Membership Metrics: The 3 Keys to Success - Kelsey Silver

00:01 Hello and welcome to the course and Membership Creators Summit. I am Kelsey Silver and I'm here to present on membership metrics the three keys to success. We are on a mission to not just hope our membership program is working, but to actually use our metrics to stop the guesswork and make data-driven decisions about our membership. So first, who the heck am I? My name is Kelsey you can call me Kelsey over there it all kind of works. 

00:30 I'm neurodivergian, I am an MIT certified data analyst, I'm an ex corporate daddy with over a decade of experience in corporate operations. My absolute favorite title is Mama to My Little Potato, and I'm also a licensed therapist. I help coaches and service providers find all that juicy data that's hiding in their dusty Google spreadsheets that they haven't looked at in ages, but make their VAS fill out anyway so that they can increase their revenue and figure out all of the confusing analytics platforms, even if numbers make them itch worse than about of Poison Ivy. 

01:11 So why are you here? First, we're going to talk about why metrics matter for membership success in the 1st place most of you are probably measuring some things, but we're going to talk about the top three metrics to measure within your membership and how to think about them a little bit differently so that they're more effective than what you're doing right now. We're also going to figure out how to actually do something with those metrics instead of just staring at them like a deer caught in the headlights or having your VA input them every month but not actually doing anything with that information. 

01:45 So why do membership metrics matter in the 1st place? Well, there's the old adage that you can't manage what you don't measure. And that's really true for our membership is we can go about managing all the day-to-day things, but we're not really managing outcomes, effectiveness, efficiency and certainly not revenue if we're not measuring certain milestones throughout our membership now. Right now you might be measuring income, you might be measuring total number of members, but there are several different measurements that and metrics for lack of better phrasing that we can use to get a really great insight into how effective our membership is. 

02:31 And every time we get more data, we get more clarity. Our data provides a method of identifying opportunities, not only for growth, although that's certainly a great place to start when it comes to our membership, right we do want to grow our memberships, but at the same time a lot of us likely come from a heart centered place. We want to serve our clients we certainly want to make money, but we also want to serve our clients. 

03:01 And by doing these sorts of measurements on a regular basis, we're able to see where we can improve their experience, the actual user experience within our membership, how we can improve the setup, the onboarding, the sales, even the back end follow up of our memberships in order to really truly ensure that we're serving our client the best of our ability. And at least for the neurodivergence in the room, but certainly for myself and a lot of the clients I work with, we need data and information in order to focus our brain. 

03:42 We're not talking about analysis paralysis here we're going to keep it simple and I'll, I'll explain that throughout this conversation. But our ability to gather these metrics, know how to interpret them, and then do something with that interpretation ensures that our brain is focused on growth, opportunity, and improvement in however you define that for yourself and your membership. Growth may simply mean growing in your ability to maintain your current membership base. That's considered growth. It doesn't have to be 3X10X in your membership, although it certainly could be. 

04:19 A lot of the clients I work with have different definitions of what it truly means to grow their membership, and I have clients who are 10X in their membership, and I have clients who just want to dive deeper into their current members. Both of those are completely valid, but without data to inform your strategic plan, you're not going to know what steps you need to take, and so your brain is going to kind of go everywhere. So what are these top three metrics I'm talking about? They are retention rate, which is how you keep your members coming back. Membership engagement or member engagement, which is how you build loyalty and increase value within your membership so that your clients are constantly engaging with the membership and whatever that means for your membership setup format and revenue per member, which is how much money you actually make from each member, which is how you maximize profitability and strategic growth. 

05:20 We're going to talk about each of these in depth, but the first thing I want to do to sort of set our brains in the right space is that all three of these metrics are connected and rely on one another. And we'll talk later in the presentation about how they actually interact, but all three of them are important in understanding the actual ecosystem of what's happening within your membership. You're likely tracking all three of these, or at least several of them in your membership. 

