How To Reduce Your Membership Churn Rate

Membership Churn Rate: What It Is, Why It Matters, and How To Reduce It

Membership churn rate is an important KPI, but it is not always tracked or accounted for. People often look at more obvious metrics such as: 

  • Total number of subscribers
  • Number of new subscribers in a month
  • Which demographics do those subscribers belong to 
  • Where people come from (ads, organic search, affiliate links etc.)
  • Number of premium plans sold

Membership churn rate, however, can be a clear indicator of a business’s health.  If it is low, it signals steady growth and stability. If it is high, it could indicate a leak in your boat that needs to be plugged in as soon as possible. 

While you can never bring it down to 0, you definitely want to keep it as low as possible. The upside of its reduction is obvious. Those who are leaving are paying customers who are taking their money elsewhere. With members being the lifeblood of this type of website, the desire to keep as many as possible is absolutely understandable. 

So let’s try and understand subscription churn a little better by looking at how it’s calculated its possible causes, and a few solutions to bring it as low as it can go. Let’s jump right into it!  

Calculating Membership Churn Rate 

To calculate the membership churn rate all you have to do is apply this formula:

(number of subscribers that have left in a month) / (Number of total subscribers at the beginning of the month) x 100. 

So, following this formula, if you had 5000 subscribers last month and 300 of them canceled their subscriptions, you would get a membership churn rate of 6%, which is the average churn rate for subscription services

The opposite metric is the subscription retention rate. If we are using the same example, a membership churn rate of 6% would mean a subscription retention rate of 94%. 

causes for high membership churn rate

Possible Causes Of High Membership Churn Rate 

  • If churn happens right at the start, maybe you are not meeting their expectations (this could indicate a dissonance between reality and the image created in your customer’s mind through your marketing campaign). In that situation, you should restructure the messaging in your sales funnel to better align with what you are actually offering and temper expectations. 
  • If it happens later, perhaps you are not offering enough long-term value for them to stick around, or they aren’t seeing the expected results. If that is the case, you should look into how a “drip content” approach can keep members engaged long-term. 

In some situations, churn is unavoidable. Perhaps you have a course jam-packed with content and value that spans a couple of months, with no other content to offer after that. 

That is a viable business strategy. There are many types of membership websites out there, and as long as you know your unique characteristics of yours and how to market it, you shouldn’t ALWAYS let the high churn rate concern you too much. 

A Stellar Onboarding Sequence Will Stop The First Wave Of People From Leaving 

Good, intuitive UX design should cover this already, but it never hurts to have a great onboarding sequence to show everybody where all the tools and ingredients are in your kitchen. 

Be it straight in the user interface, through an email sequence, or in tutorials on your blog, an onboarding sequence serves to ease people into the intricacies of your product/service and show its true potential. 

It reassures them that they made a good purchase by giving them quick access to the features they were promised throughout the customer journey. You can also showcase more out-of-the-box use cases that provide users with new ideas for their own set-ups, adding value to their purchase and increasing their overall satisfaction with the product. 

Be Available For Your Members 

Members could run into a whole host of issues with your product/service:

  1. They can’t find a feature they had read about 
  2. Their payment got processed, but the website didn’t update with their upgraded plan
  3. The site isn’t loading
  4. They want to know if the platform supports integration with their favorite online tools
  5. They want to change their payment method and don’t know how

Any one of these issues, if left unresolved, will lead to frustration and, eventually, cancellation of their subscription. 

A support email or feedback form should always be available to users to report a problem or get a question answered as soon as possible. 

In time, you should take the issues that come up the most in these conversations and take measures to mitigate them in the future. For example, you could advertise an integration with a specific tool that you are constantly asked about. 

Don’t Let Cancellation Be Their Only Answer 

Sometimes a person isn’t dissatisfied with your platform or content. Sometimes they wish to maintain their membership but are simply unable to do so due to circumstances outside of their control. 

If they don’t have an alternative to outright cancellation, they will just go away, and it’s a lose-lose situation for everybody. 

Instead, you could provide other options: 

  • Down-sell – Taking away access to certain features, pieces of content, or services while maintaining the initial core value proposition of your website
  • Membership pause – Freezing their progress until they are able to return
  • Discounts – You could keep the member as an active part of the community by lowering the price of their subscription for a specific period of time

Final Words On Membership Churn Rate Reduction 

If you plan on getting below the average churn rate for membership sites and need a helping hand along the way, don’t hesitate to contact us right here

We have spent over a decade leveraging the best technology in the industry to improve the businesses of our clients time and time again. 

