Membership organisations can report excellent renewal rates while losing more members than they realise.

Most membership organisations report a renewal rate as a headline measure of performance, and with good reason. Renewals are the most visible point in the membership year, and a good renewal campaign is worth celebrating.

The renewal rate isn’t the same as the retention rate, though. The two measure different things, and an organisation can be very good at renewing memberships while still losing a fair number of members across the year.

What is a membership renewal rate?

A renewal rate is the proportion of memberships due for renewal in a given period that actually renew.

Renewal rate = (Memberships renewed ÷ Memberships eligible for renewal) × 100

Take an association with 2,000 memberships due during its annual renewal campaign. 1,700 renew and 300 don’t.

1,700 ÷ 2,000 × 100 = 85%

That tells you how well the campaign worked: the communications, the process and the relationships behind it. It doesn’t tell you how many members the organisation kept over the year.

You can try the calculation with our Membership Renewal Rate Calculator.

What is a membership retention rate?

A retention rate is the proportion of the members you had at the start of a period who are still members at the end of it.

An organisation starts the year with 2,000 members. Twelve months later, 1,600 of those same members are still active.

1,600 ÷ 2,000 × 100 = 80%

Only members present at the start count. If 400 people joined during the year, they’re left out, because the question is how well the organisation kept the members it already had.

You can get the same figure from membership totals:

Retention rate = ((Members at end − New members acquired) ÷ Members at start) × 100

This only works if your membership counts are reconciled consistently and the new-member figure includes everyone added during the period. Our Membership Retention Rate Calculator does the sum for you.

Why renewal rates can miss members who leave

A professional body runs an annual renewal campaign. 10,000 members are eligible, and 9,000 renew.

9,000 ÷ 10,000 × 100 = 90%

That’s a good result. Over the next twelve months, though, some of those 9,000 leave anyway. Some retire and no longer need professional membership, some resign because their circumstances change, and some die. Say 300 of them go, leaving 8,700 of the original 10,000.

8,700 ÷ 10,000 × 100 = 87%

Measure Result
Renewal rate 90%
Twelve-month retention rate 87%
Difference 3 percentage points

Both figures are correct. The renewal rate describes the campaign. The retention rate also picks up the members lost outside it.

The timing of your renewal campaign matters too

Many organisations run a fixed membership year but let members renew well before it starts, so the renewal population can be set months in advance. Others calculate renewal performance using only the members still eligible when the campaign opens. Either way, anyone who left earlier drops out of the calculation.

Take an organisation with 10,000 active members at the start of its membership year. 200 leave before the next renewal campaign begins, leaving 9,800 eligible, and 9,016 of those renew.

Renewal rate = 9,016 ÷ 9,800 × 100 = 92%

Retention of original membership = 9,016 ÷ 10,000 × 100 = 90.16%

Measure Result
Members at start 10,000
Members leaving before renewal campaign 200
Members eligible for renewal 9,800
Members successfully renewed 9,016
Reported renewal rate 92%
Retention of original membership 90.16%

The campaign did well, but its success rate left out the 200 members who had already gone. There’s nothing wrong with the renewal calculation itself. The trouble starts if the organisation reads it as a full measure of retention, because it will understate the losses across the year.

Membership frequency adds another complication

Not every organisation has a single annual renewal cycle. Some offer monthly or quarterly memberships, sometimes alongside annual ones, which makes it even more important to separate successful renewal transactions from members kept over time.

Say 95% of renewals on a monthly membership succeed. That sounds healthy, but a member has to renew twelve times to stay for a year. If each monthly renewal has a 95% chance of succeeding, the chance of getting through all twelve is:

0.95¹² × 100 = 54.04%

So only around 54% of the original members would still be there after a year. The illustration is simplified: it assumes the renewal probability stays constant and that each month is independent, and real behaviour is messier. Even so, a high success rate at each payment point doesn’t guarantee high annual retention, and comparing renewal rates across payment frequencies can mislead unless you know how each one was calculated.

Averages can hide important differences

Even correctly calculated rates can hide big differences between groups. Here’s one association’s annual retention:

Membership segment Starting members Members retained Retention rate
First-year members 1,000 650 65%
Established members 4,000 3,680 92%
Total 5,000 4,330 86.6%

The overall rate of 86.6% looks respectable, but the organisation is losing more than a third of its first-year members while keeping almost all of its established ones. That calls for a different response from steady attrition across the whole membership: better onboarding, showing value earlier, or finding out what new members expected when they joined. A better renewal campaign probably wouldn’t touch it.

Retention also varies by membership grade, payment method, length of membership and engagement level. Breaking the figure down shows you where effort is most likely to pay off.

Renewal is an event. Retention is an outcome.

Renewal happens at a point in time. A member reaches their renewal date and either renews or doesn’t, and the renewal rate tells you how well you handle those moments.

Retention is measured over a period. It tells you whether members stayed, whenever their individual renewals fell, which makes it the better guide to the longer-term health of the membership.

Whether someone stays depends on far more than what happens when the renewal notice lands. It depends on what they’ve got out of membership all year, how relevant the organisation is to their work or circumstances, and whether they feel part of the community.

How they pay can matter too. In our work with the Institute of Internal Communication (IoIC), members paying by Direct Debit had substantially higher retention than those paying by credit card, and that finding helped shape a push to move more members onto Direct Debit. The analysis showed an association between payment method and retention, not that payment method by itself kept people longer. It was still a useful place to start asking why members stay and what could be done differently.

Which measure should your organisation use?

Both, because they answer different questions.

Renewal rates tell you:

  • How successful was our latest renewal campaign?
  • Are our renewal communications working?
  • How does renewal performance differ between membership grades?
  • Are changes to our renewal process improving results?

Retention rates tell you:

  • What proportion of our members are still with us after twelve months?
  • Are we getting better at keeping members over time?
  • Which membership segments lose the most members?
  • How does retention change as members become more established?
  • What factors are associated with members staying longer?

For most organisations, we’d recommend measuring retention over a consistent rolling twelve-month period alongside renewal performance. That shows who stays without depending on when the annual campaign happens to fall. We’d also report first-year retention separately from established-member retention wherever you can, because the two usually behave quite differently.

Whatever you report, make sure everyone knows exactly how each figure is calculated. A dashboard showing 90% retention is of limited use if nobody can say what the 90% refers to.

Calculate your membership rates

We’ve built two free calculators:

Layercake helps membership organisations understand the patterns behind their membership numbers and decide where to act on retention.