Association professionals are constantly working toward success for their organization and its members. Success can mean different things to different leaders, and for associations, one way to measure success is by keeping tabs on your lapse rate, also known as churn.
The lapse rate is the percentage of members that discontinue their membership over a given period of time.
This number is critical in year-to-year planning and operational decisions made on a day-to-day basis. Lapse rate often fluctuates during a calendar year, so running the numbers often is an important practice to stay up to date with your organization’s membership health. You work for your members every day, so check in and make sure it is paying off (more frequently than not!).
The lapse rate, or churn, for your organization, is a critical number in making plans, but it does not have to be hard to track. Pull up your recent membership numbers for a given time and plug them into this simple calculation:
Dropped Members ÷ Start Count
For example: In 2020, 175 out of 3,000 members did not renew. Plug it into the equation, 175 ÷ 3000 = .06 (dropped members ÷ # of members end of 2019).
Lapse Rate= 6%
Once you solve this number, you can put it to work for your association. This formula is based on annual renewals but can be adjusted for any period (monthly, quarterly, etc.). Keep up with it often and you will see what adjustments should be made to set your organization on a path to success.