Growth through Membership Retention

Over the course of this month, I have been looking at five growth strategies. The first post on this was, October 12th, Five Growth Disciplines -- Introduced.

Today, I wanted to look at the growth strategy of keeping the growth that you have already earned or membership retention.

The retention rate obtained by an association in large part determines the ultimate level of membership for an association. For example, an association that adds 5,000 new members a year and maintains a 75% renewal rate will grow to 20,000 members. While an association that adds the same 5,000 new members but maintains an 85% renewal rate will grow to 33,000 members.

Better membership retention helps an association grow by lowering the number of new members that go toward making up for lost members and letting those new members contribute to membership growth.

So how do you increase renewal rate? I believe the key is through engaging or establishing interaction between your association and your members.

This interaction can be as simple as a phone call. In a presentation for ASAE and the Center that I did with Karen Gebhardt of the Aircraft Owners and Pilots Association (AOPA), we reported that their research showed members who called the association’s '800' number compared to those who did not had an improved retention rate.

Interaction can also be in the form of member transactions. In a data analytics study we did for an association, we found:

  • Members who also maintained membership in an optional local chapter along with their national membership were 17 percent more likely to renew than those who were not a member of a chapter.
  • Members who attended an association meeting in the past year were 19 percent more likely to renew than those who did not attend a meeting.
  • Members who attended an association meeting at any time in the past were 7% more likely to renew than those who never attended a meeting.
  • Members who attended four or more meetings were 30 percent more likely to renew than members who never attended a meeting.
  • Members who placed a product order in the past year were 28% more likely to renew than those who had not placed an order.
  • Members who upgraded their membership in the past year to a higher level of service were 12% more likely to renew.

The effectiveness of member engagement was further highlighted in ASAE and the Center’s Decision to Join (DTJ) study. DTJ found that “Those [members] who are not involved lie perilously close to former members in their overarching assessments of the value they derive from associations. If former members are thought of as being dead, the uninvolved are close to comatose.” (page 4)

In an upcoming post, I will look at techniques to engaging members in order to increase retention. Does this growth strategy sound like a good one for your association to use?

4 comments:

Kathy M said...

Tony - is there a "standard" for what is a "good" NPO retention rate? Our organization has been solidly at or above 80% for ten years, but a new board member feels it is "horrible that we're losing 19% a year!" We've always heard anecdotally that most non-profits would kill for 80% consistently, even thru a bad economy. What's your thoughts?

This has become an issue because, for the first time, we are NOT attracting sufficient NEW members to replace the attrition. We feel acquiring new members should be as much of a focus as "fixing" our "broken" renewals.

Thanks.

Tony Rossell said...

Hi Kathy -- Thanks for your comment and question. I actually did a post several years ago on this subject. It was entitled, No Good or Bad Renewal Rates. Here is the link:

http://membershipmarketing.blogspot.com/2007/11/no-good-or-bad-renewal-rates.html

My basic point was that it is hard to compare renewal rates between organizations because there are so many variables. What I recommend it that you monitor your own renewals and benchmark renewal improvement on a monthly basis using a membership dashboard.

There is a separate post on how to set up a dashboard.

Thanks again for your question. Tony

Xenia said...

Hi, I enjoy reading your blog and always come away with something new (or confirming that we ARE doing some things right!)

I am looking for the post re dashboards, been trying to show our ED that we need one that covers several areas. What month was that post?

Tony Rossell said...

Hi Xenia -- The post you are looking to find was on July 9, 2007. By the way, you can find for any word or topic on the blog by using the search tool in the top left hand corner of the blog.

Here is the link to the post you were looking for:

http://membershipmarketing.blogspot.com/2007/07/as-i-mentioned-on-friday-asae-center.html