Membership renewals are the lifeblood of every membership-based business.
Keeping high renewal rates is no easy feat, but there are effective ways to make sure your members keep using your services long after they’ve signed up.
In this blog post, we’ll be discussing the importance of membership renewals and share some useful tips to help you increase subscription renewal rates.
Why Do Membership Renewals Matter?
Renewal rates are one of the most important metrics you can measure in a membership-based business.
These metrics show how many of your clients opt to renew their membership to your services. They are valuable because they directly reveal predictable revenue gain or loss.
Having high renewal rates means your business is doing an outstanding job at keeping customers and can count on them for revenue in the future.
A major benefit of high renewal rates is that they reveal the quality and value of your services.
If many of your clients choose to renew their membership each month, that means your service is critically important to them.
Therefore, you should track your renewal rates to get a better understanding of the quality of your service.
Renewal rates also determine the attrition rates of your clients.
The attrition rate is the percentage of clients that choose not to renew their membership or subscription to your service. Those rates are important because they show the average lifespan of your customers.
For example, if a business has a 90% renewal rate, it means its attrition rate is 10%.
If you divide 100% with your attrition rate (10%), you’ll get 10, which is the average lifespan of your clients in years.
For business leaders and managers, tracking renewal rates is an absolute must.
High renewal rates should be your priority because they reveal predictable revenue gain, average customer lifespan, and service quality insights.
Tips for Increasing Your Subscription Renewal Rates
Here are our top tips for increasing your subscription revenue rates. The membership management advice we’re giving is useful for all stages of membership because you should work on membership renewal strategies the moment somebody signs up for your service.
Welcome New Members in Style
Welcoming new members to your membership service is incredibly important, so do it with style.
When you make an effort to create a memorable onboarding experience, you give your new members confidence in the quality of your service.
They will feel welcome and motivated to collaborate with you, so great onboarding will make sure they don’t leave your service in the vital early days.
That experience gives you an opportunity to engage with new members immediately after they subscribe and provide them with instructions for their initial action steps.
You can warmly welcome new members with emails, video tours, and step-by-step guides.
By offering clear answers to questions about your service, you make sure your members are well-informed from the start.
If a client doesn’t use their membership often, they won’t pay for it for very long. You need to shape their membership habits as early as possible so using your service becomes a part of their routine.
Try these tips on new members:
- Ask them to introduce themselves to the community.
- Give them a highly specific content recommendation.
- Get them to set up a profile quickly.
- Give a 10 minute 1-on-1 call.
If you provide them an impressive welcome, your new members will feel like bona fide community members from the start.
They’ll be excited to get the ball rolling.
Engage Members on Social Media
When you engage with members often, you create a sense of community around your business. Social media helps you do that.
It allows your clients to interact both with you and each other. These relationships will make them want to stay connected and renew their membership each month.
Using social media also gives you a chance to share important updates about the company with new members.
You should use your social media platforms to provide your members with company news, useful tips, and an inside view of the company. Chris Ducker from Youpreneur does a great job engaging his members on social media.
Keeping them well informed is vital for members to get the most out of their membership.
Don’t be shy to engage with members on social media at any time during their membership. Furthermore, achieving high engagement gives you a chance to upsell their membership plan.
When you use social media to involve your members in the goings-on around your company, you can showcase new services for higher membership tiers and increase your revenue.
In this case, you have to take your audience’s preferences into account.
For instance, if your research shows most of your members are active on Instagram, you should use that platform’s key features, such as Instastories and hashtags, to communicate with them and drive engagement.
Social media is a vital asset for building a community, engaging members, and maintaining renewals.
If you want to drive membership renewals, you will need a strong social media presence.
Support Communication With Members
As a membership provider, it is vitally important that you maintain frequent communication with members within your community, especially if problems arise.
Accessible support and communication have a direct impact on user satisfaction and the wellbeing of your business.
When members have an issue, you need to be available to talk to them and resolve the issue right away.
If you’re not at your users’ disposal the moment they require help, they have little or no reason to renew their membership.
Moreover, your openness encourages members to discuss issues that are important to them.
When they openly discuss important issues, you also get critical info on what you need to improve about your service. You need as much feedback from your members as possible to improve your service.
Create multiple dedicated communication channels, so your communication with members is on point. According to a study by Microsoft, 66% of consumers have used at least 3 different communication channels to contact customer service.