05:55 But I challenge you to think about how you could be tracking them a little bit differently and how you could be conceptualizing it a little bit differently in order to really get to the place that you need to get to with your membership. So if you're already tracking retention rate, are you tracking just how many clients stay with you month to month? If you're tracking member engagement, are you just tracking logins or are you tracking how many people have posted in your Facebook group that's attached to your membership how are you defining engagement? And if you're tracking revenue per member, more than likely you're you might be tracking revenue in general, but revenue per member, can we dig down deeper? Can we do revenue per member, can we do revenue per member per launch event that they joined, etcetera so we're going to talk about all of that in just a moment. 

06:48 First thing we're going to look at is retention rate. If you've had your membership for quite some time, you likely have measured this at some point. There's a lot of different ways to think of retention and to measure retention, but at its baseline, it's the percentage of members who stayed in a given period of time. This typically is going to show you whether there's your clients are satisfied with your membership, they are loyal to your membership. 

07:12 And the biggest importance, the main reason you want to measure your retention rate is because it is significantly more cost effective to keep an existing member then it is to find a person to purchase your membership, a brand new person. And so every time you go to launch your membership, if you are in a launch cycle for your membership or if you have an Evergreen membership and you're sourcing leads in different ways, there is a cost to that acquisition. We're going to talk about that later, but there's a cost to acquiring a new member. It is always both in the corporate world and the online business space regardless is always less expensive to keep a new, a current member in your membership than it is to acquire that new member. 

08:03 And so we improve our retention rate by having a retention strategy. That retention strategy can be multi fold. It can be having a community manager in place to encourage people to engage they were already starting to connect with member engagement. It can be your onboarding practice it can be even the format of your membership if you are hosted in something like a Kajabi, or if it's strictly a Facebook group, or if it's just Zoom call. 

08:33 All of those things factor into retention rate, as does the actual cost of the membership. Now, I said at the very beginning that I am the data whisperer for people who hate numbers so you might be looking at me like I've got 16 heads because I've got this ridiculous formula on the screen. But really all retention rate is, is a number of clients or members that were in your membership at the end of the period you're measuring for. Subtract all the new people that came in during that period. Divide that by the number of members you had at the beginning, and you're multiplying it by 100 just to get a nice percentage. 

09:12 So let's say that your membership at the end of 2024 had 240 members in it. You gained 60 members over the year, and in January of 2024 you started with 200 members. So you gained 60 members throughout the year you ended the year with two fourty, but you started the year with 200 That we've multiplied it by 100 is a 90 % retention rate. What that means in layman's term is that 90 % of the members you had at the beginning of the year were still with you at the end of the year. 

09:48 First of all, that's phenomenal membership retention rate, Congrats to you. But also that tells you something that tells you that there's longevity in your program that your members found long term value, particularly if you're a month to month membership as opposed to some sort of annual membership. If you have an annual membership, I do encourage you to look at renewal rate instead of retention rate, just because it's a little bit easier to track. Regardless, let's go with the assumption that we are a month to month membership here and having a 90 % retention rate is kind of ridiculously amazing. 

10:30 But there isn't necessarily an industry standard for membership rates, although they're they're very well might be. Many of the clients I've worked with when I do my VIP days and I really dig into their membership metrics, it fluctuates all over the place client to client. What's important is, are you improving against your own retention rate month over month? And again, I say month over month because that's more than likely how you're currently measuring retention rate. 

11:01 But I want us to think about retention rate a little bit differently. I encourage you to think about retention in a little bit of a different way. Again, you're likely measuring retention month over month and if you're not, start now it's a great place to start. But I want you to think about it a little bit differently and think of it in terms of cohorts. When you sit down after all these amazing sessions today and you sit down with either your own numbers or if you are really averse to numbers, your VA, that's totally fine, totally valid. Take a look at the percentage of clients or members that stay three months, six months and 12 months. 

11:41 So instead of measuring how many of your clients leave each month, stay each month that's a lot of times that's referred to interchangeably as churn rate, retention rate, etcetera. Take a look at these cohorts because if you know that a majority of your members stay three months or a majority of your members stay 12 months, more signal. That's really interesting information in terms of revenue predictability, meaning that if you get a massive influx of members because of a huge campaign you're running and you know that a majority of your members stay at least three months. Think about what that does for your ability to protect predict your revenue. 

