Member Churn Can Kill Your Growth. Three Tips To Reduce Your Churn Rate
Churn, loosely defined, is the ratio of people who leave your membership roster over a period of time.
Why should you care about churn? Churn isn’t always applied to clubs, associations, and other membership organizations, but it should be. Your organization relies on the engagement of your members to give it life. If your members aren’t giving and getting value, if your members aren’t engaged in your organization, they’ll eventually end up dropping out. That’s churn.
How to calculate churn
To calculate churn, simply divide the number of members that you lost in a given period by the number of members that you had at the beginning of that period. So, for example, if you had 100 members at the beginning of last quarter, but then lost 3 members during the quarter, your churn rate for the quarter is 3/100, or 3%.
There’s a handy churn rate calculator at http://churn-rate.com
That doesn’t sound so bad? Put it another way: how many new members do you have to recruit to break even with your churn rate.
Back to our example, let’s extrapolate that churn rate out for an entire year: 3% per quarter translates to 12% for the year. That means that you have to attract and retain 12 new members each year just to break even! What if your organization has 1000 members? A 3% quarterly churn rate means that you’d have to recruit 120 new members each year just to maintain your membership numbers. Boy, does that put a damper on your recruitment achievement for the year!
Churn be a killer
If your churn rate is high enough, you’ll reach a point where you are losing more members than you’re gaining. Counting new members is great, but it can mask a greater problem. New members may be coming in the front door, but too many are exiting through the back! If your goal is to grow your organization, you have to find a way to reduce churn to manageable levels. You’ll never eliminate churn altogether (there will always be cases where a member legitimately has to leave), but you can put together a plan to reduce churn.
Strategies to reduce your churn rate
- Reach out to expiring memberships to remind them to renew.
- Encourage members to pay their dues via credit card, and set up automatic renewals via credit card.
- Find out why members are lapsing. Reach out to expired members. Ask them why they decided not to continue. You may discover a goldmine of information that you can use to improve your organization and engage members who might consider lapsing, just by asking “why”.
Paying attention to churn isn’t only for e-commerce or companies that sell products to customers. It can also be a great way to measure your organization’s overall health. A low churn rate means that your club or membership association is doing a good job, engaging your members, and giving and getting value with your members. A high churn rate can mean danger, and it means that you’ll have a harder job maintaining your membership database.
Keep that churn rate low, my friends!
