Membership Retention

What is membership retention?

Membership retention is the measure of how many of your members keep their membership active. It is a critical component of the membership model, because it describes how you keep your members from canceling their subscriptions, and how you ensure they find sufficient value in the services that you’re offering.

What is a membership retention rate?

Membership retention rate is the measure of membership retention over time. In other words, it’s how many members stay in your membership versus how many members cancel their membership.

The membership retention rate is formatted as a percentage. In an ideal world, all membership retention rates would be at 100%—but unsurprisingly, that’s not always possible. A more doable target is above 75%.

Why is membership retention important?

Membership retention is important because it measures whether you’re delivering the results and transformation your people are looking for. It’s an important tool for A. assessing how much value members are finding in their ongoing membership, and B. gaining insights on how to create added value for members, and how to scale your membership in the future. Membership models thrive when members feel like they’ve fostered genuine, lasting connections with each other, and driving retention fosters more opportunities for those connections to occur.

How do you calculate membership retention rate?

The membership rate can be calculated by picking two dates over a given time period, finding out how many members were signed up on the start and end dates, the amount of members that have joined during this time, then comparing change over time. The basic formula is ((ME-MN)/MS) x 100.

You need to know how many members you had on the start date (MS) and how many members were present at the end date for the comparison (ME). You’ll also want to know the total number of members who joined up during this period (MN).

One example: Say you started the year with 800 members and you ended with 1,200. During the year, you gained 550 followers and lost 150. Using ((ME-MN)/MS) x 100 as a template, your formula is ((1200-550)/800) x 100. That works out to a membership retention rate of 81.5%.