their membership payments due to billing failures or being declined.
There are a number of things that can cause it, so keep an eye on it. Your
involuntary churn rate will vary depending on your industry, but as a general
rule:
* Membership payments - watch for this type of involuntary churn if you're
operating in the service industry (e.g., gym, yoga studio, etc.) since these
types of businesses usually work on monthly membership plans where people
will pay for their services at the beginning of each month.
* Membership cancellations - look out for this type if you're operating in an
industry that requires a lot more flexibility from customers (e.g., cloud
storage). These industries have higher cancellation rates than others due to
changing needs/desires from customers over time or compatibility issues
between products/services offered by other companies. It may require
switching gears entirely when switching providers; consider offering annual
plans instead so users don't have to worry about paying every month!
* Membership expirations - keep tabs on how many expire each month because
it'll help determine whether or not there are any opportunities to increase
lifetime value among existing customers through cross-sells/upsells based on
those who haven't been using their accounts yet.
PRIORITIZE HUMANITY OVER TECHNOLOGY
Human-to-human interactions are more effective than automated ones. Remember,
empathy is key to understanding your members, and it is a sign of respect.
So it’s no surprise that when you show your members that you understand them on
a personal level, they are more likely to feel engaged and connected with you as
an organization. And when they feel like an organization respects them, they are
more likely to remain a member longer.
You can use this information by prioritizing human touchpoints over
technological solutions—the adage “people don’t care how much you know until
they know how much you care” applies here!
FOCUS ON LONG-TERM ENGAGEMENT
Long-term engagement is more critical than ever before. As the world becomes
increasingly digital, people are becoming more and more comfortable with a
flexible lifestyle, making it easier for them to switch between services and
solutions. To keep members engaged for a long time frame you need to focus on
providing value beyond their first interaction with your product or service.
The best way to do this is by focusing on what you offer—and how this can help
them achieve their goals. Whether they want to grow their business or increase
productivity in their workplace, getting results will make them want to stick
around longer.
In conclusion, it's important to remember that membership churn is a real
problem for your business and can be difficult to manage. However, using these
strategies, you can reduce it and increase retention rates in no time! Not only
that, but a membership site can absolutely skyrocket your success if done
correctly.
FAQS?
WHAT IS MEMBERSHIP CHURN?
It is the rate at which members leave a membership program and measures how
successful you are at retaining customers over time. In other words, it is the
percentage of customers who leave your organization in a given period of time.
WHAT IS A GOOD MEMBERSHIP CHURN RATE?
A good churn rate depends on what kind of organization it is. For example, It
should be around 5% if you own a gym or a fitness club. But it should be lower
if you are opening up a restaurant with high food costs and you might want to
limit your free trial offer to 3 days.
HOW IS MEMBERSHIP CHURN CALCULATED?
Membership churn can be calculated by dividing the number of members who left
the organization by the total number of members at the beginning of the period.
For example, if an organization has 1,000 members and 100 people leave during a
month, then its churn rate for that month would be 10%.
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