Member Acquisition vs Retention: What Is More Important?

Acquisition vs Retention

Member acquisition vs retention: What Is More Important? That’s a tricky question: both are important for long-term growth and sustainability. Let’s find the meaning of member retention and its benefits.

Many businesses devote most of their time and resources to recruiting new members. As a result, efforts to improve member retention are frequently neglected or put on the back burner. In reality, member retention provides a much higher return on advertising spend for specific association models and is usually more cost-effective than its counterpart.

What part of marketing should you concentrate on? First, let’s look at the specifics of member acquisition and retention to see if we can find an answer.

How much does it cost to retain a member?

1. Onboarding a new member can cost five times as much as keeping an old one.
2. Increasing member retention by 5% can boost profits by 25%-95%.
3. Selling to existing customers has a 60-70 % success rate, while pledging to new customers has a 5-20 % success rate.
4. A study found that loyal customers are more likely to repurchase, forgive, refer, and try new products by 4 to 6x.
5. Consumer switching costs American businesses $136.8 billion annually.
6. According to American Express, 33% of customers will consider switching companies after one bad experience.

We know from the data that customer retention and acquisition are equally crucial. Examine our findings to maximize your money’s return and learn how and where these strategies will work best.

What is Member Acquisition and Retention

Retention of members is crucial to creating a rich and robust association program. Your association can develop a program culture if loyal constituents participate in events and opportunities. On the other hand, member acquisition is how your organization gains new members over time.

This prospect appeals to many organizations because it expands, gains more exposure, and receives more incoming revenue in new membership dues. So, let’s compare and contrast member acquisition vs retention and how they might perform in terms of cost, organizational growth potential, and long-term benefits.

Concerning yearly revenue generation

Member Acquisition

Gaining new members will, by definition, expand your membership program. New members mean new revenue opportunities. Revenue and program size increases are more noticeable than member retention.

Some organizations refer to these short-term data increases as “vanity metrics”. While a high membership acquisition rate may impress stakeholders and the general public, membership benefits can be limited, mainly if no solid retention strategies exist.

Getting a large number of members quickly is not a guarantee of success. High churn and attrition rates may outweigh the advantages of a high acquisition rate.

If you’re dealing with high attrition and limited resources, boost employee engagement and communication.

We tend to focus only on replacing members who have left. However, if it affects your bottom line, you should prioritize it. It’s possible that this won’t solve your attrition problems and your acquisition efforts will be in vain. Instead, consider how member retention can help you reduce attrition, increase revenue, and expand your program.

Member Retention

While acquiring a membership provides immediate program and revenue benefits, maintaining membership is a “long game.” This strategy necessitates more patience, but the benefits are substantial.

Internal programs are methods for keeping members happy. They keep your members interested by providing e-learning and other exclusive benefits. In addition, internal programs can add value to your organization’s program and even generate new revenue streams.

A strong membership retention strategy can also help you attract new members. High member retention and engagement rates can help you establish a good reputation. Members will not only promote your program but also attract new members due to your public image.

People are more likely to join worthwhile programs, and member retention strategies such as online learning and engaging events will win them even before entering. Ultimately, this generates far more revenue than concentrating solely on acquisition.

As per Cost-Efficiency

Member Acquisition

Unfortunately, gaining new members necessitates a significant upfront investment with variable returns.

Finding new members necessitates multi-channel marketing campaigns that are targeted. And that’s to pique their interest; you still have to enroll them.

These acquisition strategies are complex because you have less data on prospective members than current members. As a result, recruiting new members is more challenging than keeping existing ones.

An effective online member acquisition strategy and member retention meaning is to create personas of potential members. Then, you can target specific demographics and social media platforms with content that previous members have enjoyed using these models. It’s challenging work, but it’s possible with the right marketing strategies.

Retention of Members

How much does it cost to retain a member? Money is also spent on member retention strategies. Your members must be involved in unique, personalized opportunities and events that keep them interested and ensure their dues are well spent.

The longer a member stays with your organization, the more data you’ll have to engage and retain effectively. With the right AMS software, you can automate personalized member messages, generate member data reports, and use a member directory to connect members with valuable opportunities.

Consider an email marketing campaign to understand the cost difference between member acquisition and retention. First, you’d have to track and identify new members and send them targeted email promotions to attract them. Then, you could use their data and your AMS system to automate current members’ email marketing process.

Keeping your existing customers is less expensive than continually acquiring new ones.

It’s easier and more profitable to keep the ones you have than to acquire new ones, whether donors, customers, or members.

The Future of Your Association

Member Acquisition

Your organization will benefit from new blood, new perspectives, and new ideas from new members.

Bringing in new members and generations of thinkers, leaders, and advocates can help your organization stay current and relevant. In addition, a healthy acquisition cycle can assist you in “future-proofing” your program.

While member acquisition is critical to your organization’s success, it is useless without a strong member retention strategy.

Membership Retention Rate

It’s essential to keep bringing in new members, but it’s irrelevant if they leave after a few due cycles. Furthermore, unhappy lapsed members may tell potential members about their bad experiences, undermining your outreach efforts.

On the other hand, member retention allows you to provide better service and build stronger relationships with your members. If you use the proper engagement and retention tools, you can create a digital member community that lasts for years.

While this may look difficult, the right membership platform can help with member retention and the management of your association.

The bottom line

For associations, member acquisition and retention are the core marketing processes. While new member acquisition is essential, your association’s overall financial, developmental, and organizational success should be built on a solid member retention strategy.

To that end, member retention means that every association should strive to balance its retention and acquisition strategies to grow, improve, and gain the loyalty of a diverse group of members.

These strategies differ in strengths and weaknesses, but you can achieve these vital association goals by investing in engagement strategies and LMS software solutions. Contact us today to learn more about association member acquisition vs retention.