When will churn derail your membership site?

You’re running a membership site, and the Churn Monster, sneaky beast that he is, is trying kill your site - and unless you know your magic plateau number, you won’t see it coming. And no, he doesn’t look like this:

Churn Monster

Seriously, if you don’t do more to influence your churn rate, eventually it’s either going to kill your site, or at the very least, severely limit your growth. Even if you’re adding a significant number of new members each month, eventually you’ll reach the plateau where churn equals new signups.

A simplified example:

Say you’ve got 1,000 members, a churn rate of 7%, and are adding 80 new members a month. That means after one month, you’ve netted 10 members (70 cancelled due to 7% churn, and 80 added). That’s ok, but pretty soon your growth trickles down to almost nothing. By month 13, you’re only netting 5 new members a month, and you’ll max out at 1,143 total members:

(1,143 * .93) + 80 = 1,143

However, if you’re able to push that churn rate down to 5% instead of 7%, the math looks dramatically different. In month one, you net 30 new members, and you end up maxing out at 1,600 members. Better yet, get it down to 3%, and you top out at 2,667 members. How much more profitable would your site be if you cut your churn rate in half in 2017? Go ahead, plug your site’s numbers into that equation and get a grip on what this is costing you.

Now, all this is assuming your rate of acquisition doesn’t change. Of course you should be trying to increase your traffic, conversion rate, etc., but this should at least show the critical nature, and limiting factor, of churn.

Now, what can you do to lower that churn rate? So glad you asked. There are some fantastic articles out there on how to reduce churn. I won’t attempt to reinvent the wheel; here’s one of my favorites. I believe the question we need to be asking first though is, which members, exactly, are getting ready to jump ship? Once you’re armed with accurate information about who your least engaged members are, you can target them as an individual and unleash the biggest and brightest retention tools and tactics. The converse of this of course, is the ability to pinpoint your most engaged members and targeting them for upsells.

If this leaves you wishing you had a way to automatically measure engagement and not having to dig through individual user profiles (if your platform even tracks that) to see how much your members are actually engaging with your site, you're in the right place! MemberScore does the tedious, boring work for you, so you can focus on running your business and growing your community.