Membership churn affects your bottom line and a significant proportion of it is preventable! Get tips on how to reduce member churn and recover failed payments to keep your revenue rolling.
Keeping existing members is more important than getting new ones.
After all, marketing your site and onboarding new members is time-consuming and expensive. If new members leave shortly after they join, that’s a lot of wasted effort.
A huge mistake many membership site owners make is investing the majority of their time and money in advertising and marketing to acquire new members.
But acquisition can cost up to 25 times (yes, TWENTY-FIVE!) more than retention.
So understanding why members churn, and taking necessary steps to prevent it should be a top-priority!
In this guide, we’ll show you how to create a strategy to prevent membership churn and recover failed payments (one of the greatest causes of churn).
These are two of the most powerful ways to protect your site’s bottom line.
To start, we’ll go over why maximizing retention is so important.
Why You MUST Reduce Membership Churn
It can’t be overstated: reducing member churn is critical to your site’s success.
To really paint a picture of just how important it is, I want to run you through a few hypothetical scenarios.
1. Ongoing Losses
Let’s say your membership costs $49 a month and you have 250 members. That means your site is bringing in a solid $12,250 per month or $147,000 per year.
But what happens if just five members cancel each month? That’s only a 2% churn rate, which might not seem like a big deal.
At first glance, losing $245 per month doesn’t seem catastrophic. But over a year, that adds up to $2,940 in lost revenue. And that’s before factoring in how much more you’ll need to spend to replace those lost members.
Now, imagine a 5% churn rate (12-13 members per month). That’s a monthly loss of $637, or $7,644 per year – money that could have gone toward growth, marketing, or even paying yourself.
Membership churn compounds, and the more you ignore it, the harder it becomes to sustain long-term revenue growth.
2. Higher Cost Per Head
Remember that statistic: acquisition can cost up to 25 times member retention? Let’s take a closer look at how that’s the case.
Say you spend $80 on ads, promotions, and sales efforts to bring in each new member. That means your Customer Acquisition Cost (CAC) is $80 per member.
Now, let’s go back to our membership pricing – $49 per month. If the average member stays for two months before churning, you’ve only made $98 in revenue from them.
Initially, that seems like a profit, right? But once you subtract your $80 acquisition cost, you’ve barely made $18 per member. And that doesn’t even account for operating costs like hosting, software, and support.
Now, imagine you reduce churn and extend the average membership lifespan to six months. That same member is now worth $294 in revenue – turning your $80 acquisition cost into a serious return on investment.
When member churn is high, you’re constantly running uphill, spending money just to break even. But when retention is strong, every new member adds to long-term, sustainable growth.
3. Leaky Rebills
Not all churn is intentional. Sometimes, members don’t cancel, they just fail to pay. Their credit card expires, their bank declines a charge, or they hit a temporary cash crunch. This is called involuntary churn, and it’s a silent revenue killer.
So your 250 members paying $49/month,generate $12,250 in monthly revenue. Now imagine 5% of those payments fail each month – that’s 12-13 members missing a payment, resulting in a $637 monthly loss or $7,644 annually.
And here’s the kicker: many of these members don’t even realize they’ve been cut off. They might have every intention of staying subscribed, but if they miss a payment and don’t renew manually, they’re gone.
Now, consider what happens if even half of those failed payments were recovered with a simple automated email or card update reminder. That’s thousands of dollars back in your pocket without having to acquire a single new member.
With those three examples alone, hopefully now you can see the very real financial cost of membership churn.
But there are more reasons too:
4. Slow Growth
Membership churn counteracts new customer growth. If you’re adding 1,000 new customers per month but losing 800 to churn, your actual growth is minimal. Sustainable growth happens when retention is strong.
5. Fewer Referrals
Loyal members refer others, but churned members don’t. High retention fuels word-of-mouth marketing, while high churn can lead to negative reviews and reduced trust.
6. Operational Inefficiency
Constantly replacing lost members is inefficient. High membership churn can strain your support team, marketing budget, and product development, forcing you to focus on damage control rather than innovation.
How To Prevent Membership Churn
So now we know why membership churn is an important issue for your site, let’s talk about some of the most effective strategies to prevent it.
Make Your New Members Feel Welcome
You never get a second chance to make a first impression, so it’s vital your relationship with new members starts on the right foot. An automated welcome message is an excellent way to make sure it does.
MemberPress has a handy automated welcome-message feature that lets you greet new members and start the orientation process right away.
Your welcome message should include things like…
- Links to your best content
- Helpful documentation
- Next-steps instructions
- Support information
Bring Existing Members Back to Your Site
With so many demands on your members’ attention, it’s easy to understand how they might forget about your product. It’s your responsibility to remind them, especially when you add new content or launch a new feature.
Be sure to send out an announcement whenever you have news. It’s a great way to bring existing members back to your site and remind them why they signed up in the first place.
The more valuable your site, the less likely they’ll decide your site is a waste of money when reviewing their monthly expenses.
MemberPress integrates with the best email marketing services, including ActiveCampaign and Kit. And this makes sending announcements to your members a breeze.
Reach Out to Potential Leavers
Spotting disengaged members before they leave is one of the most powerful ways to reduce churn. A proactive approach can make the difference between saving a subscription and losing a customer forever
By now we know full well it’s easier to keep an existing member than to acquire a new customer. It’s even harder to persuade a former user to rejoin. So monitoring for disengagement is key in reducing your membership churn rate.
