Improve Your Membership Retention By Reducing Your Member Churn Rate. New Members Cost Six Times More To Get Than Retaining Your Existing Members.
Membership site owners will tell you that member churn is a given. For every set of new members you acquire, old ones will leave. At what speed of turnover this happens is what you have to watch.
Why do members leave? Maybe because they no longer see value or results, or the costs and time they spend on your site don’t feel justifiable, or maybe it’s something as unstated as pent up grievances. Whatever the reason, after an initial honeymoon period, people will feel waning interest.
You need to monitor members whose activity level has dropped, and arm yourself with strong strategies for their retention – and your actions have to be prompt and customized.
At Solohacks Academy, we believe that membership site owners should also know the difference between members feeling “disinterested” or “uninterested”. Being disinterested is about not feeling vested in your site. Being uninterested is about not caring any more. Both feelings can be addressed, and members can be held back from leaving – if you try.
1. Ensure there is a real audience-fit with your membership site, or members won’t stay
A great deal of member-walk-away from your membership site can be because you may not have paid attention to correct member targeting before setting up your site. If you have a weak audience-fit to your membership site, why will members stay when your site is not what suits them at all?
To be always 100% sure you have the right site and the right audience, your homework should have covered three areas predominantly:
- Identifying your proper audience: Look hard at your niche and see if people you want to target are those who have problems or goals in that niche. This is your first task. Your second task is to make your site communication absolutely clear to audiences – who you are, why you do what you do, how you help your audiences, who you help, what content does your site offer for audiences, and what services you offer for your audiences.
- Focus your marketing efforts on benefits: Even if it’s tempting to list all the grand content fare you have on your membership site, without a clear articulation of the benefits of all this for your members, you give your members a hazy expectation as they enroll. Focus instead on the benefits – so that your members will always evaluate you not by the quantity of content you have, but by the benefits they get out of everything you offer.
- Segment your audiences, and then segment your content to match: There’s nothing worse than offering generalized content to a generalized stereotypical audience. You can’t expect every visit to your site to become a hide-and-seek session where people are spending all their time trying to locate what suits them, their preferences, their stage of growth, and their problems. A great membership site, where people stay on for years, is one where every segment of your membership is clearly defined, and has its own array of suitable content to learn from and grow with.
2. Understand the dynamics of “member churn” – why it happens, how to reduce it
Churn is an inevitable part of any subscription business. Memberships sites need to first accept this truth and then develop strategies to reduce churn – because to dream of completely stopping churn would be foolhardy.
There are three important things to know about member churn, to be able to handle it with smart strategies:
- Understand the impact of churn on your business profitability: What is churn exactly? It is defined as the “percentage of members you lose every month from your enrolled members”. Let’s say you have 100 members on your site, and lose 10% of your members every month. That would leave you with 90 members for the next month. Then 10% of those may go away, leaving you with 9 members less. If you want a profit, you have to find more new members than the numbers going away. And it costs 6 times more to find new members than to retain old ones from going away. That is the math.
- Aim to keep churn at below 5% of your average monthly membership levels: Membership site owners swear by the “5% or less churn rate rule”. They believe that if we can keep the churn rate at 5% or somewhere below that, we can somehow sustain our businesses. The costs of finding new members will be easier on our pockets, and the loss to your earnings from members going away can be bearable. In fact, the lower the churn percentage you maintain, the more profitability you can see from your business, despite the costs of getting new members.
- Churn can happen at all the levels of the member lifecycle, so be careful: Most marketers imagine that members may churn after they have been on your site for say a modicum of time. But that’s not how churn happens. There are five stages to the member lifecycle – The SignUp Stage, The Onboarding Stage, The Engagement Stage, The Flaking Stage, and the Renewed Interest Stage. At any of these stages, members can walk out. So don’t think they all have to wait to tire of your site before they go.
3. Keep pricing simple with easy payment options – don’t force long-term buy-ins
Complex pricing makes members leave. Your pricing has to be so simple that the number you’ve put against your tiers of membership are the only amounts customers need pay – and there are no add-ons.
