How to increase your member retention rate
Let's talk about one of the most challenging aspects of managing a growing community… member retention.
Member retention refers to a tactic that focuses on how many people have an active membership. The goal is to increase your member retention rate by continuing to provide a positive and rewarding experience for members, which in turn should increase engagement and loyalty, and decrease churn.
If you’ve got a group of members, either in your dedicated community space, or subscribing to your services, reducing churn should be top of mind.
Trust me, I’ve worked with 150+ course creators, entrepreneurs, and subject matter experts to help build and scale their communities and courses. Acquiring members, although important, is just the first step—retaining them long term is what sets your business up for success.
In this post, I’m tackling the five most common churn mistakes that I see communities making, and what you can do in order to reduce membership churn. At the end I also run through an easy way to calculate your member retention rate!
Solving membership churn
Churn refers to when a member cancels their subscription. This happens when they're no longer getting more value from your community or service than what they're paying for.
It's really a complicated issue to solve because it starts before a member even joins your community, and is tightly coupled with the experience they have while being a part of it.
💡Tip: As your community grows and your marketing systems are in place, you should start shifting your focus away from attracting new signups and put more time and attention into engaging and retaining members.
If you don't pay attention to member churn, you'll likely soon find that you have a leaky bucket. So although you keep adding new members in the top, roughly the same amount could be churning out the bottom, which means your community growth either stalls (active members stays the same), or you might even see a reduction!
When you think about churn at a high level, there are a few questions to ask yourself:
- How did your members find you, and how long have they known you?
- How are you positioning your offer, and the member value proposition?
- How does the value of the community line up with the member cost?
Now that we’ve gone through how to assess churn, let’s dive into some tactics to help increase membership retention! Make sure to keep these questions in mind as you continue on to the next section.
5 biggest member retention mistakes
Yep, mistakes happen. We all make them. And when it comes to membership retention, there are some very common issues to look out for.
1. Unclear value proposition
If it's not clear what members are signing up for, they're essentially taking a leap of faith.
Based on how you’ve promoted and described the community, what are members expecting to experience and gain access to once they subscribe?
As David Bekham says… be honest. How you position your community directly impacts member retention. Brag about what’s great, but make sure it fits with the reality!
You also want to be really clear about who the community is for, and what your ideal members look like. If you’re not, people will jump in and quickly realize that it’s not the right fit for them, which of course leads to member churn.
👀 Example: You’re positioning your community as a place for entrepreneurs to connect, share tactics, and learn together.
That’s all great! But is it a community for first time entrepreneurs, entrepreneurs who are under 100k in ARR, or entrepreneurs who are doing more than 10 million a year?
Those are very different types of people, at different levels in their journeys, with different mindsets, questions, and problems. You need to be very clear about exactly who your community or membership is for, and what they can expect to gain access to upon joining.
To summarize, you’ll want to clearly answer these questions:
- What is the outcome upon joining your community or membership?
- What is the problem that you're solving?
- Who are you solving it for, and how long might it take to reach that end goal?
2. Lack of sufficient onboarding
Onboarding is so, so important. Truly, it cannot be overlooked.
Having worked with many community builders, often I find that there’s either:
- Not enough onboarding content, and generally not enough time and effort spent on member onboarding.
- Or in some cases, there’s actually too much in place, which can make things overwhelming for new members, dulling that initial excitement upon joining.
💡Tip: Setup a dedicated onboarding space in your community that is very thorough, and goes step by step answering each of these questions about your community/membership and the software it’s hosted on. Even better if the onboarding process includes quick points so members can easily skim through, and video content to add a more personal touch.
When you're onboarding someone into your community, there are two key pieces that you need to keep in mind:
- You need to educate them about how your community/membership works. Where do people go to get help? When are the live calls? Upon joining, what do they need to do first, second, third? What are the expectations around timelines, effort, and support? All of these things are crucial for people to understand how they can be a successful member of your community, and get the outcome that they've signed up for.
- They need to understand how to best use the technology/platform that your membership is hosted on. Where do they go to engage? What are the different spaces in your community? How do they manage their notifications so that they only get notified about things that they really care about? And so on.
Having a successful member onboarding strategy in place ensures new joiners are fully educated and excited about your program. They'll understand how everything works, and be ready to dive in.
Also, make sure to include the very first thing you want new members to do! For example, introducing themselves in a channel.
3. No finger on the pulse
Often what this means is you don't really know why people join your community. So when they churn, inevitably, you don't really know why they left.
It’s a lot of unknowns, and you're not learning much from the experience.
