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1.77M In Revenue From A 5% Retention Lift · Build With Becky: Smart Strategies To Grow Your Community-Driven Business

• 0:00
  It's no secret that I talk about retention a lot, but I think retention can be a super nerdy word that people really don't understand.
• 0:07
  And sometimes I'll be like, testimonial, like, we improved retention by 7%.
• 0:12
  And then people are like, cool.
• 0:14
  What does that actually mean?
• 0:15
  And so in this episode, I want to go through three scenarios, real examples of how much money revenue impact there is when we can improve retention by 5%.
• 0:26
  So, so what would a 5% retention lift actually be worth in your community?
• 0:32
  So we're going to run through the scenarios.
• 0:34
  Here we go.
• 0:35
  First, I need to share the rules of my math problem here.
• 0:39
  So we're going to assume that when we look at these numbers that everybody is starting with 88% monthly retention.
• 0:46
  Now, this is going to be modeled based on a monthly membership.
• 0:51
  So we're going to assume a monthly payment here.
• 0:54
  And we're not going to think about any new members joining.
• 0:57
  So we're just looking at existing, existing member cohort, and we're going to look at what the revenue impact is over the course of 12 months.
• 1:05
  So in the first scenario, let's say you have 100 members paying $80 a month.
• 1:10
  So you're so your monthly starting revenue is $8,000 a month, but then you're going to lose 12% of your members every single month because you have 88% retention.
• 1:18
  So that's $52,300 over 12 months.
• 1:22
  By the end of the year, you only have 22 of your original 100 members.
• 1:27
  Now, if we increase that to 93% retention, so a 5% increase in retention, you're going to end with $66,400 and 42 members.
• 1:37
  So you're going to make $14,100 additional and you're going to finish the year with nearly double the members still around.
• 1:48
  In the second scenario, let's say you have 500 members paying $50 a month.
• 1:53
  So, so your starting monthly revenue is $25,000 a month.
• 1:56
  At 88%, that's $163,400, ending with 108 members end of the year, end of 12 months at 93%.
• 2:06
  So a 5% increase in retention, we're at $207,600, ending with 209 members.
• 2:13
  So that lift is worth $44,200 extra in your annual revenue.
• 2:20
  The third scenario, let's say we have 1,000 members at $1,000 a month, and so that's $1 million a month starting revenue.
• 2:28
  This is actually a real Client example.
• 2:30
  So at 88% we have 6.54 million, ending with 216 members.
• 2:36
  At 93%, 5% increase in retention, we have 8.31 million, ending with 419 members.
• 2:44
  So that lift is worth $1.6 $77 billion.
• 2:50
  Okay, so obviously the higher revenue just has like crazy impacts, right?
• 2:55
  But across all of these examples, five points of retention increase is actually 27% more revenue, which is pretty crazy, right?
• 3:03
  And then in every single scenario, the 93% community ends the year with roughly twice as many original members.
• 3:11
  So we're talking about really crazy number of additional members in your community after a year by just increasing your retention by 5%.
• 3:20
  And this is so doable.
• 3:22
  I increased retention at Boss Babe by 5% based on changing things about our programming.
• 3:29
  And so you can do so much with your membership strategy and your engagement strategy to drive retention up.
• 3:36
  And if you focus on, on and this is what I'm talking about all the time, is if you focus on your member journey and your member experience and you really spend the majority of your time like nailing that
• 3:47
  experience, you're going to have impact on revenue because your existing members stick around longer, but because they're seeing success, you'll also have more word of mouth, which leads to product led growth, which leads to more people actually joining.
• 4:00
  And then to take this just one step further, if you're really focusing on experience and if you're really focusing on your programming, increasing retention, getting word of mouth, growth, growth, having people be successful and seeing results and all
• 4:14
  of this, your programming and the stuff you're doing inside your community, that becomes your marketing strategy and it makes growing the community a lot easier because you're focused on how can we create an incredible experience inside of this
• 4:28
  membership.
• 4:29
  Then you just open doors to your community and you say, hey, these are the things that we have going on.
• 4:34
  This is why you should join now.
• 4:36
  You're creating genuine urgency.
• 4:38
  Highly recommend my my episode on this around genuine urgency.
• 4:41
  I'll drop it in the show notes.
• 4:43
  But that is going to make your growth explode.
• 4:46
  So if you.
• 4:47
  When I think about like the framework that we use at Affinity, we start with architecting the experience.
• 4:52
  We want the foundations to be really strong.
• 4:54
  We want there to be a clear member journey because that leads to great retention.
• 4:59
  And then we want to activate members through wonderful programming that really keeps them engaged and helps them see success and you know, really drives quality engagement, quality connection.
• 5:13
  And then after that, after we have those things working great, so your retention is in a great place right, like if your foundations are strong, your retention's great, your engagement's great, people are seeing results, then we get to
• 5:24
  pour gas on the fire with the amplify stage and really scale your community.
• 5:28
  If you just listen to this and you're thinking, wow, I had no idea how I was sitting on this opportunity to improve my retention and actually make a lot more money, then please book a call with my team.
• 5:40
  It's a free discovery call.
• 5:41
  We'll talk about your community and see if there's opportunities and ways that we can help you.
• 5:45
  And if there is, we'll be able to audit and do a strategy and look at your data with you and see where you have opportunities to increase your retention.
• 5:53
  Because if you could get even a couple percentage points higher, you can see the kind of impact it has on your bottom line.
• 6:00
  So until next time, I hope you enjoyed this nerdy math episode.
• 6:05
  Keep building.