Does the thought of having to calculate retention, churn, or the cost of acquiring a new member make your head hurt? For many association pros, crunching numbers is (unfortunately) a part of their daily grind. You don’t have to be a math person to use this easy-to-understand calculation to determine retention rates.
RETENTION RATE: (the percentage of members retained over a given period of time)
(End Count – New Members) ÷ Start Count = Retention Rate
Example: At the end of 2017 there were 3,000 members (start count). At the end of 2018, there were 2,750 members (end count), which included 75 new members and 175 members who did not renew.
- 2,750 – 75 = 2,675 (end count – new members)
- 2,675 ÷ 3,000 = .89 (end count ÷ start count)
Retention Rate = 89%
- The # of members should be calculated using # of billing accounts.
- The formulas below are based on annual renewals but can be adjusted to use for any time period (monthly, quarterly, etc.).
- Formulas using dues values are based on a traditional dues structure.
- Tiered dues should be calculated by levels and then plugged into formulas.