The Membership Guys

Tips For Dealing with a Downturn in Your Membership

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Are you experiencing a downturn in your membership?

A downturn could be when you see a decrease in sales, an increase in cancellations, or a general ‘slowdown’ of your overall growth rate.

When this happens it can be incredibly scary, but there’s no need to panic.

It doesn’t necessarily mean that your membership is failing and thankfully, there are ways that you can deal with a downturn so that you can turn things around.

So, here are our top tips to help ensure that your membership survives this ‘downturn’ period:

1. Assess whether it’s a “downturn” or a “dip” 

Before you give into your internal dread and overreact, you need to make sure that you’re not getting worried for nothing.

To do this, you’ve got to objectively assess the situation to decide if it’s actually a downward trend or just a “dip” in your numbers.

If you’ve become accustomed to getting the same number of new signups each month, but then one month you have a few less signups than normal, that’s likely just a dip and not a sign that your membership is headed for a downturn.

A downturn is something that happens over time. It’s a trend that continues to gain momentum over a period of months.

Rather than hitting the panic button and thinking the worst, you need to look at the hard facts first.

Dig into the data and take an objective look at the big picture.

Are there any obvious causes?

For example a drop in revenue could be caused by a drop in sales or a decrease in retention – but it could also be caused by a higher number of failed payments, or even just a shorter month!

After all, there are almost 10% fewer days in February than in March – so don’t be surprised if sales figures drop by that same percentage during that month.

Sounds silly, but these are the things you need to explore first.

And you also need to look at whether there are any significant changes you’ve made recently that might be throwing your figures off.

Have you stopped running ads? If you’ve stopped advertising your membership and your sales dried up, maybe you should think about starting them up again?

Or, maybe you’ve recently raised your prices?

Has a key affiliate stopped sending referrals?

Any of these things could influence your monthly performance.

If you’re lucky then with a little objective analysis you’ll be able to determine: a) whether this is just a temporary dip or an actual downward trend and b) whether there’s an obvious cause that can be easily remedied.

2. Get some context and clarity

Is your membership really experiencing a downturn, or have you just fallen short of your own expectations?

Your expectations must be aligned with reality.

If you’ve just started a membership recently, you have a fairly small audience and you expect it to grow by 1000 new people each month, you’re probably setting your expectations too high.

Being completely objective and getting some context by assessing whether your membership is facing a downturn or it’s your own expectations that need adjusting is crucial.

Something that I see time and time again is when someone sees a spike in their churn rate.

They immediately assume that their membership is in trouble when in reality, that sudden spike in churn was preceded by a spike in sales.

There will always be a percentage of people who join your membership, only to leave within their first month.

To illustrate: let’s say 5% of your members drop out in their first month. So, if you get 100 sales for one month, you’ll lose 5 of those people by the end of that month. If you get 200 sales the next month, you’ll lose 10 people.

If you just focus only on the number of cancellations – then you’ve had twice as many people leave – that’s bad, right?! Time to hit that panic button!

But of course you’re not looking at the whole story.

You’re seeing a jump in cancellations and assuming that your churn rate is up and so everything is falling apart.

However, with more context, you’ll see that sure, you’ve lost a few people this month, but it’s because you’ve got higher sales.

Before you conclude that your membership has hit a downturn, you must question what it is that you’re basing that interpretation on.

3. Has this happened before?

If you’re confident that your membership is in the throes of a downturn, it’s worth thinking about whether this has happened before.

Could it be a seasonal occurrence?

It’s possible that you’ve experienced a decrease or even an increase in revenue around the same time every year.

For example, if you launched your membership in September and you got an initial influx of members at that time, you’re likely going to see a revenue spike every September as that’s when a lot of renewals will take place.

Looking back and analysing patterns is a great way to help identify whether it’s a recurring event or part of a downward spiral.

4. Dig deep to find the root cause

If you come to the conclusion that you’re dealing with a downturn in your membership, you need to distinguish the root of the problem.

You need to find the cause. If it’s not obvious and you’re not sure why it’s happening, you need to ‘dig a little deeper.’

Look closer at your numbers and try to triage the situation.

If your sales are down, then you need to look at each stage of the funnel: is it a traffic problem, a lead generation problem, or a sales conversion problem?

You won’t know until you dig deeper.

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And remember that often when it comes to memberships, the impact of what you do today won’t be revealed for several months.

This is why it’s so important to look at your numbers on a much broader scale.

A downturn today could be the result of something that happened weeks or even months ago.

It’s your job to figure out what and get more context so that you can determine whether you’re in a downturn right now, or if it’s just a temporary ‘blip.’

Finding the cause is about going into the trenches and working out exactly what went wrong along the way.

Think about any major changes you’ve made over the past few months and remember that there is a “lagging effect” with memberships. A change you made five or six months ago could only start to have an effect now.

Look at the data and establish a timeline of major changes accounting for the lagging in performance.

Doing this will help you to pinpoint the issue so that you can work on it and hopefully bring your membership out of this unfortunate downturn.

It’s also worth getting feedback from your members – particularly those that have left your membership.

I know, it’s grim talking to someone who clearly didn’t think your membership was worth the investment, but their feedback is essential because it helps you learn more about what you can do to improve it.

If it’s clear that your membership is experiencing a downturn, you need to go back, dig into data and feedback and really assess what’s happened in the last few months that could be the root cause of the issue.

Once you know the cause, you can begin to formulate a plan to help remedy the problem and turn things around for your membership.

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