There are three other keys factors to consider when deciding on pricing:
- Price your membership tiers after considering your business model: Depending on how you’ve chosen your business model, you need to consider the level of upfront prices you’ll charge versus the level of ongoing prices. You could look at the nearest online examples of other membership sites to decide on pricing benchmarks in the marketplace. Or you could look at the quality and quantity of your library and see if it can command premium prices. In general, it’s easier to charge on the higher side, and discount if demand is weak, than to do it the opposite way. It really tough to increase prices unless you’ve built a loyal franchise.
- Understand the concept of the anchor pricing in memberships: Often you’ll find that membership sites set extremely high prices for their topmost level of membership. The price actually would be prohibitive (even if they seem to offer a lot for it). But do these levels of memberships sell? No, they don’t. And neither does the entrepreneur care. These are “anchor prices”. “Anchor prices” help to signal to customers that even the lower-priced offerings of the site will be of a certain premium level. When you create your anchor offer, you set the expectation of quality in the mind of your customer. But you know that they will only buy your lower-priced membership.
- Realize that membership sites earn through volumes of customers: With membership sites, the volume of customers you have at any given time will determine your profitability. See what your average customer spends per month on membership. Decide your target revenue per month to cover all costs plus good profit. Divide your revenue target by your average spend per customer, to know how many customers you’ll need to hold per month. As I said, the math is simple. It’s the doing that’s the challenge.
4. Design your onboarding sequence with care, and nurture members into your site’s fold
Onboarding is the process of getting new members into your site’s embrace. It’s about how to make them feel welcome – and privileged to be part of such a good membership site as yours. It’s also about what steps to take to make life easy and smooth for a beginner on your site.
Three points to take care of during the onboarding sequence would be these:
- Design your onboarding to manage retention during the trial period: Most membership sites offer a trial period of 30 days or so, for members to decide whether they want to stay members beyond that period – or jump off after trial. Invariably, you may lose a lot of sign-ups within this tricky trial period, unless you are careful to see that you have some specific retention strategies that hold people back at this vulnerable stage.
- Send new members some genuinely helpful welcome emails: How many times have we received those “blah emails” that simply say “Welcome to our membership site. We hope you have a great time discovering what you want to know – go ahead, browse, and delight in finding what you need. We have so much on offer.” You’ll have your new member scratching his head, thinking, “Am I on my own here – to make those delightful discoveries? Show me what I need, or I’ll be asking for a refund!” This kind of welcome is not the way to do it.
- Help members locate where to start from using a diagnostic tool: You could build a simple quiz to help members see where their knowledge level is at on the topic of your niche. You could say, “If you scored between 0-5 points, you’re maybe a beginner and may find it useful to start with page “ABC” on our site. If you scored between 6-10 points, you’re probably advanced on our niche topic and could start from our page “XYZ” …” Make sure you start their journey with you with this quiz, and then give them links to their appropriate start pages.
5. Don’t leave members to roam your site meaninglessly – give them clear roadmaps
I can’t stress this point enough. When you array your content on your site, the wrong way would be to label content groups as Ebooks, Courses, Tools, Resources, or Webinars. People don’t need items classified by their formats. They would much rather you named “Goals or Destinations” – like “Greater Profitability Aids”, or “Work-Life Balance Aids”, or “Outsourcing Ideas”.
Here are three considerations to keep in mind when you want to retain members who prefer “roadmaps” instead of “product arrays”:
- Take members on journeys towards their problem-solutions or goal destinations: I remember how wonderful it was whenever I reached the Microsoft site, where I was met with a line that said, “Where would you like to go today? What would you like to achieve?”. We had to tick from some given boxes like “Learn more about cloud computing” or “Read case studies of small business success”. These boxes to tick gave us a good idea of what was in the Microsoft site … and the question clearly helped us fine-tune our desires within what they had on offer.
- Signpost your content with member journeys in mind, with bookmarking ability: Not only should you give pathways and roadmaps and facilitate member journeys to their goal destinations, but you also have to clearly signpost throughout the way. You have to enable people to set bookmarks so they can return to complete the journeys there were previously on. All this may call for some automation, but many membership plugins do give such features and functionalities out-of-the-box.
- Make members part of your community that can help them when you personally can’t: The minute members sign up with your membership site, make sure they also enroll in your community forum. This is the place where help is always there, via other friends they make who belong to their own time zones. You, the site owner, may be in America – and a member from India may be floundering without help. If he can get to your forum, he may find other kindred souls, from his own or nearby time zones, who can help him find what he wants on your site.
