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#MemberMonday: Measuring Retention (Retention as a Club Culture, Part 3)

By Brandi McGrath Kong, Director of Member Services & Conferences

One of the questions I get asked often is how to know what a club should be doing in terms of membership. My first question is always whether a club is looking to first focus on bringing in new members (recruitment) or keeping their current members (retention). The initial answer is almost always recruitment, but after a few clarifying questions, many clubs actually discover that they want to focus on retention first. But how do they arrive to that answer?

It all begins by acknowledging that no club can do everything all at once. We have to find a way to prioritize our goals, and I am a big believer that this begins by examining a club’s retention rate.

A retention rate is the percentage of members you keep over a given time period, often quarterly or annually. We choose this number because it best illustrates how effective our membership program is at keeping members. After all, our retention strategy must be strong or our recruitment efforts are essentially wasted.

Calculating Membership Retention:
[ (ME – NM) / MS ] x 100 = Retention %
ME: Members at end of current period 
NM: New members 
MS: Members at start of current period

This can seem a little confusing when the equation is in abstract, so let’s look at an example with actual numbers. 

Members at the end of the year: 950 (ME)
New members: 50 (NM)
Members at start of the year: 1000 (MS)
Retention Rate= [(950-50)/1000] x 100 = 90%

As a rule of thumb, 80% is a good benchmark to work from. Obviously, we want our retention rate to be much higher, but you don’t really get into the trouble zone until you dip below that number. If your retention rate is lower, then your membership efforts should start with retention first. 

As you can gather, a low retention rate indicates that there are likely some issues at play within your club. With a low retention rate, you are less able to guarantee that any new members you recruit will stick around.  It makes it that much more important for your membership committee to take action as soon as possible. We shared a few tips you help you get started in our last blog in the series and will share even more in an upcoming edition. Stay tuned!