As a quick reference, when talking with a CFO on membership activity, I usually find the following benchmarks to be most important:
- Promotion Response Rate (PRR): The percentage of people who responded to a promotion.
Total number of responses / Total number of prospects contacted X 100.
- Renewal Rate (RR): The average percentage of membership that remains in a year
(Total Number of Members Today - 12 month new members) / Total
Number of Members in Previous Year
- Membership Tenure (MT): The average time a member stays a member.
1 / Reciprocal of Renewal Rate = .10
- Lifetime Value (LTV): The economic value produced by a typical member.
(Dues + Non-Dues Revenue) x MT
- Maximum Acquisition Cost (MAC): An estimate of the maximum investment that can be made to acquire a member or customer at a profit.
((Dues + Non-Dues Revenue) - (Total Servicing Costs)) x MT
Present these to your CFO to find out if they represent the metrics he/she is interested in. This is a great way to at least kick-off the dialogue.