6. Check if your site always offers a pleasant experience for every member and every visit
There are some membership sites that feel daunting and overwhelming to members. The site creator’s idea of huge depth and breadth may not be what members are looking for. These days people look for “snackable content” – that means manageable content in bite-sized chunks. It also means they want content with which it feels like they are gaining ground fast, making quick wins.
If you are looking for some ways to make your site an exciting and interesting place to hang out, here are some ideas:
- Give your members an evergreen option of “quick wins”: What are “quick wins”? Well, quick wins are easy, cost-efficient ideas for any goal that members can implement quickly and see results from quickly. Whenever members see goals for which they have to “persevere over long periods to see results” they flake out faster. See that your site has a good balance of long and short term gains that members can aim for. That makes them feel like your site subscription is worth it.
- Break your content down into bite-size content chunks: Snackable content, as the name suggests, is content that is in the right bite-sized pieces for all the many formats or devices that a reader may read the content through – such as mobile-friendly or tablet-friendly content. But don’t make the mistake of thinking snackable “small content chunks” are any easier to create than long-form content. Snackable content creation has its own creative challenges and strategies. It’s a different game with different rules.
- Offer a time-zone friendly calendar of scheduled events: Hopefully, you will get members from all across the globe. If your membership site plans to host events or group sessions like webinars, masterminds, workshops, Q&A sessions, and so on, you have to be time-zone friendly. Make sure your scheduled events have at least three or four airings in a 24-hour period so those who are awake while others sleep can also attend these events.
7. Make yourself available and accessible – and monitor members’ activity levels
What are the two or three main priority tasks you have to do every day to retain a lot of members? You have to be visible, very hands-on, and involved with the site. members need to feel your physical presence often, come across you in the forums, and have access to you via quick email shots. They also need to know that your support-ticketing system will be escalated to you personally before petty grievances become big issues.
These three tasks below are critical to your membership retention, and they fall into your workload:
- Aim to retain members through a lot of overt personal involvement: A membership site owner I know learned all about the value of personal contact when she started and got only about 8-10 members. Since there were so few of them, she started personally contacting them every now and again by email, asking how they were getting along, and generally keeping up a conversation and a good rapport. Not one of them left. When her site grew bigger, she decided that capping her members on her rolls, and maintaining personal engagement, reduced her marketing costs on new member acquisition, and kept her income steady from her retained members. She was even able to raise prices without losing a single member.
- Continue to show up often on your site for people who joined because of you: If you, as the owner of your membership site, make infrequent visits to your own site, or treat it as a “passive income source”, your members will feel cheated. Many of them may have joined because you are at the heart of the business. I remember canceling a membership simply because the famous “queen of affiliate marketing” who owns it was a total no-show on the site – in all the three months I was a member.
- Keep track of member inactivity, and re-engage them before they descend into apathy: It’s very difficult to get back members after they’ve bolted. Keep an eye on every member’s level of activity. When members show growing disinterested you will notice less frequent visits to your site, long idle hours, and a general pall of inactivity. Such behavior clues should alert you. Often, just a bit of timely handholding can prevent a cooling-off member from slipping away.
8. Help members find it easy to upgrade, downgrade, pause and renew their memberships
Very often, members may leave because it’s very tough to downgrade membership when they are going through tough financial times. Make sure you give people the choice to stay rather than leave when their budgets don’t permit continuance at the current tier of membership.
Here are a few things to do when you sense members want to leave because of budget constraints:
- Show empathy and understanding that they have a financial situation: The first rule is to never make a member feels less cared for if his or her financial situation drops and the membership tier pricing becomes too much. When a member requests to cancel, ask if it’s a financial issue. If it is, show loads of empathy, and most importantly, give hope that things will soon turn around for the member. Say leaving is not the only option you have other financial solutions for the member. This sense of understanding and encouragement is key.
- Allow members to downgrade membership as easily as it is to upgrade: If a member would rather retain membership at a downgraded level than leave the site altogether, you should be immensely thankful. It should also be easy to downgrade. When members upgrade you never ask why, do you? Then why so many questions when someone wants to downgrade? Make it painless.
