Growth in your membership feels great — but looks can be deceiving. Beneath those rising membership numbers could be hidden risks waiting to stall your momentum. Want to keep growing? It’s time to go beyond the surface and uncover what the data is really telling you.
In a Member Association, everybody knows retention is really important, right? But when we are in a sustained period of member growth, how much of an eye do we actually keep on it, and is there growth that we’re leaving on the table? Do we have a leaky bucket that‘s evading our 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 in April 2024
A new joiner in the sales team in November 2023 has shown her value, helping the Globex Association enjoy a year of growth in 2024 by increasing the recruitment of new members. The team and the board are rightly celebrating!
Ok, so growth at Globex looks great, as Kerry says. The introduction of a new staff member in the sales team has increased acquisition and resulted in the growth of members through 2024. Certainly, this is cause for celebration!
However, a top-line member count doesn’t tell us much about the health of our growth, can that growth be sustained? We need to understand what is driving growth to confidently maintain it, or even accelerate it.
Spot the “Leaky Bucket”
Growth or decline in member numbers is driven by the rates of new members recruited (acquisition) and members retained (retention). We can use the relationship between these two KPIs as an indicator of health within membership growth. Let’s take a look at what’s going on with Globex:
A “Leaky Bucket” refers to a situation where high acquisition is paired with a disproportionately low retention rate. In the chart above, we observe an average renewal rate of 55%, accompanied by an impressive annual acquisition increase of 58%.
With such a low renewal rate, growth becomes dependent on consistently high acquisition, which is inherently unsustainable. The Year 1 renewal rate will inevitably fall below the average, indicating that more members are leaving after their first year than choosing to renew.
Now, consider what happens if we lose a member of the sales team instead of gaining one, causing acquisition to drop. With acquisition slowing down and retention still weak, the business could face a significant decline in overall membership, exposing the risks of relying too heavily on acquisition-driven growth.
The risk with a leaky bucket is that we swiftly move into decline if the acquisition rate slows.
Leaving growth out on the table
Beyond the risk of membership decline, a poor retention rate means Globex is also missing out on the power of compounded growth.
The chart below illustrates two scenarios:
- Increased Retention: Acquisition levels remain steady from 2023 to 2024, but the renewal rate rises from 65% to 80%.
- Reduced Acquisition, Higher Retention: Acquisition decreases by 28% — the equivalent of losing a member of the sales team — yet the 80% renewal rate still drives a 21% growth over two years.
This demonstrates that Globex has been leaving substantial growth opportunities on the table, while placing unnecessary pressure on the sales team to sustain growth through continuous new member acquisition.
Conclusion
It’s exciting to see your membership numbers grow, but digging deeper into the data behind those numbers is essential for identifying potential risks to that growth.
Relying solely on member counts won’t give you the full picture. To truly assess the health of your membership, develop trended acquisition and retention KPIs. This will help you spot emerging patterns and ensure your entire team is consistently monitoring and interpreting the data.
Trust your instincts — if you’ve got a lingering concern about retention, don’t ignore it. Low retention could be silently throttling your growth.
If you discover a “Leaky Bucket” scenario — where retention is low but you’re still growing — you’re actually sitting on an incredible opportunity. Focus on improving retention now, and you’ll be able to compound that growth even further. Adjust your strategy and start turning those short-term gains into sustained success!
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