Exploring the Subscription Management Conundrum: Member Retention or Member Acquisition?

Subscription Management

If you’re running a membership based organisation we’re certain that at some point you’ll be asking the important question of where to focus your time and resources when it comes to member acquisition and retention. Your focus will be different at different stages in your development but in a nutshell, for ongoing growth, you’ll almost always need the number of members who leave your organisation to be less than the number of new arrivals.

In the beginning stages of growth (starting from zero) you’ll need to focus almost entirely on acquisition and getting new members signed up, which can be costly and time consuming, but for obvious reasons is essential. However, as you start to get people through your door there will come a point where you can shift your focus to retaining the members you’ve acquired. In this post we will have a brief look at subscription management for both acquisition and retention, and how to decide which is more important for your given circumstances.

In essence making the decision of which to focus on will require you to have some clear answers to certain questions. Let’s cover the key questions now.

Do You Know What Your ‘Critical Mass’ Is and Are You There Yet?

Only you know what the key number of members is that result in you making your desired revenue. Based on the value of each member, how many members do you need to reach your target revenue? Once you have this figure you can see whether your existing membership number is below or above this target. If you’re below the target number, are you continuing to move towards your target and in a reasonable time frame? If not, is it because you lose too many newly acquired members? Or is it because you aren’t acquiring enough new members?

Acquisition or Retention?

If you don’t seem to have a problem with acquisition but are losing a large number of members it may be time to focus your efforts on understanding why your members are dropping off and start fixing the problems that are causing it. On the other hand if you’re losing a small percentage of members but not adding significantly to your membership number, focusing on various elements of the acquisition process may be more important. And this may require a careful look at your marketing and application process to see where the weaknesses lie.


Ultimately your acquisition and retention activities will also be guided by the budget you have available for the different activities you want to undertake. If you’re able, it is well worth your time to figure out what it costs you to acquire a new member and what it costs you to retain a member. Typically the former is considerably more expensive but knowing precisely what those numbers are will empower you to make informed decisions rather than guessing.

Identifying Additional Opportunities

It’s widely agreed that it’s easier to sell to someone who’s already bought from you than it is to sell to a first time buyer. So it’s a good idea, when looking at member retention, to also consider what your opportunities are to increase revenue from existing members. It may be that some of your drop-off is due to not fully providing for members needs and this ultimately may open the door to additional services you could offer. Or you may be experiencing a low drop-off rate but are well positioned to provide further services to existing members. Offering multiple levels of membership would be a good example here.

It sounds obvious but always remember that the number of people who are leaving your organisation must be less than the number of new arrivals. Make sure you clearly define and set your growth goals and use the ideas we’ve talked about above to help you determine where to focus your resources, without neglecting one area for another. If you follow these basic principles, you’ll find a balance that will help you be in a continual state of growth.

To help you begin discovering more about your member acquisition and retention rates, take a tour of PaySubsOnline’s subscription management software and learn how it can help pinpoint problem areas.


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