So reach out to us and we will schedule a call right away to discuss how we can help you reduce that bothersome membership churn rate and scale your business in the process!

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Vlad P. Marketing Specialist at Profitable Media, LLC

Vlad Popirda

MARKETING SPECIALIST

If you’ve been swayed, convinced, or otherwise persuaded by the writing on our page or in some of our emails, chances are Vlad was the man behind it.

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With a Bachelor’s in Marketing and a Master’s in Advertising, his life’s work is to leave this world better than he found it, and he aims to achieve that by putting his talents in the service of the right people and helping businesses make a difference in the world.

Outside of working hours, you may find him singing Britney Spears songs at karaoke nights, or exercising his creativity in varied ways, such as playing chess, designing board games, playing guitar, or playing Dungeons & Dragons with his mates.

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Alisa is the glue that brings all the parts of our operation together. The one always keeping an eye on the bigger picture. The person that makes sure that it all works smoothly and on schedule, giving everything an artistic spin and flourish with her keen eye for design.

With her background in sales, customer service and art, it’s no wonder her strength is in communicating with people, be they our customers or us, her team.

While juggling her different tasks (Project Management, Web Design, Quality Control, Customer Service), one thing never changes: she will use her artistic sense to make a project unique and she will hear out the person she is working with, understanding their needs and wishes while integrating and tying them all together to create an outstanding final product.

When she’s not tuned in to her work, you’ll find Alisa taking ordinary things and making them beautiful. In her artistic endeavors she explores many different mediums of expression, like painting, ceramics, dance, and cooking. Among these, her dancing stands out, as she is part of a salsa dance performance team, doing gigs both locally and nationally.

Her dream is to travel and explore different cultures, which she is always doing from home by cooking and trying out various cuisines from around the world.
Short Excerpt:
Alisa is the one that makes things work smoothly and on schedule, giving everything she does an artistic spin and flourish with her keen eye for design.

With her background in sales, customer service and art, it’s no wonder her strength is in communicating with people, be they our customers or us, her team.

Zach Warshawsky Chief Operations Officer at Profitable Media, LLC

Zach Warshawsky

CHIEF OPERATING OFFICER

Zach manages the operational side of our business and coordinates all the work done by our team. He designs technical architecture and always keeps an eye towards the future, making sure his solutions are scalable. He applies his skills in all sorts of fields, such as Project and Team Management, Sales Funnels, Web Technology, Split Testing, Automation and CRM.

If there’s one trait he shares with Henry, it’s passionate problem-solving. Although he has been working for over 25 years in Sales, Marketing, Management, Team Building and Customer Service, perhaps his relevant business credentials start even earlier. At 15, he started a business selling and installing car stereo systems before he even had a driver’s license. Armed with a reseller’s permit and a passion for business, he started down the path of entrepreneurship and hasn’t looked back since.

With four amazing children and a wonderful wife in his life, his goal is set: provide the best possible life for them that he can. To that end, he works hard on helping clients scale their businesses through the use of cutting edge digital marketing tools.

His weapon of choice on this quest is not a coincidence, for his knowledge of technology is certainly top-notch. This can sometimes be a blessing and a curse however, when the Apple Genius Bar can’t solve a friend’s problem, it’s Zach’s phone that gets lit up.

To unwind, he spends time with his children, goes on weekly dates with his wife and is passionate about crafting culinary art… he unwinds and loves creating amazing home-cooked meals for his friends and family!

Henry Hamamjy Chief Executive Officer at Profitable Media, LLC

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One of the two men that started it all, Henry has a knack for judging character and managing the internal structure of our team. The go-to guy for when business owners hit a roadblock, he is well known for offering unique, scalable solutions to any issue that presents itself. 

With a background in Sales, Marketing, Management, People Development and Leadership, he puts it all to good use in the service of his clients and fellow team members, helping them better themselves. 

He’s a born problem-solver, breaking any seemingly impossible task into achievable actionable items.  He has successfully helped dozens of businesses expand to the 7-8 figure level, by designing and implementing extensible, supportive and responsive infrastructure that his clients could then leverage to their fullest advantage. 

At work, he loves helping our customers make their dreams a reality, taking businesses to the next step of success, guiding them all the while. Outside of work, he enjoys a good meal with friends and a nice Napa Valley Cabernet Sauvignon. He also likes travelling with his family and exploring different cultures and finding out more about our world. Having dreamt of becoming a soccer player when he grew up, he has since traded that sport for another, namely golf, which he partakes in whenever he gets the chance.

Little known fact, he won the Atomic Spicy Food Competition when most of the people quit after just a couple of bites. Scientists have yet to come up with an explanation.