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We're pleased to present our quarterly dive into the state of the membership, where we reveal the latest trends, highlights, and other information that is moving.
The year 2022's beginning is proving to be a continuation of clear patterns in the membership market that were evident in the last quarter of 2021. In an environment that is evolving rapidly, membership continues to prove an solid and steady revenue generator and we've witnessed the membership business model flex its stability over the past few days.
Highlights
The growth of members continues
In the fourth quarter of 2021, we saw a significant uptick in the number of new members joining. The trend continued to grow and increased to Q1 2022 in the midst of consumers coming off holidays and returning to work, school and other routine schedules. In a period of the time when consumer interest is generally harder to get, there was notable strength in the number of new members joining across major membership categories - especially during January to February.
Resilience during headwinds
During the month of March, we experienced an abundance of uncertainty instilled into the economic landscape which had noticeable effects on consumer behavior. Inflation and the conflict in Ukraine were the two main reasons that caused consumers to become more preoccupied. These developments have moderated those areas of growth that which we observed in January and February.
These macro-trends are certainly impacting the world of membership, we've seen the reliability of the membership business model shine brightly as these headwinds have developed.
As of now, the majority of the change we've witnessed has been strictly focused on new member acquisition. The retention of members has been steady, highlighting the resilience of membership along with its significance within a wider company's strategy.
This also underscores the significance of structuring member benefits in a way that really engages members regularly. Members who are able to establish benefits into a member's regular routine experience lower churn and much greater retention in times of increased uncertainty - making it possible to sustain income and member growth.
What's moving
A brand new scene
The membership landscape changes fast. The digital landscape is changing even faster. As our customers explore avenues for continued growth, the importance of an encompassing strategy for acquiring members has never been clearer. Ad costs are growing. The engagement on social media has hit a plateau. Consumers are becoming less receptive to conventional marketing and acquisition strategies.
What is the reason? In the last two years, we all have spent more time on the internet than we thought was possible. This has been a fantastic time for content discovery and membership all around. However, this extended web-based experience has led to an increase in ad fatigue for customers (your possible clients).
The public has been exposed to ads that are not targeted many years that they don't even notice them now - and even less take steps to remove them. Is advertising dead? No. But given the environment, the economics and costs are no longer in favor of advertisers.
Member-driven growth
We are seeing the next stage of membership growth being driven significantly by existing members. Authentic messaging, trusted opinions and direct experiences help build trust , which drives actions.
The introduction of Referrals is the first step towards creating solutions that are evergreen which can leverage your members' loyalty and satisfaction members to drive more sales.
Referral strategies of customers do not only see less cost to join but more members staying. This increase in retention is being driven by referring members who receive discounts on membership when they make a successful referral.
The members who are rewarded regularly for referring others are significantly less likely to be churned and are always driven to refer more customers. Incentivizing your members through referral rewards allows them to take a trip and initiate discussions with the most relevant people. This leads to more sales at lower costs.
The Takeaway
The shifting landscape that we've witnessed in the first quarter clearly illustrates the need for continuous building solid foundations within your membership. These foundations become the safest place to be during periods that are uncertain and enable you to carry on doing your best work - run your membership in confidence.
The membership market is constantly evolving and growing it will remain a opportunity to grow as well as the base of your current members. Your continued commitment to providing them with the best service will build a level of trust that eventually leads to them becoming your biggest advocates.
Do not lose sight of the seemingly small foundations inside your organization. These tiny foundations that can bring your the greatest rewards.