In the world of membership organisations, particularly associations and peak bodies, there’s often a strong focus on attracting new members. While growth is always important, one of the most overlooked aspects of long-term success is retention. The hidden costs of losing members can far outweigh the expenses associated with acquiring new ones, making member retention one of the most profitable areas to invest in.
In this blog, we’ll explore why retention should be your number one priority, break down the hidden costs of poor retention, and explain how keeping existing members can be more beneficial to your organisation’s bottom line.
The Hidden Costs of Losing a Member
When a member leaves your organisation, it’s not just about losing their annual fees. The true cost of poor retention goes beyond the immediate loss of income. Here are a few of the often-overlooked consequences:
1. Acquisition Costs
Acquiring a new member is far more expensive than retaining an existing one. Whether it’s through marketing campaigns, events, or promotional offers, the resources required to attract a new member are substantial. These costs quickly add up, and if you’re constantly losing members at the same rate you’re gaining them, you may be stuck in an expensive cycle that yields little net growth.
2. Loss of Advocacy
Long-term members are more likely to become advocates for your organisation, promoting it to others and providing valuable word-of-mouth referrals. When a member leaves, you’re not just losing their fees—you’re also losing the potential value they bring through advocacy and network-building. High retention rates help foster a community of engaged members who contribute positively to the organisation's reputation.
3. Diminished Engagement
Members who stick around for the long term are often more engaged in your events, initiatives, and communications. These engaged members add value to your community, participate in discussions, volunteer, or even serve on boards or committees. Losing these engaged members can diminish the vibrancy of your organisation, making it less attractive to both existing and prospective members.
4. Increased Workload for Staff
Churn requires your staff to spend significant time and energy replacing lost members. This means more administrative work, more sales efforts, and more focus on recruitment instead of relationship-building with current members. Staff are better utilised focusing on deepening engagement with existing members than constantly needing to fill the gap left by departed members.
Retention is More Profitable Than Acquisition
It’s a well-known business principle that retaining existing customers (or members) is more cost-effective than acquiring new ones, and this holds especially true for membership organisations. Here’s why focusing on retention can boost your bottom line:
1. Members Become More Valuable Over Time
The longer a member stays with your organisation, the more value they tend to provide. This is not only through their annual fees but also through their increased engagement, participation in events, and potential leadership roles. Long-term members often bring higher lifetime value, contributing more to the organisation’s success than newer members.
2. Retained Members Lead to Organic Growth
Happy, long-term members are more likely to advocate for your organisation and refer others to join. This word-of-mouth marketing is incredibly valuable and comes at no additional cost. When you prioritise retention, you create a strong foundation of loyal members who actively help bring in new ones, reducing the need for expensive acquisition campaigns.
3. Improved Reputation and Stability
Membership churn can negatively impact the perception of your organisation. High retention rates, on the other hand, indicate that you’re delivering consistent value to your members, which improves your organisation’s reputation and builds trust in the community. This stability makes it easier to attract new members who are confident in the value of their membership.
Strategies for Improving Member Retention
Focusing on retention doesn’t just happen by chance—it requires a deliberate strategy. Here are a few key areas where you can enhance your retention efforts:
1. Deliver Consistent Value
Members leave when they don’t see the value in staying. Ensure that your organisation is continually offering relevant resources, events, and opportunities that align with members’ needs. Communicate this value clearly and often, showing members how they benefit from being part of the organisation.
2. Personalised Communication
Tailored, personalised communication makes members feel valued. Use your CRM system to segment your members based on interests, engagement levels, or tenure, and deliver targeted content that speaks directly to them. Recognising milestones, such as anniversaries or birthdays, can also foster a sense of connection and loyalty.
3. Engage Early and Often
New members are most likely to leave within the first year, so it’s important to engage them early and often. A strong onboarding process that welcomes new members, helps them navigate the benefits of their membership, and makes them feel part of the community can significantly boost retention rates.
4. Monitor and Respond to Member Feedback
Regularly surveying your members and paying attention to their concerns is crucial for improving retention. Act on feedback to address pain points or areas of dissatisfaction before members decide to leave. Engaged members who feel their voices are heard are more likely to stick around.
Conclusion
The cost of losing a member goes far beyond the immediate loss of fees—it includes acquisition costs, diminished advocacy, reduced engagement, and increased workloads for staff. By focusing on retention, your organisation can maximise the value of each member, foster a strong community, and ensure long-term sustainability.
Prioritising member retention isn’t just about holding onto existing members—it’s a smart business strategy that can save money, drive organic growth, and build a stable foundation for future success. Make retention your number one priority, and you’ll see the benefits across your organisation.