One of my least favorite questions on the ASAE listserver is when an association membership professional says something to the effect of: “My membership retention rate is 75%. How does that compare to your association?”
As I’ve written before, this question frustrates me because comparing retention rates, without context, provides absolutely no information as to whether 75% is good or bad. It is somewhat analogous to the question “My most recent mailing had a 3% response rate. Is that good or bad?”
Well, if you were giving away $500 gift certificates with no strings attached, then I’d say 3% is pretty bad. If you were selling $100,000 cars, I’d say 3% is pretty good. But again, without context, the 3% number is meaningless.
And so it goes with retention rates. Retention rates are important relative to your organization’s structure and needs. For example, one association I’m familiar with has nearly 100% retention. Why? Because every membership is a lifetime membership. That is, after the member joins and is accepted into membership, their membership is good for life.
Another association I’ve worked with has retention below 50%. Why? Because their primary benefit is for traveling college students, and once they leave college, they have little need for the membership.
Now, is the first association doing better than the second? And does knowing the first association’s retention rate help the second association at all? The answer, of course, is “no” to both questions.
Like most metrics within our association, the metrics are only important in context to our desired business objectives. In the case of the second association, if the objective is to expose as many college students to travel as possible, then having a high churn rate (i.e., a low retention) is not necessarily bad.
So before you ask “Is my retention rate good?” be sure you understand your business objectives. And be sure I’m not standing in the room with you.
Good point, Wes, but we’re all trained to look at “benchmarks” (I hate that word). How do you think associations can evaluate their retention rates?
I think their retention rates should be evaluated within the context of their own situation and their history. For example, at the National Association of College and University Business Officers, their retention among four-year colleges is nearly 100%. Obviously you can’t do much better than that (in that category) so if growth is necessary (it may not be) then they’ll have to look at other categories (or create new ones).
Also, the association’s mission needs to be taken into account. If the market we serve is served by dozens of other associations, then retention will likely be lower, but we also have to consider whether or not we should be trying to serve that whole market, if there are so many others providing similar services.
Wes,
I completely agree with you. Over time I have worked with a number of organizations who insist I work with ASAE to get them benchmarking information on retention rates or recruitment response rates or a myriad of other stats that are kept and available. I always suggest that benchmarking against “industry standards” really does not tell them much. What they really need to be concerned about is figuring out ways to do better than they are today. In figuring out how to do that they need to truly understand their members, their industry, etc. and the potential challenges that may limit their ability or inability to retain their members.
I do get looked at kind of sidewise some times when I say this as I think some BOD members and even association staff think it is a cop out when I say the key to good performance in retention is to always try to do better than you have done in the past.
I think this is the wrong debate. Member retention should be a secondary stat to monitor at best. If less and less of your org’s income comes from dues, and you shed a few mailbox members, who cares? What matters is how many people who previously were not engaged with your organization are now — and how many people who were engaged no longer do (and why).
I flesh the idea out better in a previous post of mine on Acronym.
I think we’re all in agreement here. It’s a rather nonsensical question. Kind of like asking your doctor “Well, how does my health compare to my neighbor’s?”