Since we looked at how to approach acquiring suitable members for your organisation in our last blog, we’ll now turn our attention to retaining them and how analysing data can support this.
The first step is to ensure you understand your retention metrics – how many members lapse each month and what percentage is this of your overall file? Remember, some lapsing is to be expected but monitoring it will enable you to know if and where you have a bigger problem to address.
As mentioned in our previous blog, MemberWise has calculated the average member retention rate is 83%. Overall retention rates are important to measure but breaking these down may help reveal unseen issues with types of members. For example, if you’ve a strong and loyal membership base an overall retention metric might look favourable. But the strength of the base could be masking a high churn rate in newer members who aren’t fully engaged. While in the short-term this may be sustainable, it’ll build up issues in the long run because you’re not recruiting members of the future.
Another key aspect to realise is when members lapse. In addition to overall retention rate, it can be vitally important to understand whether there are specific times or parts of the journey when members tend to leave. Depending on the frequency of your renewal process, this could be within the first few months or at the first annual renewal. There could be several reasons driving members to lapse at a particular time – is there a point where they’ve accessed all the benefits? Or are the benefits no longer relevant to them? Simple analysis can show you where these pain points are, allowing you to intervene and find solutions.
The below chart shows where 30% of an organisation’s members were lost in the first few months (as many as in the following two years).
As well as timing, retention is often affected by the types of members recruited. As noted in our previous blog you recruit relevant people, they’re more likely to engage and stick around. However, you can still work to improve this. Delving deeper into your data can help you learn more about the people being retained (what you’re doing well) and, equally as important, those not being retained (what you’re not doing so well).
Identifying and profiling members that lapse may tell you about gaps in your services and offerings, i.e., what people aren’t getting from their membership. Looking at their activity and engagement over the year prior to lapsing may also give an indication of reasons for non-renewal. Comparing these against the behaviours of those that renew can direct you to interventions you can make to prevent losing members most at risk.
The key to retention is to engage and excite your members (the final blog in our series will cover this). The analysis described above can help you prioritise the types of engagement that will lead to future retention and longer tenure. As a rule of thumb, the more engaged members are, the longer they’re likely to stay.
This is certainly true in the fundraising sector, where we have repeatedly shown that supporters with the best retention (longest tenure and highest value) are those who engage with charities in more than one way. If supporters can be encouraged to donate via additional channels or products, volunteer and campaign for a cause and/or upgrade their regular gift, they’re more likely to continue engaging with a charity. This is sometimes seen even in the most tenuous of circumstances.
We’re often asked to analyse our clients’ upgrade campaigns because they’re concerned they may be causing increased attrition. In fact, we generally see the opposite – donors who upgrade have lower attrition. Even those who don’t upgrade often go on to have lower attrition than those who aren’t contacted at all (see the below chart). A phone call, if well-handled and not intrusive, can be seen as another form of engagement with a charity.
Data and analysis are also vital when testing new retention initiatives. Introducing another step in the member journey, e.g., a welcome call, may seem an obvious thing to do. But if you really want to know how effective it is you’ll need to run an A/B split test, where some members receive the call and others don’t. This sounds simple but it can be a complex data process to ensure the two samples aren’t biased, other factors aren’t put into the mix and an appropriate evaluation criterion is agreed and robustly measured. Data planning is key to avoid testing at enormous expense only to achieve inconclusive results.
Finally, this analytical testing rigour can also be applied to the renewal process to reveal insights about when and how it’s best to attempt reminding people of their upcoming renewals. This may vary and depend on the type of member but testing different approaches and analysing the outcomes can result in an increased renewal rate, or reduced costs, or both.
So, unlock your data, learn more about your members and how they behave, and let these insights help improve your retention rates.
Wood for Trees has helped many organisations gain a deeper understanding about their supporters through delivering and optimising valuable data and insight. Contact us here if you’d like to find out how we can help you discover the value you’re providing your membership base.
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