Metrics for measuring the performance of your membership program

August 22, 2022
Clara Holz

There are numerous benchmarks that membership subscription businesses can monitor to evaluate their business performance. Analyzing every metric can be time-consuming, so we reduced the number of data to eleven performance indicators that can give you a comprehensive picture of your business performance and success.

  1. Recurring revenue generated monthly

The monthly recurring revenue is the expected amount that members pay as a monthly fee. You can calculate this by multiplying the number of customers on your membership plan and the amount they pay monthly.

Knowing the financial performance of your membership plan is a reliable way to determine the effectiveness of your membership plan. With this analysis, you can make further plans for growth and improvement. And if your expected monthly recurring revenue drops, it becomes easy to know that your business is performing poorly.

  1. Recurring revenue generated annually

Just like recurring monthly revenue, your annual recurring revenue is the total amount you receive annually from your members for their membership subscriptions. You can estimate your annual revenue for membership by multiplying the number of customers and the annual fee for membership.

As expected, when the number of members for your membership plan increases, your recurring annual revenue increases also. However, if the number decreases as you progress annually, it means your membership plan isn't performing well.

The ability to evaluate the health of your membership plan in comparison to prior years and predict the effectiveness or flop of your membership plan over time are two major advantages of evaluating annual recurring revenue.

  1. Number of new members

The performance of your membership program can be gauged by the number of new members you acquire, which leads to an increase in monthly and annual revenue. To calculate your new membership rate, you’ll need to subtract the number of members at the beginning of a predefined period from the total number at the end of that period.

However, the number of new members you get may vary from time to time, so here are a few things you can do to help:

  • Monitor the number of new members on a weekly, monthly, and annual basis.
  • Observe your business trends to take note of periods when there are fewer or more signups.
  • When membership signups are low, increase marketing effort.
  1. Number of recent cancellations

The number of cancellations from your membership plan is another metric you can use to assess how well your membership plans are performing. It is vital to keep an eye on the rate of cancellations so that you can determine when a member leave, take appropriate action to get them back and avoid cancellations in the future.

Your chances of keeping members go up if you monitor cancellations at the appropriate time and way. With customized marketing techniques, you can reduce cancellations based on tendencies that can be extremely clear. Additionally, you might offer exclusive membership bonuses to boost retention.

The number of participants at the beginning of a specified period minus the number of participants at the end of that period is used to calculate the cancellation rate.

  1. The average lifespan of members

To determine the members' average length of stay or lifespan,  calculate the number of days, months, or years a member keeps their membership active.

The duration of some memberships plans may be for a month or year, while others may be lifetime memberships, regardless of how long your membership periods ideally should last. Keeping track of the average length of time your members remain registered for your membership plan will help you learn more about the performance of your membership plans. Paying attention to your customer lifetime value will also help you recognize patterns that are related to member cancellations so that you can proactively mitigate them.

  1. Renewal rate

To ascertain whether your membership plan is expanding as expected, monitoring your membership renewal rate is equally important. For several reasons, it's likely that some members will not choose to renew their membership. They might miss the expiration date, forget to renew, or decide against it because the plan is no longer valuable to them.

Your renewal rate is the ratio of the total number of members that renewed during a membership cycle to the total number of renewals that were due at that time.

You should be aware of the frequency with which your membership plans are renewed because it guarantees revenue stability and predictability.

A higher renewal rate per year would imply that there is a greater chance the brand would achieve its long-term financial goals.

If your renewal rate is low, you’ll need to put the effort into improving your it. To make sure you are still providing enough value to your customers, you can start by reevaluating what your membership options offer.

  1. The average number of orders and purchases

Understanding the purchasing habits and behavior of your members will help you determine the effectiveness of your membership strategy and plan. Dividing the total number of transactions made over a certain time by the total number of consumers that purchased, will give you the average number of purchases that are made per given period. Understanding the purchasing habits and behavior of your members will help you determine the effectiveness of your membership strategy and plan.

  1. The average amount  members spend

Your membership plans' capacity to generate a profit can be determined by an increase or decrease in the typical amount of money clients spend on purchases. Therefore, you can predict when you start to lose money when there is a Increase or decrease in the average amount that clients spend on purchases.

The entire amount spent by a member divided by the number of months per membership cycle equals the average amount spent by members.

Since a decrease in member spending will immediately affect your monthly and annual earnings, it is understandable that this is a cause for concern. It is important that you focus more on advertising and upselling at this time to encourage members to make more purchases.

Also, targeted marketing campaigns are still necessary even when members spend more money at one time in order to maintain a steady increase in revenue.

  1. How often do members utilize your gifts and the discounts you offer

You can have a better picture of how members are using their membership engagement by keeping track of which benefits are used more frequently, less frequently, or never at all.

If your members are enjoying the benefit, you must absolutely provide more of these benefits that they use. When it comes to benefits that don't get the attention of your members, you have two choices: get rid of them or make them better so that members still find them valuable.

The total number of members who have used a benefit will give you a  rate for usage. You can group your members based on their plans or how long they've been subscribers to your membership plan. By doing this, you can determine which membership categories take advantage of these benefits the most and which category uses it the least. You can also create a targeted marketing strategy for the membership categories that don't.

  1. Amount spent on gifts and freebies

While the cost for offering some benefits could be free or appear to be free, others might be hard to value financially, so you might end up paying a lot for those benefits.

There will always be a cost associated with providing members with freebies and benefits.  Your ability to spend the least amount of money while still offering the best benefits will influence how much money you would earn in profit, so you need to be aware of how much you spend on benefits.

Likewise, knowing how much you spend on gifts and freebies for your membership plan is also advantageous because it teaches you which perks are valuable and how to make informed financial choices. If the price is higher than what the gifts are worth, you can adjust accordingly.

By adding up all expenses associated with the membership benefits you have provided during a specific period, you can determine how much was spent on gifts and freebies.

  1. Profit made when customers take advantage of gifts and discounts vs amount spent on gifts and freebies

A critical part of tracking e-commerce metrics is by weighing if providing membership benefits like bonuses and gifts, is costing you money or bringing you profit.

To quantify the cost of providing benefits and the revenue from purchases made with those rewards, add up the profit made and the cost of the freebies and gifts that you offer in a specified period. You have lost money if your expenses are higher than your earnings. You'll need to change the benefits to options that will boost revenue while still giving value to your members. It's profit if your earnings are higher than the cost of providing these benefits.  


Choosing the right metrics helps business owners prioritize marketing activities, understand the pace at which their company is reaching its goals, and plan for the future with data-driven decisions that will affect their bottom line favorably. And using membership subscription solutions that give you deep-dive analytics of your business performance like Chargezen is all the more important.

Chargezen gathers data from multiple touchpoints to give you deep insight into your revenue, customer acquisition, user retention, and other SaaS metrics to help you double down on the positives, and eliminate the negatives.

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