- Allow members to pause and re-activate subscriptions if they need: One of the features I’ve found most useful in membership sites is when they allow me to pause my membership during a difficult financial time, so I can get back to it when my finances improve. It’s wrong to interpret a request for pause as an indicator of a wish to leave. If people really wanted to leave they’d have canceled. They wouldn’t be writing to ask for a pause in the billing.
9. Keep showing members something they’ll miss if they leave – work the FOMO factor
Just like you monitor members for their level of engagement and activity, members too would be judging you for your levels of activity and inactivity. When they feel there’s not much more on your site to warrant continuing membership they may want to leave (and rightly so).
How can you keep members salivating for what’s upcoming on your site? Here are some ways:
- Share your “calendar of upcoming attractions” with your members: Most often membership site owners don’t share their upcoming events calendar with members because they haven’t planned what they’re going to add next to their sites. If you are prepared well ahead with a schedule of events and additions to your site, it would be a breeze to share this with members. There would be less temptation to leave when something interesting is showing up on the next 6-month calendar.
- Add a “progress log” where members can record their progress on your site: This is an interesting idea. If you can allow members to keep a log on your site of their progress, they’d be less inclined to leave, because it’s become their site as much as yours. People on diets and exercise programs, or who are learning new skills and notching up achievements, would like to keep a “diary of progress” on your site, and leaving you would lose them their diary.
- Provide deals on software, tools, and resources that they’d miss if they’d left: The “FOMO factor” is huge in the retention of memberships. FOMO stands for “Fear of Missing Out”. If you are making special price deals with tools and software manufacturers to offer these to members, you can get members to stay to avail of these exclusive offers. All this is possible if you are pro-active. “Retention” has to be on your mind all the time.
10. Ask why when members do leave, so you can sharpen retention tactics going forward
There are invaluable lessons to be learned from those who actually leave, despite your best efforts to retain them. Make it a point to ask people why they are leaving, so that you insure yourself against the same mistakes you made, and retain the remaining members. Don’t ever get affronted when members leave. Not all of them do so because they’re miffed with you. There may be other reasons.
Here’s how to get insights from leaving members, to prevent your other existing members from following suit:
- See if you can personally ask every leaving member for his or her reasons: Nothing beats the personal goodbye and a display of total understanding when a member wants to leave. There is a famous saying that goes, “If we cannot agree, let us, at any rate, agree to differ, but let us part as friends.” Make every parting pleasant by sending a personal email from you to the leaving member, saying you cherish the time spent together, and wish the member all the very best for the future.
- Automate an “exit survey” if you cannot contact leaving members personally: If the number of people leaving is high, you may not have the time or bandwidth for personal goodbye emails. Send an exit survey that says, “As our valued member, you know us well. Please tell us where we can improve going forward”. Ask for advice, feedback, and opinions. Show that you really care about every leaving member’s feelings, and about your self-improvement. Thank people who’ve left feedback.
- Ask for testimonials from those who are leaving (yes, ask for testimonials): I know it sounds counterintuitive to ask a leaving member for testimonials – but barring the ones who have gone off after a fight, the others would be happy to give you a glowing testimonial you can use. Most members also feel a sense of your pain when they leave. They’d like to do you a good turn, if they have learned something (even a little) from your site. Don’t think of all leaving members as “disgruntled and angry” human beings. Their reasons for leaving may not be about you at all.
So What Are Your Thoughts? Do Share!
This post is incomplete without your input. The community of Knowledge Commerce solopreneurs would feel galvanized to hear from you … so do share your thoughts on this topic with us, in the comments field below this post.
Related Articles From Our “Creating & Promoting Memberships For Knowledge Commerce: Guide”
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- How To Choose A Membership Model … 10 Smart Options
- How To Launch Your Membership Site … 10 No-Fail Tips
- How To Mix Your Membership Site Content … 10 Must Haves
- How To Price Your Membership Profitably … 10 Sound Methods
- How To Handle Customer Service In Memberships … 10 Savers
- How To Use Email Marketing For Memberships … 10 Best Tips
- How To Measure Membership Metrics … 10 Ideal Indicators
- How To Grow Successful Membership Sites … 10 Vital Traits