Another 58% of consumers will sever ties with a company if their communication and customer service is lacking.
Being responsive and enabling members to communicate with you or with each other can only benefit your business. By frequently keeping in touch, you’ll foster a strong relationship with your members and they’ll feel confident about your ability to resolve issues fast. Such an approach clears the way for creating lasting relationships and builds trust.
Show People How They Benefit From Being a Member
When you show people how they benefit from a membership, you directly support the renewals.
This means you actively demonstrate what makes your service valuable and what it does to help members achieve their goals. Here’s how a SaaS company Outreach does it.
You can demonstrate membership value by showcasing the following benefits:
- Webinars
- Member discounts
- Certifications
- Opportunities that arise from a membership
You can highlight these benefits through engaging content.
Having to show the pros of signing up for your service compels you to make the best content you can. To be successful at this, your content must be useful, non-generic, and frequently updated.
It will keep your members engaged and remind them of the value of your service.
Showing the benefits of your membership also gives you a chance to test new strategies.
Since you’re showing values, you have a shot for field-testing some advantages of your service and using them to form a new strategy.
If one specific aspect of your service proves to be the most beneficial to users, try expanding it.
For example, if the ability to attend a particular webinar is a perk of holding membership, and it turns out to be a member-favorite, organize more webinars like that one to attract new users—and highlight these events in your marketing!
Showcasing value and benefits has a substantial impact on renewal rates and you shouldn’t miss out on an opportunity to remind your members of that.
Set KPIs to Identify Members at Churn Risk for Targeted Renewal Offers
If you want to re-engage members and reduce attrition rates, you must set up KPIs that enable you to identify members that are likely to cancel your service.
Setting KPIs is necessary for developing a strategy for stopping members from canceling your service.
When you track these data points, you identify members using your services less frequently, which allows you to predict when they will cancel with more accuracy.
This is critical because it gives you an idea of how much time you have to act and allows you to offer them something to re-engage such members.
Monitoring KPIs for churn gives you a better understanding of why low engagement occurs.
Members can disengage from your services for many reasons, so understanding their motivation is critical for changing that.
Every service has churn risks.
When you frequently track your KPIs, you can study churn risks specific to your service, identify what’s lacking in your service or in the way you communicate with members.
You can also identify churn risks you might have not been aware of and reinforce your re-engagement strategy.
Some KPIs you should start tracking are:
- Member engagement
- Member lifetime value
- Trial retention
- Frequency of membership use
- Website traffic and activity
To stop members from churning and identifying them for targeted renewal offers, start tracking KPIs and pay attention to details.
Prepare a Renewal Reminder Email
A renewal reminder email is a critically important practice that helps you support membership renewals.
Sending renewal reminders is your shot at pulling back members that were slipping away.
A well-thought and excellently timed email can make all the difference between a loyal member and one who escapes.
In your messages, it’s important to sound confident, but not pushy.
Reminder emails are a very cost-efficient method for supporting membership renewals. They require little time to deploy because of email automation.
After setting up a template, time automation to 30 or 15 days before the membership expires, or set it on the expiration date, depending on the specifics of your membership service.
Templates for renewal emails are amazing for maintaining membership renewals. They help you assemble reminder emails fast and work hand in hand with email automation.
Make sure you measure the success rate of your renewal email templates and adjust them if they have little results.
A renewal reminder template could look like this:
How you manage your reminder emails can have a direct impact on membership renewals, so take it seriously.
Use Automation to Make Renewing Memberships Easy
Streamlined or automated membership renewals are great for increasing renewal rates and you should make them a part of your renewal process.
Using an automated approach at renewals is critical for reducing member cancellations.
If the process isn’t automated or streamlined properly, renewing membership will feel like a chore.
Your members will miss renewal dates and, if they chose to, only become members again weeks after their membership has expired.
You can prevent that from happening with an automated renewal solution.
When you apply membership management solutions, you also reduce your expenses in the long run.
As your organization or business grows, member management can become costly and hard to maintain.
However, when you know what to look for in management software you can pick a solution that works best for you and spare you a lot of effort and save your resources.
Streamlined membership renewal also helps you collect dues the moment a membership expires.
Because it sets the solution up in advance, you can count on the membership fee being collected on a specific date.
This increases your cash flow because there are no delays in payments.
