Have You Tried This Calculation for Your Association?

By Amanda Kaiser posted 06-06-2019 07:32


Have you calculated the lifetime value of a member for your association? This exercise could lead to some very positive strategies for the organization overall.

It may be easy for a board member to assume that the loss of each new member is merely the cost of one year of membership. But the lifetime value of a member calculation tells us the cost of losing a new member is so much more. Perhaps you will find that members who stay tend to be members for 7 years. During those seven years, they get certified and attend a conference every other year. Each year they purchase the benchmarking survey and a book or two from the bookstore. We may find, hypothetically, that the lifetime value of a member is $10,000.

Now we can make the argument to the board that the loss of each new member is not just $375 this year, it is actually more like $10,000 over their lifetime or $1,429 per year for seven years.

So far we have not included the referral value each engaged member brings to the association. Active members tell potential members and some of those referrals become engaged members themselves. Every engaged member might be influencing another active member to join and engage bringing in another $1,429 per year so we could argue that the value of an engaged member is more like 2,858 per year.

And this does not include all the free work that members do. Members write and speak, and mentor, and contribute, and volunteer. These members might be saving the association $3,000 per year or more in fees they would have to pay staff or content creators. Perhaps the lifetime value of a member is more like $5,800 per year for this hypothetical association.

At a hypothetical $1,400 to $5,800 in revenues a year, engaging new members looks like an investment with a huge ROI. Can you adapt this calculation for your association to persuade leadership there is nothing more important right now than new member engagement?

Amanda Kaiser is a member engagement specialist for the association community. Amanda writes a popular weekly blog at SmoothThePath.net.