5-Step Guide to Calculating Your Member Retention Rate

Associations, Retention // Do you know how much value you’re providing members? Your member retention rate can help show you. Calculate it using these five easy steps. 

Beth Arritt
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No one likes to see member retention numbers go down. Unfortunately, it’s a concern that continues to plague many associations.   

According to the Membership Marketing Benchmark Report, most associations in 2021 (47%) saw overall membership decrease.  

That’s why determining your member retention rate is so important. It’s a quick way to see, on paper (or on screen), how you’re doing when it comes to retaining members. You’ll also be happy to know that calculating a member retention rate isn’t a task that can only be handled by the most brilliant math minds. 

The first thing you have to do is start working to better engage members so those numbers will go the direction you want them to. Get started by checking out the 2022 Engagement Trends report. 

Download the Engagement Trends Report 2022  

How to Calculate Your Member Retention Rate  

The magic formula: ((ME-MN)/MS) x 100  
ME = Members at the end of a time period 
MN = New members acquired during a time period 
MS = Members at the start of a time period 

Step #1: Select a Time Period 
Identify the specific time period you want to analyze. This could be the past year, the last six months, the quarter, or the past month. 

Step #2: Find Out How Many Members You Had At the End of that Period 
Take the number of members you had at the end of your selected time period and plug that number into the ME space in the formula.  

Step #3: Find Out How Many Members You Recruited 
How many new members were recruited during the time period you selected? You need to know this number because obviously new members shouldn’t be counted as retained members. You’ll plug this number into the MN space in the formula. 

Subtract your MN number (new members acquired during the period) from your ME number (members at the end of the period). 

Step #4: Check How Many Members You Had at the Beginning 
You need one more number, and that’s how many members you had at the start of the time period being analyzed. Plug that into the MS space in the formula, then take that answer you got from subtracting MN from ME and divide it by how many members you had at the start of your time period (MS). Great work! You’ve now got the answer to the ((ME-MN)/MS) part of the equation. 

Step #5: Run the Equation 
Now we just have to turn that number into a percentage, and you do that by multiplying it by 100. This final number you see is your member retention rate for the time period you chose to analyze. 

Let’s Run an Example 

Let’s say you want to analyze your member retention rate for one year.  
You started that year with 500 members.  
Over the course of that year, you picked up another 50 members and lost 20. 

ME (Members at the end of one year) = 500+50-20 = 530 
MN (Members acquired in one year) = 50 
MS (Members at the start of one year) = 500 

Now let’s plug those numbers into our formula: 
((530-50)/500) x 100 
(480/500) x 100 
0.96 x 100 

= 96%  

Your organization’s member retention rate for that year would be 96%. 

How Do You Know If Your Retention Rate is Good?  

Now that you have your retention rate, how are you supposed to know if you deserve a pat on the back or if there’s a serious problem that needs to be addressed? The answer is benchmarks. 

Related: The Top 6 Reasons Your Members Don’t Renew 

Your retention rate needs to be 100%. Just kidding. That would certainly be nice but there are plenty of factors that are outside of our control. Still, common sense tells us that the higher our retention rate number, the better. Your association will have its own goals and priorities, but for most industries, anything above 90% is considered a great retention rate. 

Here’s Why Retention Rate Matters 

If you’re going to go to the effort of calculating your retention rate, it might help to know why you’re doing it. We believe there are three main reasons. 

  1. Better retention means better ROI from your recruitment efforts. The hard part is convincing members to join. So, once you have them, you want to keep them. And the more engaged members are, the more they may contribute and spend both time and money with you.
  1. If members are sticking around, that means they’re probably happy. Those happy members can then be turned into MVPs who will promote your association to their non-member contacts. You’ll be leveraging your member retention to also impact your member acquisition goals. Plus, you can see how those members engaged with you to know what’s working for retention.
  1. Your retention rate is essentially your report card. It will show you how well you’re doing all the things necessary to keep members engaged and getting value from their membership. If you see your grade dropping, it’s time to focus on member experience and member value.

Related: SNMMI Rekindles and Sparks Recruitment Among Their Lapsed Member Base  

How to Improve Your Member Retention Rate   

Before you can start taking steps to improve, you have to know how you’re currently doing. That’s why the above formula is so useful.  

Associations retain members by improving member engagement and the overall member experience. Acquiring the tools that can help you scale to maintain strong engagement and strong relationships with every current member is a sound strategy for keeping them around.  

With software like online community or marketing automation, you start building out behavioral data that reveals to you which members are at risk of leaving. Once you’ve identified them, you can take personalized steps to remind them of the value your association provides, earn back their trust, and drive them to renewal.  

Download the Engagement Trends Report 2022  

Editor’s Note: This post was originally published in March 2014 by Joshua Paul. It has since been refreshed to provide you with the most up-to-date information. 

Beth Arritt

Association Strategist

Beth’s marketing experience encompasses more than twenty-five years of marketing strategy and member/customer engagement in various industries, including puzzles and games, training, education and aviation.

In addition to marketing, Beth has worked in event management and web development, wearing a variety of hats in different positions. She has also been an adjunct professor of marketing at Marymount University in Arlington, Virginia.

Beth received a Bachelor of Science degree in Merchandising from James Madison University, a Certificate in Event Management from The George Washington University, and a Masters of Business Administration/Marketing from the University of Phoenix. She has earned numerous awards for her marketing, including two Top Digital Marketer of the Year awards.

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