12:28 Or let's say that you know that most of your clients, your members stick around for six months, OK, it's really happening at that six month mark. And can we target improvements and think about those opportunities for feedback to say what's really going on at six months is that when clients or our members are a really sort of seeing the end of the long term value of our membership or is 6 months sort of when they've forgotten to start to continue engaging or life gets big busy? Or is it that at six months they've seen so much success that they feel like they can go out and do it on their own and they don't need the membership anymore? Or are they not seeing enough success? And at six months, that's when they decide, you know what, I can't afford this and there are so many different ways to look at your information. 

13:29 But while most of the industry is measuring retention in terms of your churn rate, I encourage you to look at retention in terms of these cohorts so that you can better identify where a majority of your members are leaving the it's also, you can think of it as your average length of stay, so to speak, within your membership. And that starts informing at what point do I need to put in supports to keep my members around longer? 

14:02 Now let's talk about membership engagement. Out of all three metrics that I'm going to be talking about today, this is probably the most tricky to measure, but I've got some easy solutions for you. But first, let's talk about why membership engagement is important. So what membership engagement is measuring is how is exactly what it sounds, how often your members are engaging with the content, you and your membership itself. So really it's just how active are the people in your membership. This will vary by the kind of membership that you have. If there's a very, if you run a very introspective membership where there's a lot of self work happening and there's not a whole lot of sharing, you might have a lower membership engagement rate that's fine it's valid for your membership format, but it's still something that's important to track because if it starts to fall off or you see a big increase, you're going to want to look at that and explore where there's opportunities to improve that. 

15:04 But membership can, engagement can look like event participation, content consumption, the the way that your clients or members are involved in the community. But it really just takes a look at how engaged are your members. Because we know from many studies, both in online business, in corporate, from case studies, etcetera, we know that engaged members are loyal members and loyal members are best referrers. So let me give you some insight into a couple of different ways that we can measure our membership engagement. 

15:39 And if you have a community manager, this is probably a very straightforward task for them if you are going at it on your own in your membership, you want to prioritize what you think your format is best at conveying engagement. And so there's some different ways that we can measure so that's through login frequency if you are 8 platform hosted membership event attendance logs like zoom attendance etcetera for calls, it could look like the number of downloads or content views within a hosted website etcetera. Or it could be the number of community posts. Again, a little bit easier for a community manager to measure than if you are going at this on your own, but still very straightforward ways to quantify member engagement. 

16:31 And there I'm sure that within your own platform, you have several different ways that you can measure this as well. This metric doesn't necessarily tell you a whole lot on its own, particularly like I said, based on your membership format. But when we get to the end and I start talking about how all of these measures are in are interconnected, you're going to see this is a fantastic supportive metric to start looking at retention and the metric we're going to talk about next. All right so let's talk about that final metric and that is revenue per member, revenue per member, very easy to calculate total revenue divided by the number of members and look at it for any time period you want. 

17:15 And what we're measuring is the average income that you can expect from each member. And this takes into account your VIP passes, your up sells, your down sells this takes into account your renewal rate, etcetera. And so we're looking at your revenue prediction versus your acquisition cost, your pricing strategy and profitability. This gives us an opportunity to look for growth and where we want to manipulate the actual advancement and strategic placement of your membership, particularly within the larger ecosystem of your building of your business. And it gives you an idea of your package promotion opportunities. So revenue per member takes into account so many different things and becomes a real foundation for seeing what next step you can take in your membership. 

18:15 So for example, if you know that it costs 1$ 25 to acquire a new member, but your revenue per member is 50$ you can then take your overhead, right, the amount that you spend in your business monthly, divide that out by your number of members, add that in to the acquisition cost and take a look at whether your acquisition cost is really paying off on that. If you're paying 45$ per click, I'm sorry, per acquisition and your revenue is only 23$ per member on average, we might have an acquisition issue and then we're back to our retention because it really is a much less expensive proposition to keep a member than it is to acquire a new one. 

