The Impact of a Membership Dues Increase on Renewal Rates

It has been my observation that the demand for membership renewals is fairly inelastic of price. In other words, a percentage increase in dues rates generally does not translate into an equal or greater percentage drop in renewals rates. The demand for the membership holds. At least up to a point.

Some data from our recent Membership Marketing Benchmarking Report supports this premise. For example, 82% of organizations that raised dues by between 1% and 10% reported renewal rates of 70% or better after the increase. Similarly, 83% of organizations that raised dues by between 11% and 20% also report renewal rates of 70% or better after the increase.

However, this pattern falls apart with dues increases over 21%. In this case, only 68% of organizations that raised dues by more than 21% reported renewal rates of 70% or better.

The chart below provides the data on percent of dues increase and renewal rates.


The bottom line -- based on the the aggregate data -- it appears if an organization can keep a dues increase to under 20% there will not be a drop in overall renewal rates. But going over a 20% dues increase may errode renewal numbers.

1 comment:

Anonymous said...

great!!!!!!!