What can be Done to Increase Renewal Rates?

Only 30% of associations participating in the 2014 Membership Marketing Benchmarking Report said that they have increased renewal rates over the past year. And 27% of associations report that their renewal rates had declined.  Individual associations in particular saw average rates drop from 79% to 76%.

So with this discouraging news, what should associations do?  How can an association move from flat or declining renewals to better renewals? 

One solution is to learn from the behaviors of what the associations are doing that have seen an increase in retention.  And the great news about data is that we can look at the reported activities of respondents to the research to see correlations with groups that are seeing increased renewals.  These correlations do not necessarily mean that any single activity will automatically change outcomes.  However, when you see certain actions correspond with better renewals for some associations, it makes sense to investigate how these options might be used in your association and develop and test the solution and then implement what works.
 
From our research, here are four categories of actions an association might take that correlate with increasing renewal rates.

1.      Increased Member Usage – In many cases, when there was an increase reported in the attendance or purchasing of an association’s products and services there was also an increase in renewal rates over the baseline of 30%.  For example, 41% of the associations that reported an increase in attendance at professional development meetings saw an increase in renewal rates.   Similarly, 43% who reported an increase in book and directory purchases saw and increase in renewals and 37% who reported an increase in annual conference attendance saw an increase in renewals.

2.      Increased Membership Marketing Budgets – In most cases, when there was an increase reported in membership marketing budgets, there was also an increase in renewal rates over the 30% baseline.  For example, 50% of the associations that reported an increase in spending on renewals saw an increase in renewal rates.  Similarly, 44% who reported an increase in recruitment spending and 39% who reported an increase in on-boarding and engagement spending saw an increase in renewals.

3.      Increase Payment Options – Providing additional ways for members to pay also can help increase renewals.  For example, 44% of associations offering multi-year renewal options saw an increase in renewal rates along with 43% of associations offering and early bird renewal discount, and 41% of associations offering an automatic credit card renewal option.  Again, these are against a 30% baseline of associations reporting an increase in renewal rates. 

4.      Increase Renewal Activity – The tactical steps an organization takes to try to increase renewal rates also has an impact on the outcomes.  For example, 71% of associations that extend a grace period two months or more to allow members to renew have renewal rates over 80% compared to 50% of associations that limit the grace period.  Also, 69% of associations that include phone contacts as part of their renewal efforts have renewal rates over 80% compared to 44% of associations who do not use phone efforts.  And 66% of associations that use direct mail as part of their renewal efforts have renewal rates over 80% compared to 45% of associations who do not use direct mail. 
These findings are just a highlight from the results of our benchmarking research.  A full, printed report is scheduled to be distributed to survey participants in June. 

2 comments:

Gabe said...

I agree with all your points and would stress #1 as being the single biggest factor I find to increase membership retention. Conversely if interaction is dropping, it's a big red flag that your organization isn't adding enough value.

Tony Rossell said...

Hi Gabe -- Thank you for your comment. And I would agree, if interaction is in decline that is probably the first sign that membership problems may be ahead. Tony