Growth that looks fine on the surface

In a membership association, everybody knows retention matters. But when membership is in a sustained period of growth, how much attention does retention actually get — and is there growth being left on the table because of it? Is there a leaky bucket quietly evading attention?

“Sure, but, well so what! Our top-line member growth is great. Just last month we hit a record for new members and the board were thrilled to bits. Yeah, our retention is probably a bit lower than we’d like but overall we’re doing pretty good.” — Kerry, Membership Director at the (entirely fictional) Globex Association, April 2024

Growth at Globex looks great, as Kerry says. A new hire in the sales team increased acquisition and drove membership growth through the year — certainly cause for celebration. But a top-line member count on its own doesn’t say much about the health of that growth, or whether it can be sustained. Understanding what’s driving it is what makes it possible to maintain, or even accelerate.

Spot the leaky bucket

Growth or decline in member numbers is driven by two rates: new members recruited (acquisition) and members retained (retention). The relationship between the two is a good indicator of the health of that growth. At Globex, the average renewal rate sits at 55%, alongside an annual acquisition increase of 58% (Figure 1).

A “leaky bucket” is exactly this pattern — high acquisition paired with a disproportionately low retention rate. With a renewal rate this low, growth becomes dependent on consistently high acquisition, which is inherently unsustainable: the first-year renewal rate will typically sit below the average, meaning more members leave after year one than choose to renew.

Now consider what happens if Globex loses a member of the sales team instead of gaining one, and acquisition drops. With retention still weak, the organisation could face a significant decline in overall membership — the risk of relying too heavily on acquisition-driven growth is that it reverses just as quickly as it built up, the moment acquisition slows.

The growth being left on the table

Beyond the risk of decline, a poor retention rate means an organisation like Globex is also missing out on the power of compounded growth. Two scenarios illustrate this:

  • Increased retention, steady acquisition — acquisition holds steady year on year, but the renewal rate rises from 65% to 80%.
  • Reduced acquisition, higher retention — acquisition falls by 28% (the equivalent of losing a member of the sales team), yet an 80% renewal rate still drives 21% growth over two years.

Even with lower acquisition, the higher-retention path outperforms — while placing far less pressure on the sales team to sustain growth purely through new member recruitment.

The takeaway

It’s exciting to see membership numbers grow, but digging into the data behind those numbers is essential for spotting risks to that growth before they surface. Member counts alone don’t give the full picture — trended acquisition and retention KPIs do, and they let a team spot emerging patterns early rather than after the fact.

If there’s a lingering concern about retention, it’s worth trusting that instinct rather than ignoring it; low retention can be quietly throttling growth that looks healthy on the surface. And if a leaky-bucket pattern turns up — low retention, but still growing — that’s actually an opportunity: improving retention from there compounds the growth already being generated, turning short-term gains into something sustained.