Ep 240: The Biggest Mistake Businesses Make When Tracking Metrics

Sep 22

The Biggest Mistake Businesses Make When Tracking Metrics

Tracking your metrics is one of the most important things you can do as a membership owner.

But there is one big mistake that can cost you time, money, and mental energy.

Comparing your retention rate to someone else’s.

I recently talked about this with my friend, Melinda Cohan. We discussed what membership owners should expect from their retention rates and what to do when those numbers are lower than they want.

What Is a Good Membership Retention Rate?

I encourage membership owners not to rely on outside benchmarks.

Your members may be very different from someone else’s. Your program structure and purpose may be different too.

A busy executive may engage differently than a full-time entrepreneur. A working mom building a business on the side may have a different completion rate too.

That is why your own data matters.

You should benchmark against yourself.

Your Retention Rate Can Create a Growth Ceiling

Let’s say your retention rate is 80%.

Depending on how many new members you bring in, you may struggle to grow. Eventually, you can hit a growth ceiling.

The math is simple. You are bringing in the same amount or less of the number of people leaving.

To grow beyond that ceiling, you need to do one of two things:

Acquire more people faster
Stop losing as many people

The best option is a combination of both.

This is why knowing your own numbers matters.

Your retention goal should be based on how many members you can bring in each month or during a launch. It can also depend on how long it takes you to acquire new clients.

Maybe your data shows that you need to move from 80% retention to 90% or even 95%.

The goal is not to hit someone else’s benchmark.

The goal is to know what your business needs to grow.

If Retention Is Low, Start With Onboarding

If your retention rate is lower than you want, look at onboarding first.

Are you doing a good job of getting members activated?

Then look at who you are attracting.

When I see a really low retention rate, I start to question whether the marketing and delivery are in alignment.

Strong marketing can get people into a program. But if the marketing overpromises and the program under-delivers, churn goes up.

You want to promise enough to help people understand the purpose of your program and convert.

Then leave room to exceed those expectations.

Promise enough to get the conversion. Leave room for surprise and delight.

Find Where Members Are Falling Off

Your data can also show you where your biggest retention opportunities are.

Use a simple red, yellow, and green system to identify where people are falling off.

Then focus on incremental improvement.

You do not need to change everything at once.

Find the biggest opportunity. Improve it. Then keep tracking your numbers.

Learn From the Members Who Leave

If you have a churn problem, ask members why they are leaving.

If you work one-on-one with people, have a conversation with each person who leaves. Find out how you could have served them better.

For a larger membership, ask why they are leaving during the cancellation process.

Do not wait until they cancel and disappear.

You can get valuable insight from those answers and use it to improve your program.

Your best retention benchmark is not someone else’s number.

Know your numbers. Find where people are falling off. Then make incremental improvements.

Want help finding the biggest opportunities to improve retention in your membership?

Learn how to work with me at shanalynn.com

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Shana Lynn