Welcome to our quarterly deep dive into the state of membership where we uncover trends, highlights and what’s moving.
The start of 2022 has proven to be a continuation of clear membership trends that emerged at the end of 2021. In a digital landscape that’s evolving rapidly, membership continues to be a reliable and stable revenue generator and we’ve seen the membership business model flex its stability in recent weeks.
Continued member growth
In Q4 2021, we saw a significant uptick in new member acquisition. This trend continued and accelerated into Q1 2022, even as consumers were coming off holiday breaks, returning to work, school and other routine schedules. At a time of year where consumer attention is typically harder to compete for, there was notable strength in new member acquisition across major membership categories - especially during January and February.
Resilience during headwinds
During the month of March, we saw significant amounts of uncertainty injected into the broader economic landscape which had noticeable effects on consumer behavior. Inflation and the conflict in Ukraine were two driving factors that caused consumers to become more cautious. These developments have moderated the areas of growth we noted in January in February.
While these macro developments have certainly impacted the membership landscape, we’ve seen the reliability of the membership business model truly shine as these headwinds have developed.
At this time, most of the impact we’ve seen has been strictly confined to new member acquisition. Member retention has remained steady, highlighting the resilience of membership along with its importance within a larger business strategy.
It also reinforces the importance of structuring member benefits in a way that really engages members on a regular basis. Memberships that are able to establish benefits into a member’s daily or weekly routine consistently experience less churn and much higher retention during periods of increased uncertainty - creating paths to sustainable income and member growth.
A new landscape
The membership landscape changes fast. The digital landscape changes even faster. As our customers explore avenues for continued growth, the importance of a diversified member acquisition strategy has never been clearer. Ad costs are rising. Social media engagement has reached a plateau. Consumers are becoming less receptive to traditional marketing and acquisition tactics.
Why is this? Over the past two years, we all spent more time online than we ever thought possible. This was a great period for content discovery and membership in general. However, this extended online experience has resulted in noticeable ad fatigue among consumers (your potential customers).
Audiences have been so exposed to poorly targeted ads for so long that they hardly even notice them now - much less, take action from them. Is advertising dead? No. But given the landscape, the economics and costs are no longer in favor of the advertiser.
We see the next chapter of membership growth being driven significantly by existing members. Authentic messaging, trusted opinions and first-hand experiences create immediate trust that drives action.
Our recent introduction of Referrals is our first step toward creating evergreen solutions that allow for leveraging the loyalty and satisfaction of your member base to generate new sales.
Customers using referral strategies are not only seeing lower member acquisition costs but increased member retention. This increase in retention is being driven by referring members receiving membership discounts when they achieve a successful referral.
Members who receive recurring rewards for referring others are significantly less likely to churn and are continuously motivated to refer even more members. Incentivizing your members with referral rewards allows them to go out and start the right conversations with the right people - leading to more sales at lower costs.
The changing landscape we’ve seen in Q1 clearly demonstrates the need for continuously building sustainable foundations within your membership. These foundations become a safe haven during periods of uncertainty and allow you to continue doing what you do best - run your membership with confidence.
As the membership landscape continues to grow and evolve, there will always be a constant source of leverage for growing, and that’s the foundation of your existing members. The continued focus on serving them first will establish a level of trust that ultimately translates to them becoming your biggest advocates.
Don’t lose focus on the seemingly small foundations inside your membership. It’s those small foundations that will bring you the biggest wins.