The MemberPress Reminders feature is an awesome churn-reducing tool. For example, you can notify members when it’s time to renew a subscription or update an expiring credit card.
Doing so helps avoid those leaky rebill lapses and lost memberships.
There are several reminder types, or triggers, to choose from. And you can set the emails so they’re sent before or after the trigger event takes place. The reminder types include:
- After a member signs up
- After a member abandons signup
- Before a subscription expires
- After a subscription expires
- Before a subscription renews
- Before a credit card expires
- After a credit card expires
- Before a trial ends
Constantly Review User Experience (UX)
Things move (and change) fast in the online world. That means your user experience (UX) can always be analyzed and improved.
While you may’ve launched the perfect monetized website, it’s possible that plugin and theme updates have slightly altered some of your site’s formatting.
Is your content still fully mobile-friendly? Have you implemented new developments following UX best practices? These are super important things to check for regularly.
Your site may not be broken, but could it be frustrating your members? Tools like Google Analytics can help you see how members experience your site, and assist you in optimizing your content.
Keep an Eye on the Competition
Were you ahead of the curve when you launched? Unfortunately, there’s a good chance your competitors have upped their game, and new contenders have entered the field.
Increased competition can have a significant impact on member retention. So it’s important to monitor your rivals to ensure you’re still leading the pack.
If keeping an eye on the competition means joining their programs, do it. Whatever reduces your membership churn rate is worth the effort.
Update and Improve Your Content
Constantly updating and improving your product helps you stay ahead of the competition and gives your existing members a good reason to keep paying their monthly subscription fees.
No matter how evergreen your membership content is, changes to best practices, new research findings, advancements in technology, and software updates can all leave your content looking out-of-date and less appealing to your members.
Make sure you…
- Do regular research to keep up on trending topics (Buzzsumo and Semrush are great tools for this).
- Do regular research to keep up on content best practices.
- Set a schedule to perform regular content audits.
Don’t Over Promote
Just like your parents said, there can be too much of a good thing. Whether you’ve created marketing materials yourself, you’ve hired an expert, or you primarily work with affiliates, over promotion can increase your member churn.
Over promotion can mean overselling the value of your product or just doing too much marketing (placing too many ads on your site or sending out too many emails, for example). And it can result in new members leaving almost as quickly as they arrive.
As your monetized site and its content evolves, make sure your marketing materials reflect these changes. It’s always better to underpromise and overdeliver.
Also, you might consider using an A/B testing plugin like Nelio Testing to figure out what’s working and what isn’t. Then you can get rid of the fluff.
Ask for Feedback and Listen to Your Members
Never assume an active member is a happy member. Even if a member is engaging with your content, they may still be thinking about quitting your site.
While user engagement tools can help rescue disengaged members, asking for feedback is a great way to find out how to keep active users satisfied.
Create user surveys, open up discussion areas, and use email marketing tools to better connect with active users. Doing so will tell you a lot about your membership site and what you can do to reduce its churn rate.
Furthermore, encouraging members to take an exit interview or cancellation survey as they leave can reveal a lot about your business. OptinMonster is an excellent tool for creating and managing these sorts of assets.
And with the MemberPress + OptinMonster integration, MemberPress users can display campaigns on pages such as Register, Checkout, Group pages, Membership pages, Courses, Lessons, Quizzes, and Thank You pages.
Recapturing Failed Payments (Involuntary Membership Churn)
About 50% of churn can be attributed to failed payments. Failed payments occur when a member’s renewal fails because their credit card is declined.
The following are the most common causes of failed renewals:
- Maximum spending limit is reached
- Insufficient funds
- Inaccurate information
- Expired card
- Recent fraudulent activity on the card
- Human error
Involuntary churn is one of the most overlooked but critical factors in the success of subscription-based online businesses.
Unfortunately, fighting this type of churn requires a highly engaged approach. In other words, it’s time consuming.
Your best bet is outsourcing. Though there’s a cost involved, a good involuntary churn service is worth its weight in gold.
We highly recommend Churn Buster. In fact, we use their services here at MemberPress, and the ROI is fantastic.
Churn Buster provides deep insights into why payments fail and uses adaptive recovery sequences to maximize retention.
With its Measure tool, you gain real-time visibility into passive churn, helping you refine your strategy and recover lost revenue.
Their system goes beyond simple card retries, leveraging customer segmentation and personalized outreach to keep more members subscribed.
Instead of losing members to avoidable billing issues, Churn Buster helps ensure your recurring revenue stays on track without extra effort on your end.
Final Thoughts
If you’re charging recurring subscription fees, reducing the membership churn rate on your monetized website will help increase the lifetime value of each member on your site.
This means you can justify investing more money in new-member acquisition and improving your content – the two most effective ways to grow your membership business.
You’ll need to be proactive if you want to reduce your churn rate. Once a member quits, it’s unlikely you’ll get them to come back.
Instead, focus your efforts on providing ongoing value and keeping an eye out for those early warning signs of member dissatisfaction.
How do you plan to start reducing your membership site’s churn rate? Let us know in the comments.
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Great tips, I’m now considering ways to invite members back!
Awesome to hear that this article has helped you, Dreena!