19:10 So all of these different things rely on revenue per member to give some context to this so let's talk about that interchangeability and how all three of these metrics work together. But first I need to preface this with the most important thing I need you to walk away from this presentation with, and that is that you must keep this simple. I specialize in working with clients who really struggle with managing their numbers, interpreting it and motivating to look at their metrics on a monthly basis. 

19:43 And inevitably, they come to me measuring too much and having overcomplicated the thought process behind each of these measures. So as I talk about the interchangeability and the the way that each all three of these metrics operate within each other, I do want you to keep the context of keep it simple in your mind because this has to work for you if you're ever going to use these metrics and actually do something with it. So as we move forward, think about how can I keep this simple for myself while still getting the information that I need. Ok, so let's start pulling all the pieces of the puzzle together and look at the power of combining these metrics. 

20:29 So all three of these metrics are connected i've been talking to you for the last 20 minutes about how that works, but how do we then interpret that connection? I've got a couple examples here. So let's say you have very high engagement you've got clients who are posting in your Facebook group you've got clients constantly logging into your platform, but you have a very low retention rate. They don't stay very long and they don't come back once they've left. 

20:56 Well, that could let you know that there's some really great short term value happening. Your people are excited to be in your membership, but long term they're not seeing the value. But what do you do with that? Ok, well, that's where the cohorts for retention come in. Do most of your clients leave after three months or after six months? Maybe they leave after 2 and a half months. Whatever that number comes down to you look at what's really happening for my members at that time. Just a great opportunity for starting to send out feedback about three weeks before that cut off point where people tend to leave. 

21:39 Start sending out feedback three weeks before that period and say, hey, how are you doing what's going on i'd love to know what could continue to make this membership valuable for you. You'll get so much feedback from that one outreach and you might see retention improvement simply because you're reaching out, but you'll also get information about how you can improve the membership at that point. But let's say that you have very high engagement, your retention is fine, but you've got low revenue, low revenue per member so that's really a pricing or upsell opportunity, right? So your people are staying around a hot minute, you've got high engagement, your client love your membership, but you are not hitting your revenue goals. 

22:28 That's when you can start to say, are there opportunities for upselling? Are there opportunities for me to increase the revenue of the clients I already have? Do I have an opportunity to increase the price of the membership without bringing down my retention rate? That's important. Anytime you make a tweak, you want to make sure you're not negatively impacting those other metrics. But when you have high retention and high engagement but low revenue, that's almost exclusively a pricing and upsell opportunity. 

23:02 And then there's high revenue but low retention. These are, of course, usually are higher ticket memberships. But this shows that you have an opportunity for increased feedback, feedback from your members and an opportunity to take a look at increasing the loyalty of your members. This likely means that you're fantastic at selling your membership. Beautiful value proposition on point Ctas, very clear messaging to your ideal client. Because you have high revenue, you're getting clients in the door. Your acquisition process is on point. So you also likely have an opportunity to run ads to your membership at that point, but you're not keeping your clients around. 

23:50 Ok. Why we can take opportunities to explore is it because we're not delivering on our sales promise or are we doing a lot of work upfront with onboarding client, but then we kind of stop holding their hand? Again, this is where retentions cohorts come in. Is there a point at which our clients start to drop off? I hope I've taken the opportunity to really demonstrate for you how each of these metrics is interconnected and how you can use even when you're looking at one metric, you can use the other metrics to provide context and additional details to then make more strategic decisions so once again, just to recap the top three metrics I want you to look at in your membership after you've finished all the amazing sessions today is your retention rate, but not just your churn rate every month. 

24:46 Where do your members start dropping off what's the percentage of membership at that retains for three months, six months and 12 months? I also want you to take a look at your membership engagement. What matters most to you and your membership format in terms of how you measure that brand loyalty that that engagement with your membership. And finally, the average revenue per member. How much do you actually make for a client that is in your membership? And I would absolutely love for you to stay in touch once again, my name is Kelsey Silver you can find me at <a href="kelseysilver.com">kelseysilver.com</a> You can also at me at pretty much all the social Kelsey E Silver don't forget the E and feel free to email kelsey silver dot com. 

25:31 It's been an absolute joy to talk to all of y'all today thank you so much for listening. If you have any questions, reach out. Hope you have a beautiful day.