- Revenue Strategies
Lifetime Membership Boosts Revenue Beyond Dues
When it comes to welcoming new members to your association, it can be easy to focus on getting that first dues payment. But a smarter way to think about it is to consider the value over the entire lifetime of membership. This metric is called lifetime value (LTV).
How to Calculate Lifetime Value
The traditional formula you can use to calculate LTV is:
(dues + non-dues revenue) x average tenure = LTV
But truly understanding LTV isn’t quite that simple.
The Value of Participation
It can be tougher to put a dollar figure on some of the other ways members bring value to your organization. Consider participation. When members are engaged with your association, you bring more value to exhibitors at trade shows or events. When they read your publication and your ads lead to conversions, that ad space becomes more desirable to advertisers.
Engaged members may provide you with content for your magazine or website that you’d otherwise have to pay for. And just think about how much that could add up over years (or decades) of membership. If all goes well, your communications channels can either pay for themselves or even turn a profit for your association. So, there very well could be funds that are not being counted in your non-dues revenue.
Tracking Membership Retention
Your association should monitor membership metrics routinely. Some of the key metrics to watch include growth, retention, and segments.
Association Membership Growth
You likely are already pretty focused on this metric. And you probably already know that the
best way to attract new members is to understand their wants and needs, and offer member-exclusive opportunities and benefits that are relevant and meaningful.
Association Membership Retention
To retain existing members, you’ll need to continue meeting the needs of your members in innovative ways. When it comes to measuring retention, there are some different ways to break down your findings. Some things to look at are:
- Average membership tenure
- Membership types, or shifts in membership type
The more you can understand these specifics, the better you can make informed decisions about your membership offerings.
Association Membership Segments
By paying attention to the types of members that have spent the longest time with your association, you may be able to gain some insights as to who your audience is, and where the potential lies for recruiting new members.
Membership Relationships Are Invaluable
There are monetary reasons why membership retention pays off, but you can’t put a price on the rewards of long-term relationships with members. The longer a member is in your association, the more networking opportunities they’ll have. There will be more education opportunities, more information shared, and more chances to learn and grow together as an industry. The advantages this brings to future generations is invaluable and can only come from healthy, long-term memberships.
It’s important to maintain and update your member benefit offerings to keep your members happy and improve retention rates. For instance, do you frequently hear about how much members enjoy reading your publication? Maybe there’s a way to improve that offering through a redesign. Always be thinking of ways to improve.
Calculate your LTV and make informed decisions about retainment strategies. Keep track of all the numbers, but also take time to appreciate the loyal members you do have. And let them know just how much they mean to you!