Membership Retention and Renewal Findings

Findings from the 2012 Membership Marketing Benchmarking Report show a pretty consistent theme when it comes to membership renewals – renew members early and often.

 • The average renewal rate for individual membership organizations this past year was 78% and the average renewal rate for trade or organizational memberships was 85%.
• The average first year member renewal rate for individual membership organizations this past year was 67% and the average first year renewal rate for trade or organizational memberships was 75%.
• Associations that offer an “early-renewal discount” were more likely to see an increase in renewal rates over the past year (24% to 19%).
• Associations that start their renewal efforts five months or more BEFORE expiration were more likely to see an increase in renewal rates over the past year (25.7% to 19.8%).
• Associations that have between 7 and 15 contacts in their renewal series were more likely to see their renewal rates increase over the past year (40.9% to 29.1%).
• Associations with first year member renewal rates below 60% were more likely to have seen their membership decline over the past year (29.4% to 18.3%).
• Associations that continue renewal efforts from at least three months after a member’s expiration date and up to continuous efforts are more likely to maintain renewal rates above 80% (80.2% to 69.4%).

I am often asked, based on these findings, how this research should be applied. My answer comes as both a warning and an encouragement.

Anyone reviewing this benchmarking data should be aware that because an activity or practice has a statistical correlation with better renewals or growing membership, I am not claiming that any single behavior in and of itself causes this outcome. There are literally thousands of variables that impact membership results. So I am reporting correlations and not claiming causation from any one behavior or statistic or finding.

Nevertheless, if as a membership marketer you see that organizations with certain behaviors or practices tend to be doing better, you at least will want to explore the issue and see if there is something that can be applied to your organization.

For example, from the data above, if you only have three contacts in your renewal series, reading that other groups have success with additional notices or early renewal offerings, may help direct you to what new renewal initiatives might be worthy of testing.

There is an ancient proverb that I like to quote. It says, "Without counsel plans fail, but with many advisers they succeed”. I view our benchmarking research as an opportunity to get advice from nearly 700 other membership organizations and learn from their activities and results. But ultimately, every organization has a unique set of opportunities and challenges that it must individually respond to in order to be successful.


8 comments:

Dale Paulson said...

Hi Tony,

It’s been a while since I contacted you and I want to say that I enjoy your blog. I’m particularly impressed by your article, “Membership Retention and Renewal Findings” and I linked it to my new website www.membership-renewal.com.

Dale

Dale Paulson, Ph.D.
Allegiance Research Group
Alexandria, VA
e-mail AllegianceResearch@gmail.com

Cathy B said...

Hi Tony,
I work as a recruiter for a University Women's Club. Our president says that it is natural for any club to lose 15% of it's membership each year. I would like to challenge her on that, but I can't seem to find any stats. Can you steer me in the right direction? Great article, by the way.
Cathy Burrell

Tony Rossell said...

Hi Cathy -- Thanks for the question. Our 2013 Benchmarking Report showed that the average renewal rate for individual membership organizations was 79%. However, 30% of respondents reported a renewal rate at 90% or better. So losing 15% of your members due to non-renewal (an 85% renewal rate) is better than average, but not in the top tier of membership organizations. Bottom line, there is not a "correct" renewal rate. You want to achieve the highest level that you can given your products, services, marketplace, and resources. I hope this helps.

Susie said...

I'm the alumni director for a university. Based on your report, do you classify university alumni associations as individual or organizational? At present, we have a 91.2% renewal rate. Thank you in advance for your reply.

Tony Rossell said...

Hi Susie -- Thank you for the question. We would view alumni associations as individual membership organizations. And congratulations on your excellent renewal rate. Tony

Beth Bush said...

Is there any data/research on abandonment rates? We are working on reducing our rate and I am curious if there are any benchmarks for membership associations.

Tony Rossell said...

Hi Beth -- By abandonment if you mean non-renewal, then yes, the just published 2016 Membership Marketing Benchmarking Report highlights the renewal rates for many types of associations. There is a link to download a copy on the home page of this blog. If, on the other hand, you a curious about online web abandons in the renewal process, I do not know of any data source specifically for associations. I do think that this is an important item to monitor. There is clearly a consumer expectation for fewer clicks, pages, and information to complete in any online transaction. The more steps there are and the more complicated, the more likely there will be for a site abandon.

Lauren S said...

What formula is the industry standard for calculating renewal rate? Is this what your above numbers are based on? Is it ((CE-CN)/CS)) x 100. With CE being the ending total number of members, CN the new members in the time period, and CS being the beginning number?

Thanks so much for your input. Its hard to compare renewal rates to other like organizations when some of them use different formulas to calculate