How Do You Reduce Churn and Retain Members on a Membership Site?

How Do You Reduce Churn and Retain Members on a Membership Site?

Member churn erodes revenue. But too often, sites overlook churn until it’s too late. Proactive retention is vital.

This comprehensive guide covers proven strategies and tips to systematically reduce churn and retain engaged members for a growing, sustainable membership site. Let’s start with core churn concepts.

Running a membership site is a great way to build a loyal community and generate recurring revenue. However, one of the biggest challenges for membership site owners is reducing churn and retaining members. In this article, we will explore what churn is, what a good churn rate for membership sites is, and effective retention strategies to keep members engaged and subscribed.

What is churn?

Churn refers to the rate at which members leave or cancel their membership on a site. It is an important metric for membership site owners to monitor as it directly impacts the growth and sustainability of their business. High churn rates can indicate issues with attracting or retaining members, while low churn rates reflect a strong and engaged community.

Churn Basics

Some churn is inevitable. But minimizing preventable churn boosts growth. Understand key factors:

Churn Types

Voluntary churn involves members consciously cancelling, which thoughtful retention reduces. Involuntary churn from credit card expirations or downgrades requires other fixes.

Typical Benchmarks

Average churn rates among successful sites range from 5-7% monthly. Niche communities or high-touch services see lower churn. Monitor against competitors.

Revenue Impacts

Churn compounds exponentially over time. Just a 5% monthly churn means half of members cancel within 14 months. Small improvements have big revenue impact.

Common Reasons

Top voluntary reasons include perceived value gaps, integration issues, ignored communities, changing needs, financial changes, and lacking human connection.

Leading Indicators

Usage declines, support tickets, refund requests, community inactivity, and Downgrades often precede cancellations, presenting opportunities to intervene.

Risk Factors

Younger members, expired cards, missed onboarding steps, inactive social profiles, and engagement drops correlate to higher cancellation odds.

Understanding churn paves the way for prevention. Let’s now explore proactive retention strategies.

What is a good churn rate for membership sites?

A good churn rate for membership sites can vary depending on the industry and business model. However, on average, a churn rate of around 5% or lower is considered desirable. This means that out of a total number of members, only a small percentage cancel their membership within a given timeframe. To reduce churn and increase retention, it is essential to implement effective strategies and tactics.

Proactive Member Retention Strategies

Churn mitigation requires ongoing nurturing:

Onboard Effectively

Set proper expectations, build platform skills, establish satisfaction benchmarks, and reinforce early value to start strong.

Gather Regular Feedback

Rate satisfaction through quick polls and surveys. Uncover pain points, disappointments, and suggestions directly from members.

Monitor At-Risk Activity

Watch for activity declines, expired cards, support issues, and downgrade requests. Reach out via personalized campaigns.

Engage Through Community

Facilitate social connections and mentorships improving the member experience and sense of belonging.

Send Usage Reports

Share analytics on individual content consumption, progress, and achievements guiding members to untapped value.

Treat Members Like VIPs

Make members feel appreciated through perks, status designations, exclusives, direct access, and celebrations of milestones.

Offer Loyalty Discounts

Provide tenure-based loyalty rewards like pricing discounts, special member-only content and events, and free guest passes to hook longer commitments.

Automate Journeys

Personalize experiences by mapping common lifecycle phases into automated themes like 30-day tips or renewal reminder sequences.

Let’s augment reactive retention with preventative strategies.

Preventing Voluntary Member Churn

Satisfied members don’t leave. Reduce causes of dissatisfaction:

Set Proper Expectations

Be transparent about pricing, features, content breadth, community engagement levels, and required participation during sales and onboarding. No surprises.

Simplify Cancellations

Allow no-hassle cancellations while requesting feedback during offboarding surveys. Removing barriers to exit minimizes resentful churn.

Reduce Friction Constantly

Monitor platform analytics around engagement, popular content, searches, and feature adoption to continually refine and simplify experiences.

Maintain Consistent Value

Keep content, tools, and community experiences fresh, relevant, and evolving along member lifecycle and needs to sustain perceived value over time.

Facilitate Social Connections

Design experiences fostering camaraderie, mentorships, networking, and interactivity between members and with you directly. Humans crave connection.

Treat Members Like Individuals

Personalize messaging and content recommendations through segmentation and targeting using names, preferences, roles, and interests to feel valued.