💡Tip: Implement both intake and outtake forms. Ideally the intake form lives inside of your onboarding experience when people join so that you can learn more about them. And when people leave, during the offboarding process to learn what you could have done better/differently.
In the member onboarding form, ask questions like:
- Why did you join?
- What problems do you have related to (community purpose)?
- What are you hoping to get out of this experience?
- What does success look like for you?
These answers will help you better understand your members, and in turn fuel you with ideas for future content, courses, and more.
On the flip side, you should implement a similar tactic for members who cancel, with the goal of figuring out why they’re leaving (and how you might be able to reduce community churn).
In the member churn form, ask questions like:
- Was something missing?
- What could we have done differently to make you stay?
- Did you understand how the program/community/membership worked?
- Do you have any feedback for us?
Maybe they just weren't the right fit, and that’s okay. But for those who are a fit, leverage these insights to help adjust your messaging, positioning, and marketing to better serve the right type of audience.
4. Wrong pricing model
If you have a paid community membership, you’ll need to ensure that the cost fits the value.
When someone becomes a member, how much value is being created for them? How does that line up with how much they’re being charged? You need to make sure they’re getting more value than what they’re paying for.
🔥 Hot Take: Monthly subscription plans are not necessarily the right pricing model for every community.
In fact, for transformation based communities, coaching programs, and courses, I typically don’t recommend going with a monthly subscription because every 30 days you are essentially asking members if they’re getting the value yet. Over, and over again.
For transformations that are difficult—and take a long time and effort—there's likely no way that members are getting more value in the first 30 days than what they're paying for.
For transformational communities, I recommend setting the pricing based on two things:
- The value of the transformation
- The length of the transformation
That might mean switching to an annual subscription where you're getting someone to decide up front that they are committed to solving this problem/challenge. People also get sick, busy, and go on vacation. So having a longer subscription timeline, or even offering a one-time-fee, gives people that flexibility.
The gist is: really think through your pricing model, and make sure that the value aligns with the cost.
5. No member re-engagement plan
When members go silent, they're ghosting—they're not really there anymore. Inactive members are way more likely to churn, especially if they're on a monthly subscription.
This is why having a member re-engagement plan is so important!
💡Tip: You're always going to have an 80/20 principle going on—likely 80% of people in your community will be passive, while 20% will be active. People are able to get value even if they're not showing up all of the time. But the more quiet they are, and the less they log-in, the more likely they are to churn.
There are a few things you can do to increase member engagement:
- Regular member check-ins. These can be monthly, or quarterly. In Circle, you can set up workflows in your community that allow you to automatically DM people when they hit a certain threshold. Maybe you're even doing a survey, but you're recognizing that there are people who aren't posting. Aren't showing up to cause now. This is also somewhat normal behavior.
- Dig into the data. You can use activity scores in your platform, then filter so you can find the people specifically who are not posting, or not logging in. You can send just them a DM and say, “Hey, notice you haven't been around for a while. What can I do? Is there anything I can help you with? Are we missing something that you really need?” You want to just start a conversation.
Having the right tool to set you up for success is key here. If you’re looking for a robust membership platform that can help you track engagement, run engaging events, setup custom paywalls, and much more, try Circle!
How to calculate member retention rate
There are a few ways to calculate member retention rate, but since simple is often best, this is the formula I suggest: ((ME-MN)/MS) x 100
Here’s what all of those acronyms mean:
- 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
Follow these steps to calculate your member retention rate:
- Decide on a timeframe for the measurement. Depending on your community, it might make sense to do monthly, quarterly, or yearly.
- At the end of that timeframe, how many members did you have (ME)?
- During that timeframe, how many members did you recruit/add (MN)?
- Finally, how many members did you have at the start of the timeframe (MS)?
- Now, run the formula: ((ME-MN)/MS) x 100
Some of the top communities have a 90%+ retention rate, but this isn’t a copy paste benchmark. It really depends on the type and purpose of your community! For example, say your community is about dealing with grief. It’s possible that the average member takes 9-12 months to go through this transformation, and may no longer need your community after that timeframe.
Conclusion
Churn is inevitable—all members have a lifecycle.
The day you sign up a new member is the first day you start losing them. No one will stick around forever, but from a business standpoint, you want them to stay as long as possible.
The good news? You can do a ton of things to reduce churn—hopefully implementing some of the proven member retention strategies in this article can help!
If you want to learn more about reducing churn, check out our free Community Engagement Crash Course.
For more insights like this, I recommend reading Circle’s 2024 Community Benchmark Report! It’s chock full of insights for community builders and professional creators.
