Renewals, the Key to Your Organization

August 19, 2014 |   Vol. 13   |   Issue 8
Renewals, the key to your organization

Renewals are a vital component of an Association’s lifeblood. They are very often the primary income generator, and it’s critical that the renewal system be consistent, accurate, on time, and appropriate. And, renewing members has become an increasingly complicated process. Today’s most effect renewal systems are built around multi-media contacts that combine mail, email, and telephone, all integrated with the Web.

Put simply, renewals are a referendum on member satisfaction, and as such, many members have already made the decision on whether to renew or not. However, the way in which you set up your renewal process can still have a significant impact. For many members, the decision to renew or not to renew has been made well before renewal time based on their experience with the association throughout the year.


The renewal rate measures the amount of people kept over time, usually observed over the span of a year. Ask yourself the question: of the members you started with a year ago, how many did you keep? The formula is pretty simple. You take the number of members you have today, subtract out the new members who came in over the past twelve months and divide that by the number of members you had one year ago today.

An association with a 50% renewal rate keeps its members an average of 2 years—half drop out the first year and the remaining half drop out the second year. If dues are $100 per year, then a member’s average lifetime value is $200.

Assume the renewal rate is higher—80%. Twenty percent of the members leave each year so each stays about 5 years. If dues are $100 per year, each member’s lifetime value is $500, 2 1?2 times the lifetime value of the 50% renewal rate. You can see that incremental renewal improvements result in exponential revenue increases. Plus, it is far less costly and far more productive to develop and maintain a strong renewals program than to implement new member acquisitions.

Differing business rules among organizations as well as factors unique to different professions can have a huge bearing on renewal rates. One association’s renewal rate can rarely be compared to others.


Renewals are an excellent opportunity to restate the value of membership and, by the response rate, to measure the value that members attribute to the organization. Renewal rates are a good measure of the value members believe they receive. Poor actual or perceived value almost always results in lower renewal rates. But if renewals are declining despite a strong renewal program, a member engagement plan or lapsed member reinstatement series may be in order.

Whether sent by email, postal mail or linked to the web, renewal notices should leverage your association’s brand and continue to build recognition and awareness. So, always remind your members of the exclusive value that membership offers.


You need to have in place strategies that will increase your chances of getting members to renew. But how many renewal touches do you need? A traditional series lasts about 8 months, starting about three or four months before membership expiration and sending notices once a month until three or four months after, but it could easily be longer.

Mail and email notices can be sent each month, while telephone calls are effective at “bringing back” members who are past their renewal dates. Phone calls can be used after expiration to reach members who have still not responded. By analyzing response rates from each renewal touch, associations can eliminate messages with low response rates and increase messaging in channels that perform strongly.

And if members don’t renew? If they are still a valid prospect they should go back into the prospect pool—with a special tag to show they have previously been a member so they are treated a little differently.


The easier you make the act of renewing, the better the chances the member will act on it. Payment options such as automatic credit card renewal payment, installment billing, and multi-year memberships have all proven to increase renewal rates.

These options change the dynamic from asking a member to proactively continue membership, to instead requiring a member to move proactively and end membership. Some organizations that use automatic renewals have seen renewal rates increase by as much as 10 points.

If you offer online renewals, provide instructions in your letter or a link in your email, so that your member can act immediately and renew easily. If you offer a variety of payment options, send them to the information via a direct link to your website.


If you have not had a response from your pre-expire renewal efforts, consider sending renewal notices to both the bill-to and ship-to address in your database. If you normally send renewals to the bill-to address, you may find that the notice needs the push or approval of the ship-to user to get through the system. If you normally send the notice to the ship-to address, you may find there is a new staff person in the organization that the bill paying department can identify. Either way, with one organization we have seen a 20 percent lift in post expire response rates for the notice going to both addresses.

If you want to learn more about ways to optimize your renewal program join us on Wednesday, September 24 at 2:00 pm EDT for our free online webinar, 25 Quick and Easy Tips to Improve your Renewal Rate. Register online at

For more information about ways to recruit and renew more members, contact MGI Senior Account Director Scott Seril at or call him at 703.706.0316.

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