Here’s what organizations need to know about the shifting behaviors and preferences of members and subscribers.
Data from IMPACTS Experience regarding 224 cultural entities in the United States suggests that membership renewal rates are down approximately 25% when compared to the pre-pandemic year 2019. While frustrating for organizations, this happening may not be altogether surprising: After all, the nation is still grappling with a global pandemic, many institutions suffered some amount of closure or capacity limits, children remain unvaccinated, and the future of the virus remains uncertain. Needless to say, these factors influenced membership renewals in 2020 and have continued to do so thus far in 2021.
Reliably, when membership renewal numbers decline, we generally observe professionals throwing every strategy and tactic at getting the numbers back up – from steep discounts to adding additional months to existing memberships to increasing membership benefits to anything in between (…especially those discounts).
But are these tactics a good idea? What are we seeing in terms of trends related to membership and subscriptions for cultural institutions, and what might leaders expect for the rest of the year?
These are good questions, and we’ve got data.
Here are a few key findings to help organizations think strategically as they plan for closing out the calendar year in terms of member and subscriber engagement. And, critically, to help them not to overreact with short-term “solutions” that may cause more hurt in the long run and actually stall recovery.
Even more than before the pandemic, members intend to renew when they next visit.
This finding isn’t unique to the pandemic. For the last decade that I’ve been working with IMPACTS, “intend to renew when next visit” has been the top response when we’ve asked lapsed members why they have not renewed. However, this reason has significantly increased during the pandemic and especially during 2021.
The research below contemplates responses from 1,309 self-identified lapsed members to cultural entities who haven’t renewed in the last two years. The research is populated by an advanced survey methodology process called lexical analysis in which we ask people open-ended questions and record answers. This allows us to avoid framing responses attendant to asking people to select from a list. In the lexical analysis process, responses from actual people populate the list – not insider experts brainstorming how to think like a visitor. In addition to the benefit of avoiding framing, this methodology also has the benefit of allowing for responses that leaders might not consider on their own. And when I first saw the data many years ago, one of those surprising responses to me was simply that these lapsed members and subscribers do intend to renew… they intend to renew when they next visit onsite.
Professionals may risk thinking that nonrenewals are all “membership problems.” In reality, they are much more often Visitor Engagement Cycle opportunities. Free admission is still a top benefit of membership, so enticing members to physically attend is often critical for renewals. People tend to renew when they visit – or when they know when they are planning to next visit.
If you’re a regular reader, then you may already understand the importance of onsite attendance for membership and subscription renewals. And you may even suspect that, given the pandemic, the percentage of people stating this response has increased. What has inspired us to share the findings now to inform the rest of the year instead of waiting until 2022 is the percent change in the sentiment in a short period of time:
Between end-of-year 2019 and the end of Q3 2021, there was a 36.4% increase in the percentage of people saying their top reason for not renewing is that they will do so when they next visit. But there was only a (still significant) 12.9% increase between end-of-year 2019 and end-of-year 2020 – what’s up?
What’s up could be two things: The first is the realization of loss of choice in terms of attendance. The pandemic remains ongoing, and it threatens a key membership advantage – free admission. In the past, a member could choose to buy a membership and it was up to them as to how often they took advantage of location-related benefits like special events or admission. But now that choice is threatened by external forces that have proven relatively unpredictable given closures, the variant, and some denying vaccinations. Any “freebie” year or exception year for renewing without visitation may have been last year – the first year of the pandemic. We’ve lived through how turbulent and unpredictable this pandemic can be.
The second reason for the increase in this reason for nonrenewal may be that Americans are learning to live alongside the pandemic, and visiting safely might be something folks believe will happen on a reasonable horizon for members again. For instance, this may reflect a “ready soon” posture dependent on things like child vaccinations or booster shots.
Remember: Members and subscribers tend to be older and more highly educated than general admission visitors on the whole. Educational attainment correlates with the belief in coronavirus safety protocols. These folks are impacted by – and are a group that has largely changed behaviors because of – the coronavirus.
But don’t react without thinking! Benefit complement factors are not a problem for the cultural industry.
Even more lapsed members in the United States intend to renew when they next visit – and they haven’t visited in the last two years. Thus, they haven’t renewed. That’s 60% of lapsed members who still want to renew!
From an internal perspective, however, cultural leaders see the outcome: Lower membership numbers. The result can be desperate failings of discounts, membership complement pile-ons, and anything else folks can think of to lure members back during this ongoing time of national uncertainty and strangeness. Discounts have negative long-term consequences for organizations, and any entity that has added a high-resource member benefit knows that it can be very hard to discontinue a membership benefit later! But research shows that benefit complement factors have actually decreased as a reason for non-renewals.
On the whole, the top reason why members aren’t renewing is due to factors related to an external reality (the pandemic), not internal, programmatic opportunities. (Although certainly, a little evaluation for individual organizations will help reveal if your own organization is dissatisfying its members and has particular opportunities.) For the overall cultural industry, research reveals that the issue lies largely outside of your walls, not inside them.
Membership renewals will likely be down for the rest of the year, but many lapsed members are planning to visit in the next six months to one year.
On the whole, the top reason why members haven’t renewed is that they intend to do so when they next visit – and more people are saying that this year than last. It brings up a good question:
So, when do those lapsed members who intend to renew when they next visit actually intend to visit? The data below contemplates 617 lapsed members who said that the reason they haven’t renewed is that they intend to do so when they next visit.
Only 23.8% of members intend to visit and thus renew within the next six months. That’s down from 34% at the end of 2019. A notable 76.2% of members intend to visit further out than six months or more from now.
Based on this information, it is likely that membership renewals will be down for the rest of the year. If things hold up and conditions surrounding the pandemic continue to improve, we may experience an uptick in membership renewals between six months and a year from now. That is, of course, if organizations are still working hard to get people to visit onsite and encouraging lapsed members to renew when they attend. More than in 2019, membership renewals are currently dependent upon visitation.
No doubt about it – members are a critical group to engage for pandemic recovery. These superusers tend to have higher onsite satisfaction, and they are also more likely to say good things to others about the entities to which they subscribe or are members. Though there’s reason to believe that membership renewals may remain down through the end of the year, it may be helpful to consider the value of understanding the tie between onsite visitation and renewals.
Not only that, understanding the shift in perceptions and behaviors surrounding membership and subscription renewals in the United States may help keep some membership teams out of bigger holes. In an attempt to encourage renewals – a good idea – we encourage organizations to be thoughtful and strategic about any membership benefit changes and make sure that any changes can be sustained without long-term negative consequences (or thoughtfully discontinued if need be). We also encourage organizations to be especially careful about discounting memberships. People associate memberships with supporting an organization’s mission, and we’ve seen that discounting memberships can be perceived as discounting an organization’s mission. We often see this result in a slow burn of long-term reputational problems that can gnaw at an organization’s financial bottom line over time.
Keep strategizing! Be thoughtful about any approach you take to encourage membership renewals right now, and understand that the key factors influencing these renewals may be external to your organization rather than membership product issues.
IMPACTS Experience provides data for the world’s leading organizations through workshops, keynote presentations, webinars, and data services such as pricing recommendations, market potential analyses, concept testing, and Awareness, Attitude, and Usage studies. Learn more.
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