Structure Payment Options

Provide installment plans or annual agreements with cancellation reminders to help economically challenged members ride out temporary hardship and stay committed.

Reward Loyalty

Offer exclusive rewards like price locks, bonuses, or special member designations for renewal milestones to recognize committed long-term members.

Let’s also tackle involuntary churn sources like failed payments.

Minimizing Involuntary Churn

Many cancellations stem from expired cards or billing problems. Reduce these causes:

Save Payment Details

Securely store member payment credentials with robust PCI compliance to continue automatic renewals without interruption.

Implement Retry Logic

Put declined transactions through automated retry logic for 2-3 attempts on subsequent days in case of temporary card issues before pausing access.

Send Payment Reminders

If first payment attempts fail, notify members via emails and in-app messages reminding to update details to avoid service interruptions.

Offer Payment Updates

Allow members to easily update new card details and payment methods online through self-service account dashboards before cutoffs.

Facilitate Card Updates

When issuing cards to existing members, seamlessly transfer payment details to new replacements automatically through tokenization and issuers.

Alert Approaching Expirations

Proactively warn members 60 and 30 days ahead of expiring cards on file along with easy links and instructions to provide new details.

Follow Up On Expired Cards

If payments fail after expiration, reach out via personalized email and phone to secure new details and minimize involuntary churn.

Spot sources of Declined Transactions

Analyze commonalities in declined payments like specific card types, banks, or cohorts. Research root causes like bank policies and technical issues.

Reducing failed payments retains members despite unavoidable card expirations and transitions. Let’s discuss evaluating churn rates.

Evaluating Membership Site Churn Rates

Not all churn is preventable. Assess trends across:

Overall Churn Rate

Measure overall net monthly churn across your entire member base. Breakdown rates by plan levels and member segments if differed.

Churn by Cohort

Analyze churn grouped by member cohorts starting in different months or years. Recent churn may be higher from newer members not fully onboarded.

New vs Renewing Churn

Compare cancellation rates between new members in free trial or introductory periods against established renewing members. Expect some short-term churn.

Churn by Acquisition Channel

Determine if members from certain acquisition sources – ads, referrals, organic traffic – have higher long-term retention rates pointing to qualified sources.

Community Engagement Impact

Correlate churn rates against activity metrics like posts, chats, helping other members to assess community bonds minimizing cancellations.

Churn Risk Factors

Review churn rates filtered by member attributes like persona, location, and usage frequency to identify higher-risk segments needing tailored retention initiatives.

Regular segmentation highlights problematic areas and audiences requiring specialized nurturing for sustainable growth. Let’s discuss strategies to win back cancelling members.

Winning Back Churning Members

Intercept cancelling members with tailored saves:

Send Exit Surveys

Request feedback on why they’re leaving through voluntary cancellation surveys. This points to fixable weaknesses.

Make Cancellation Difficult

Add additional confirmation steps when cancelling like requesting reasons, showing benefits lost, reviewing discounts, or offering to downgrade vs. fully cancel.

Offer Incentives to Stay

Provide special limited-time discounts, bonuses, or free months if the member agrees to continue their membership for a minimum period.

Suggest Up/Downgrades

Propose switching to lower-priced plans or temporarily pausing membership instead of fully cancelling if they cite financial challenges.

Solve Key Pain Points

If core needs changed, showcase newer relevant content, tools, or offerings added since initial signup that fill gaps.

Provide VIP Treatment

For long-term or high-value members, offer concierge onboarding assistance from founders, exclusive community access, or priority support.

Enable Easy Reactivation

Make it simple for past members to resume membership with prior credentials, content progress, and status rather than starting over through fresh signups.

Keep Engaging Post-Cancellation

Continue providing some value like content samples, limited community access, or promos after cancellation to maintain relationships for eventual reactivation.

Proactive win-back initiatives recover revenue from at-risk and departing members. Let’s wrap up with best practices.

Member Retention Best Practices

Some proven overarching principles for minimizing churn:

Obsess Over Customer Lifetime Value

Estimate member long-term value based on average tenure. Invest in initiatives proportional to potential recovered revenue from extended retention.

Continually Gather Feedback

Ask for ratings, reviews, and suggestions frequently across the customer journey. Quick pulse surveys on every core experience identify pain points.

Personalize Experiences

Treat members like individuals through personalized content recommendations, tailored messaging, and human support conversations.

