Thursday, June 25, 2009

High Membership Retention Rates Correlate with Growth

Posted by Princess Eva Angelica at 1:00 PM
In looking at our membership marketing survey data, the power of keeping members correlates with not only overall membership growth for an association, but also with the growth of new member input, which actually comes as a surprise to me.

Here is what I found.

As I noted yesterday, 47% of responding associations reported overall membership growth over the past year. And of those reporting growth, 77% had renewal rates of 80% or better.

While of the 36% who reported a drop in overall membership over the past year, only 55% reported renewal rates of 80% or better.

What is counter intuitive is that not only are higher renewing associations more likely to be seeing overall growth, but higher renewing associations are also more likely to be seeing a higher percentage increase in new member input. This is counter intuitive because typically new members renew at a lower rate than longer term members, so you might expect that groups adding more new members might see lower renewal rates.

Of the 54% of associations who reported a growth in new member input over the past year, 71% of them had renewal rates of 80% or better. While of the 22% who reported a decline in new member input, only 47% of them had renewal rates of 80% or better.

Overall, here is how associations reported their current renewal rates.

By the way, I do present these renewal rates with one major caveat. Comparing one association’s renewal rate to your association is not an exact science because each association operates in a different environment and uses different business rules to count a renewed member. So I am using this renewal data in a broad sense to highlight that renewal rates are correlated to both overall membership growth and even new member growth.

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