The Subscription Management Conundrum: Member Retention or Acquisition?

Running a membership based organisation is no easy task, and neither is allocating resources when it comes to member acquisition and retention.

Your focus will change during the different stages in your development, but for ongoing growth, you’ll almost always need the number of members who leave your organisation to be less than the number of new arrivals.

When you start out, you’ll need to focus almost entirely on acquisition and getting new members signed up, which can be costly and time consuming, but essential. As you start to get people through the door though there will come a point when you start to shift your focus to retaining the members you’ve acquired.

In this post, we will have a brief look at subscription management for both acquisition and retention, and how to decide which is more important for your given circumstances.

Do You Know What Your ‘Critical Mass’ Is and Are You There Yet?

Only you know what the key number of members is that results in you making your desired revenue. Based on the value of each member, how many members do you need to reach your target revenue?

Once you have this figure, you can see whether your existing membership number is below or above your target. If you’re below the target number, are you continuing to move towards your target and in a reasonable time frame? If not, is it because you lose too many newly acquired members? Or is it because you aren’t acquiring enough new members?

Acquisition or Retention?

If you don’t seem to have a problem with acquisition but are losing a large number of members it may be time to focus your efforts on understanding why your members are dropping off. Then, you can start fixing the problems that are causing it.

On the other hand, if you’re only losing a small percentage of members but not adding significantly to your membership number, focusing on various elements of the acquisition process may be more important. This may require a careful look at your marketing and application processes to see where the weaknesses lie.

Cost

Ultimately, your acquisition and retention activities will be guided by the budget you have available.

If you’re able, it is worth your time to figure out what it costs to acquire a new member and what it costs to retain a member. Typically, the former is considerably more expensive. However, knowing precisely what those numbers are will empower you to make informed decisions, rather than just guessing.

Identifying Additional Opportunities

It’s widely agreed that it’s easier to sell to someone who’s already bought from you than it is to sell to a first time buyer. Therefore, it’s a good idea when looking at member retention to also consider what your opportunities are to increase revenue from existing members.

It may be that some of your drop-off rate is due to members’ needs not being met, and this ultimately may open the door to additional services you could offer. Or, you may be experiencing a low drop-off rate but are well positioned to provide further services to existing members. Offering multiple levels of membership would be a good example here.


It sounds obvious, but always remember that the number of people who are leaving your organisation must be less than the number of new arrivals.

Make sure you clearly define your growth goals and use the ideas we’ve talked about above to help you determine where to focus your resources without neglecting one area for another. If you follow these basic principles, you’ll find a balance that will help you be in a continual state of growth.

To swap your admin time for quality time, get in touch with LoveAdmin today by calling 01892 771 276 – we’d love to hear from you!

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