Invest in Onboarding and Education

Set proper expectations upfront and guide members to realize the membership’s full value through robust onboarding, training, and community introductions.

Facilitate Community Connections

Design purposeful experiences for members to build personal bonds and support systems yielding higher satisfaction and renewal commitment.

Show Member Appreciation

Make members feel valued through exclusive perks and status, celebrations, promotions, free guest passes to share, and direct access to you and founders.

Automate Journeys

Orchestrate personalized, automated multi-channel nurturing sequences for common lifecycle phases using segmentation and behavioral triggers.

Continually Add Value

Tirelessly refine and enhance membership offerings, content, features, and experiences based on usage tracking, feedback, and community requests.

With a retention mindset, companies systematically reduce preventable churn through ongoing nurturing, connection, education, appreciation, and value enhancement.

Retention Strategies to Reduce Churn

1) Improve member onboarding

Member onboarding is the process of introducing and guiding new members into your membership site. It plays a crucial role in setting the tone for their experience and increasing the likelihood of them staying as long-term members. To improve member onboarding, provide clear instructions, tutorials, and resources to help them navigate the site and understand the benefits they will gain from being a member.

2) Be accessible to your members

Members may have questions, concerns, or feedback about their membership experience. It is important to be accessible and responsive to their needs. Create a support system that allows members to easily reach out to you, whether through email, chat, or a dedicated support portal. Timely and helpful responses can go a long way in building trust and loyalty among your members.

3) Pre-qualify leads and preframe your offering

Pre-qualifying leads and preframing your offering can help in aligning the expectations of prospective members with the benefits and value they will receive from joining your membership site. Clearly communicate the unique features, exclusive content, or community support they will have access to. This can help attract members who are genuinely interested in what you offer, resulting in higher retention rates.

4) Avoid overhyping or mis-selling your membership

Honesty and transparency are key when promoting and selling your membership. Avoid overhyping or misrepresenting the benefits or features of your membership. It may result in members feeling disappointed or misled, leading to higher rates of churn. Instead, focus on accurately showcasing the value that members will receive and the problems your membership can solve for them.

5) Create engaging content regularly

Consistently creating and delivering engaging content is vital for keeping members interested and active. Develop a content strategy that includes a mix of informative articles, videos, member-only resources, webinars, or live Q&A sessions. By providing valuable and exclusive content, you can encourage members to stay and actively participate in your community.

6) Provide alternatives to cancelling

Some members may consider cancelling their membership due to financial constraints or other reasons. To reduce churn, consider offering alternative options instead of an outright cancellation. This could include pausing memberships for a certain period, offering a lower-priced tier, providing exclusive discounts, or granting access to select resources even after cancellation. By providing alternatives, you may retain members who would have otherwise discontinued their membership.

Ways to Calculate Churn Rate

Calculating churn rate is essential for understanding the health of your membership site. There are different ways to calculate churn rate, but two common methods are:

1. Divide the number of members who cancelled their membership during a specific period by the total number of members at the beginning of that period. Multiply the result by 100 to get the churn rate as a percentage.

Churn rate = (Number of cancelled members / Total number of members) x 100

2. Calculate the monthly churn rate by dividing the number of members who cancelled their membership in a month by the average number of members during that month. multiply the result by 100.

Monthly churn rate = (Number of cancelled members / Average number of members) x 100

Strategies to Reduce Membership Churn

In addition to the retention strategies mentioned earlier, here are more strategies to help you reduce membership churn:

9) Add new content regularly

Keeping your membership fresh with new and relevant content is important for member retention. Regularly add new articles, videos, tutorials, or any other content that provides value to your members. This helps to maintain their interest and ensures that they continue to derive benefit from their membership.

10) Survey members for feedback

Regularly surveying your members for feedback is an effective way to identify areas for improvement and address any concerns or issues they may have. Ask for their input on the content they find most valuable, features they would like to see, or any challenges they face as members. Use the feedback to make informed decisions that enhance the membership experience and increase retention.

11) Implement gamification techniques

Gamification techniques can make the membership experience more interactive and engaging. Create challenges, quests, or achievements that members can unlock as they progress through their membership journey. This not only adds a sense of fun and accomplishment, but it also encourages members to stay and actively participate.

12) Give members completion certificates

Recognize and reward members for their accomplishments within your membership site by providing completion certificates. For example, if you offer courses or learning materials, you can award certificates upon completion. This small gesture adds value to the membership and motivates members to continue their involvement.