A survey by Capterra has found that the use of membership management software has a big impact on engagement rates and membership satisfaction.
A reported 63% of all users used their membership management software for email automation.
If you want to make membership renewals easy and smooth, automate them and secure high renewal rates.
Offer Renewal Incentives and Cancellation Alternatives
You can get lapsed members back on track and increase the number of renewals by offering the right renewal incentives and cancellation alternatives.
Renewal incentives are vital contingencies for engaging members who are about to quit your membership.
With the right incentive, even the most reluctant members will keep using your service.
Incentives can be everything from physical gifts for continuing their membership to convenient renewal plans, with monthly or quarterly payment options.
It’s common that users cancel subscriptions or memberships because they don’t use the service enough. If that’s the case, try offering them a limited membership option that covers fewer units, benefits, or lessons.
Downgrading to a lower tier is still more favorable than losing a member. It still keeps the user a part of your organization or business.
When you use a good pullback strategy, a member whose use of your service has declined over time can actually increase instead.
Ask Former Members for Renewal With a Great Email
Asking former members to renew their expired service with a great email message will also help you boost renewal rates.
You should use emails to get in touch with already lapsed members and openly ask them to renew their membership.
With a compelling enough message, you have the chance to get them back into your organization. To be successful, your email needs to show appreciation for their presence.
A great renewal request will remind lapsed members of the value of your service.
It’s important that you provide former members with great reasons to rethink their choice, preferably by explaining how you fixed the issues that drove them to quit your service in the first place.
You should include the following in a renewal mail:
- A strong salutation or greeting
- A reminder of the membership value
- A renewal request
- A renewal incentive
- A thank you
Ideally, after reading your email, they will realize the importance of their membership and renew their subscription to your service.
When you engage a past member about renewal, you have a chance to do things better this time.
Contacting members directly like this also gives you an opportunity to collect feedback from them and improve your membership service.
This way, you have a shot at getting them back and you gain insight into how you can improve.
Asking members for renewal is a great tactic for getting them back, and you shouldn’t be shy about sending requests out.
Thank Members for Renewing Their Memberships
Showing gratitude can go a long way towards ensuring high renewal rates, so you should never miss an opportunity to do so.
Memberships and subscriptions often feel like a transactional experience instead of a meaningful service.
Thank-you emails give you an opportunity to break that tendency and foster a good relationship.
When you use the opportunity to show gratitude, you distinguish your business from other membership or subscription-based services.
Thanking members for renewing their subscriptions shows them you noticed them among other members.
When they receive a personalized thank-you email upon renewal, users appreciate the genuine nature of that gesture and feel appreciated.
That feeling, in turn, drives the continual use of your services.
According to a survey by Ask Your Market, 81% of respondents say that leaving thank-you notes is an important way of showing appreciation.
Another 80% report that they appreciate receiving thank-you notes from others.
Therefore, sending thank you emails to customers that renew their membership is an important part of creating a relationship with them, so make sure to do so regularly.
Run a Re-Engagement Email Campaign
A re-engagement email campaign is an important process where you get your lapsed members back using a carefully executed strategy.
When you start a re-engagement campaign, you give lapsed members a shot at becoming members again.
This type of campaign uses the space between the expiration day and the final email to reinforce the benefits of your service.
It gives members time to reflect so they can consider your offer several times over.
The campaign consists of adjusted email communication that will get them back into your organization.
You should start your re-engagement campaign with an email on the expiration date to remind them their membership has ended.
After 30 days have passed, and they haven’t renewed their membership, send them a follow-up email with space to reconsider. Finally, reach out to them with a final membership-ending email that shows the value of the membership.
As you can see, a re-engagement email campaign is a longer process, unlike one-off renewal requests.
One study has found that 45% of recipients who had received win-back (or re-engagement) emails read subsequent messages.
This means that an effective re-engagement campaign can win you back lapsed members.
Re-engagement email campaigns are a saving grace for bringing back members who did not renew. You should start using them to get members back.
Conclusion
Members cancel subscriptions every day, but having a strategy for retaining them is a lifesaver for membership-based services.
How you go about securing high renewal rates will have a major impact on the well-being of your business.
In this blog, we’ve discussed why renewal rates are important and shared our top tips for keeping renewal rates high. Follow the tips we’ve discussed, and you’ll see your members stick around for a long time.