Increasing Association Member Renewal and Retention Rates
Increasing member renewal rates is a common process among associations. It’s a basic function of the membership business model. However, calculating this can be difficult to do. Currently, associations face a trend of decreasing membership. Naturally, the reaction is to avoid increasing renewal rates out of fear that members will drop like flies.
This reaction is even stronger when considering first-year members. They may be the people most likely to walk away when associations raise the cost of membership. The problem is, in order for associations to thrive they must be able to increase the cost of a membership to reflect inflation.
Just like any other business, as costs increase on the business’ end, so must the cost to the consumer. It is an unfortunate but necessary function of associations. How can associations comfortably increase member renewal rates while minimizing the risk of members falling off?
Keep Increased Member Renewal Rates Under 20%
Studies have shown that a small increase in member renewal rates over time had little impact on member retention. Associatons Now interviewed the Membership Director of the National Association of Criminal Defense Lawyers (NACDL), Michael Connor. In regards to increasing member renewal rates, he said, “Being consistent with dues increases and keeping them modest can help an association financially. In the last five years, NACDL has increased dues annually, and retention has held steady at 82 percent.”
The NACDL isn’t the only association regularly increasing dues. In the 2018 Membership Marketing Benchmarking Report from Marketing General Incorporated, it was found that 75% of associations increased their dues last year 1-10%. Very few associations raised member renewal rates higher than 10%.
Base Member Renewal Rates on Industry and Competitive Climate
In other words, do your research! Learn about the industry your members are a part of and the membership options available to them. That is to say, having an understanding of your members and your competition will inform your decision regarding member renewal rates.
A few questions to consider answering:
- What is the industry outlook for your members?
- What’s the average member salary?
- Which valuable resources do you currently provide to members?
- Will new resources be available to members following increased dues?
- How are the average dues for associations similar to yours?
- What resources do they provide to members?
Answer these questions to decide whether increasing dues is a step in the right direction. As a result, associations that provide competitive services to members and can easily explain the increase in dues should see little to no decrease in member retention.
Analyze Member Retention Reports and Learn From Them
If your association is in a decent position to increase dues, start at the average increase of 3% and then analyze the data. How was your member retention following the dues increase? Did members seem displeased or confused by the increase?
If there was a decrease in member retention, was it because of the increase? Or was that the last straw? The data is all there. And the data says that most associations do not see a decrease in members after a 1-10% dues increase. So what’s going wrong?
The Top Reasons Members Don’t Renew Membership
There could be a few reasons (not related to increasing member renewal rates) which are causing a decrease in member retention. In the 2018 Membership Marketing Benchmarking Report, associations reported the top five reasons members did not renew.
See the reasons for why at least 20% of surveyed associations said their members did not renew:
- Lack of engagement with the organization (37%)
- Could not justify membership costs with any significant ROI (28%)
- Budget cuts/economic hardship of company (24%)
- Left the field, industry, or profession (24%)
- Lack of value (23%)
All of this must be considered when choosing to increase member dues. By focusing on the foundation of an association( the members), associations reduce the risk involved in increasing member renewal rates.
Be Transparent with Your Association Members
Moreover, make sure your members feel heard. Ensure that they really understand the reasons why your association is raising its dues. Avoid raising member renewal rates without letting members know three months in advance. Above all, explain to members what’s going on. Illustrate to them the rising cost of maintaining an association and the new benefits that will come with this increase. Create a clear pathway for open communication.
Send out an email to members openly giving out this information. Make sure you have association employees available for the next couple weeks to take calls from members. Transparency and communication are the keys to a smooth transition of increased dues.
Increasing member renewal rates. It’s what 75% of associations are reportedly doing! If you follow these guidelines, your association can increase dues and keep members happy. That is to say, be transparent and do your research! Using superior analytics offered by InLoop you can use the power of data to drive valuable insights for your next member renewal rates strategy.