The level of Active Members over time is a function of the Joining inflow and the Leaving outflow. We should avail ourselves of all available levers. That includes asking ourselves how we might influence the rate and persuasiveness of member referrals as well as figuring out how to hold on to our members.
In this lesson, we’ll do the following:
- Define the Leaving outflow as Active Members divided by the average Membership Duration.
- See how decreasing the rate of outflow is equivalent to increasing the rate of inflow.
Reflection Questions
- What are the factors that drive member retention?
- What is the relationship between a long average membership duration and the rate of effective referrals?
- Under what conditions might the source of new members (i.e. advertising or word-of-mouth) influence member retention?
- When might some degree of membership churn be acceptable, even desirable?