Tips for Boosting Membership Signups

In addition to reducing churn, it is equally important to focus on attracting new members. Here are tips for boosting membership signups:

13) Run limited-time promotions

Running limited-time promotions can create a sense of urgency and encourage potential members to join your membership site. Offer discounts, bonuses, or exclusive access during a specific period to entice them to take action and become part of your community.

14) Take your audience behind the scenes

Give your audience a glimpse into what goes on behind the scenes of your membership site. Share stories, testimonials, or examples of how your membership has benefitted existing members. This helps build trust and credibility, making it more likely for potential members to join.

15) Utilize Facebook retargeting

Facebook retargeting is a powerful tool for reaching potential members who have shown interest in your membership site. By placing a Facebook pixel on your site, you can target your ads to those who have visited your site but have not yet signed up. This allows you to remind them of the value they can gain by joining.

Importance of Understanding Membership Churn

Understanding membership churn is crucial for the long-term success of your membership site. By analyzing churn rates and identifying patterns or trends, you can make informed decisions to improve your offering and increase retention. Maintaining a healthy churn rate helps create a stable and thriving community of loyal members.

Identifying Warning Signs of Churn

To effectively reduce churn, it is important to be able to identify warning signs that a member may be at risk of cancelling their membership. Here are some common warning signs:

Low engagement

If a member is consistently inactive or not participating in your membership site, it may indicate a lack of interest or satisfaction. Reach out to these members and find ways to re-engage them.

Missing or late dues

Members who consistently miss or delay their membership dues may be indicating financial difficulties or waning interest. Implement communication strategies to remind and assist them in fulfilling their membership obligations.

Diminishing contributions

If a member was previously active in contributing to discussions, forums, or other community activities, and their participation decreases over time, it may signify a decline in their engagement. Encourage their contributions and address any challenges they may be facing.

Not using membership benefits

Members who are not taking advantage of the full range of benefits and resources offered by your membership site may be losing interest. Revisit your onboarding process and make sure members are aware of all the benefits available to them. Offer additional guidance or support to encourage them to explore and utilize these resources.

Tactics to Reduce Churn

In addition to the previously mentioned strategies, here are a few more tactics to help you reduce churn:

Focus on long-term engagement

Develop and implement initiatives that foster long-term engagement among your members. This could include hosting regular webinars, creating member-exclusive events, or facilitating peer-to-peer networking opportunities. The more connected members feel to the community, the more likely they are to stay.

Educate members about the value

Continuously remind and educate your members about the value they receive from being part of your membership site. Highlight success stories, testimonials, and tangible benefits to reinforce their decision to stay subscribed.

Offer incentives to stay

Offer incentives or rewards to members who have been loyal or who are considering cancelling their membership. This could include exclusive discounts, early access to new content, or additional bonuses. Incentives can make members feel appreciated and encourage them to continue their membership.

Regularly review and improve service processes

Regularly review your service processes to ensure that members have a seamless and positive experience. Collect feedback, address any issues promptly, and implement necessary improvements. By continuously enhancing your service, you can increase member satisfaction and mitigate reasons for cancellation.

Key Takeaways

Lowering churn sustains revenue. Key lessons:

• Monitor voluntary and involuntary churn types against benchmarks. Measure revenue impacts, common reasons, indicators, and risk factors.
• Retain members proactively via effective onboarding, regular feedback, monitoring at-risk activity, building community, sending usage reports, VIP treatment, and loyalty rewards.
• Prevent voluntary churn by setting expectations, easing cancellations, reducing friction, maintaining value, enabling connections, personalizing, structuring payments, and rewarding loyalty.
• Minimize involuntary churn through saved payment details, automated retry logic, payment reminders and alerts, expired card transfers, and targeted outreach.
• Evaluate overall churn, cohort churn, new vs renewing churn, channel churn, community impact, and risk factors associated with higher rates.
• Win back members by sending exit surveys, making cancelling difficult, offering incentives, suggesting downgrades, addressing pain points, providing VIP treatment, enabling easy reactivation, and continuing some engagement.
• Follow best practices like tracking lifetime value, gathering feedback, personalizing, investing in education, facilitating connections, appreciating members, automating journeys, and continually adding value.

Regular analysis, automation, and innovation keep members actively engaged over the long haul. Monitor churn obsessively and you gain a revenue lever to help build sustainability.

