Last month was really busy. I met with many organizations who are looking for help after a distressing 2009. And some of them do not realize just how much trouble they may be in going forward.
When I meet with groups, I use a simple method to calculate where their membership is headed given their current metrics. It is called a Steady State Analysis.
Using your current data, you can also do this analysis to see what the ultimate equilibrium of your association membership count will be. You can also use the analysis to model where it might be if you add more new members or have higher renewals.
To do the calculation, you only need two numbers; your renewal rate and your total new member input from the past year. Here is how it works. You take your new member input from the past year and divide it by your lapse rate presented as a decimal. So if your renewal rate is 80%, then your lapse rate is 20% or .20.
For example, 20,000 New Member Input / .25 Lapse Rate = 80,000 Steady State Total Membership.
Here is the formula: Annual New Member Input / Reciprocal of Renewal Rate (or Lapse Rate) Shown as a Decimal = Total Membership Steady State.
Here are three examples of how you can project your future membership.
• A 75% renewal rate and 8,000 new members per year will result in a steady state membership of 32,000 members
• An 85% renewal rate and 2,000 new members per year will result in a steady state membership of 13,333 members
• An 80% renewal rate with 5,000 new members per year will result in a steady state membership of 25,000 members
One other thought to consider. From my personal observation, the organizations that I am seeing in the most distress are those that pulled back from marketing this past year. Groups that continued to aggressively market membership actually came through the year in much better shape. This confirms some of the research that we shared at the start of this recession.
Showing posts with label Membership Benchmarking Dasboard Report. Show all posts
Showing posts with label Membership Benchmarking Dasboard Report. Show all posts
Benchmarking Your Membership Marketing Program
There are five key benchmarks for a membership program that should be captured each month and they can be presented on a single sheet of paper in what is called a “Membership Dashboard.”
Just like a car dashboard gives the driver the key data that’s needed to keep the car on the road moving forward in a safe manner, a membership dashboard highlights key statistics for an association.
The membership dashboard includes the key items that drive the growth or possible decline of an association’s membership. These will include:
- Total Membership
Current Membership
Membership the same month in the previous year
Percentage increase or decrease in year-to-year membership - New Members by MonthCurrent New Members
New Members the same month in the previous year - Membership Conversion (Renewal of First Year Members) by MonthFirst year members eligible to renew
First year members who actually do renew
Conversion renewal rates (renewing new members / eligible to renew new members) - Year Two and Subsequent Renewals (Y2+) by MonthY2+ members eligible to renew
Y2+ members who actually do renew
Y2+ renewal rates (renewing members / members eligible to renew) - Total Renewals by Month
Total members eligible to renew
Total members who actually do renew
Total renewal rates (see post from July 5th for assistance with calculating renewal rates)
Once a dashboard is in place, a wealth of information will jump off the page of each month’s report. For example, the dashboard will identify where membership is “leaking” members. Is it first-year members or multiyear members? And why is membership growing? Is it because new members’ input is up or because of increased renewal rates?
I have put together a sample dashboard that you can access with the link below or you can e-mail me for a clean Excel spreadsheet of the dashboard.
(Click here for a sample membership dashboard.)
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