‘Know the numbers’ is the best advice that anyone can give you when it comes to membership marketing. Knowing the numbers can help answer key marketing questions like: ‘What is the value of a member?’, ‘How much can I afford to spend to obtain a member?’, and ‘What is my membership retention rate?



The following formulas are provided as a handy reference tool for membership marketers to help them take a strategic look at the economics of membership.



Renewal Rate
Renewal Rate measures the number of members kept over a given period of time—usually during a fiscal or calendar year.

• Total Number of Members Today (minus 12 months of new members) / Total Number of Members in Previous Year


• Example: (105 - 15)/100 = 90% Renewal Rate

Average Tenure
How long on average do members stay with an association?

• Reciprocal of Renewal Rate: 1 – Renewal Rate or, 1 - .90 = .10


• Example: Divide Reciprocal into 1, or, 1 /.10 = an Average Tenure of 10 years

Lifetime Value (LTV)
Assume $100 / Year Dues and $50 / Year in Non-Dues Revenue

• (Dues + Non-Dues Revenue) x Average Tenure = LTV
• Example: ($100 + $50) x 10 = $1,500 LTV

Maximum Acquisition Cost (MAC)
Assume Incremental Servicing Costs = $20 and Cost of Goods Sold = $25

• (Dues + Non-Dues Revenue) - (Incremental Servicing Costs + Costs of Goods Sold) x Avg. Tenure = MAC
• Example: (($100 + $50) - ($20 + $25)) x 10 = $1,050 MAC

Tony Rossell, Senior Vice President, Marketing General Inc.