Reducing churn and retaining members are crucial aspects of running a successful membership site. By implementing effective strategies, providing ongoing value, and understanding the reasons behind churn, you can increase member satisfaction, loyalty, and ultimately, the long-term success of your membership site.

FAQ: How to Reduce Churn and Retain Members on a Membership Site

What is churn?

Churn refers to the rate at which members leave or cancel their membership on a site. It impacts the growth and sustainability of a membership site. High churn rates can indicate problems with member retention, while low churn rates reflect a strong and engaged community.

What is a good churn rate for membership sites?

A good churn rate for membership sites is generally around 5% or lower. This means that only a small percentage of members cancel their membership within a given timeframe.

What are the common reasons for member churn?

Common reasons for voluntary churn include perceived value gaps, integration issues, ignored communities, changing needs, financial changes, and lack of human connection. Involuntary churn often results from issues like credit card expirations or billing problems.

How can I reduce voluntary member churn?

• Set Proper Expectations: Be transparent about pricing, features, and required participation during sales and onboarding.
• Simplify Cancellations: Allow hassle-free cancellations while requesting feedback.
• Reduce Friction: Continually refine and simplify user experiences based on platform analytics.
• Maintain Consistent Value: Keep content, tools, and community experiences fresh and relevant.
• Facilitate Social Connections: Foster connections and interactions between members.
• Treat Members Like Individuals: Personalize messaging and content recommendations.
• Structure Payment Options: Provide installment plans or annual agreements.
• Reward Loyalty: Offer exclusive rewards for renewal milestones.

How can I reduce involuntary member churn?

• Save Payment Details: Securely store payment credentials to ensure automatic renewals.
• Implement Retry Logic: Automatically retry failed transactions.
• Send Payment Reminders: Notify members to update payment details before they expire.
• Facilitate Card Updates: Allow easy updating of payment methods.
• Alert Approaching Expirations: Warn members about expiring cards ahead of time.
• Follow Up on Expired Cards: Reach out to members with expired cards to secure new details.
• Spot Sources of Declined Transactions: Analyze declined payments for common causes.

How should I evaluate churn rates?

• Overall Churn Rate: Measure net monthly churn across the entire member base.
• Churn by Cohort: Analyze churn rates by member cohorts.
• New vs. Renewing Churn: Compare churn rates between new and renewing members.
• Churn by Acquisition Channel: Determine if certain acquisition sources have higher retention rates.
• Community Engagement Impact: Correlate churn rates with activity metrics.
• Churn Risk Factors: Identify higher-risk segments needing tailored retention initiatives.

What strategies can help win back churning members?

• Send Exit Surveys: Request feedback on why members are leaving.
• Make Cancellation Difficult: Add confirmation steps when cancelling.
• Offer Incentives to Stay: Provide discounts, bonuses, or free months to retain members.
• Suggest Up/Downgrades: Offer lower-priced plans or membership pauses.
• Solve Key Pain Points: Address core needs and showcase relevant content.
• Provide VIP Treatment: Offer exclusive support and access to long-term members.
• Enable Easy Reactivation: Simplify the process for past members to resume membership.
• Keep Engaging Post-Cancellation: Provide some value even after cancellation to maintain relationships.

What are some best practices for member retention?

• Obsess Over Customer Lifetime Value: Invest in initiatives proportional to potential recovered revenue.
• Continually Gather Feedback: Conduct quick pulse surveys on key experiences.
• Personalize Experiences: Treat members like individuals through segmentation and targeting.
• Invest in Onboarding and Education: Guide members to realize the membership’s full value.
• Facilitate Community Connections: Design experiences for building personal bonds and support systems.
• Show Member Appreciation: Offer exclusive perks, status designations, and direct access to founders.
• Automate Journeys: Orchestrate personalized, automated nurturing sequences.
• Continually Add Value: Enhance membership offerings based on feedback and usage tracking.

What are additional strategies to reduce membership churn?

• Add New Content Regularly: Keep the membership fresh with new and relevant content.
• Survey Members for Feedback: Regularly ask for input on content, features, and challenges.
• Implement Gamification Techniques: Create challenges and achievements for members.
• Give Members Completion Certificates: Recognize accomplishments with certificates.
• Run Limited-Time Promotions: Create urgency with discounts and exclusive offers.
• Take Your Audience Behind the Scenes: Build trust with stories and testimonials.
• Utilize Facebook Retargeting: Target ads to those who have shown interest but not yet signed up.