Written by Michael Gillespie
In this Quarterly Edition:
QUOTE OF THE WEEK
“We’ve seen monthly memberships fall out of favor, but it doesn’t seem to be related to pricing.”
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What’s the biggest risk to a membership operator?
Reacting when no reaction is necessary.
It sounds simple, but it’s true. Operating a membership is a turbulent experience that’s full of noise.
Week-to-week and month-to-month changes in metrics are commonplace in this business, and knowing when to react isn’t an exact science.
But there’s one tool at our disposal when it comes to truly understanding what’s happening out there: Taking a quarterly view of what has happened to prepare for what can continue to happen.
Q1 of 2025 is officially over. So let’s make sense of it all and determine what’s worth reacting to.
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Does membership equal relationship? The data says yes.
If your customers viewed your product as an integral component of their lives they would likely:
Welcome to the new membership consumer: One that’s hungry for membership with the expectation of building a long-term relationship with your product.
Below is an inside look at membership metrics currently being seen by clients at Memberful.
Take a look at this chart:
Demand for quarterly and annual membership plans has been rising significantly since 2023, but has exploded in recent months. On average, quarterly and annual membership plans currently account for 67% of all active memberships.
If there was ever a signal that membership consumers want (and expect) a product that serves them over the long term, this is it.
More value delivered over more time at a predictable cadence is what today’s membership consumer wants. And they’re willing to pay for it.
The second piece of the puzzle is quite telling when it comes to the long term viability of quarterly and annual plans.
The chart below tells an important story. You’ll notice that the average churn for monthly plans, in general, is now higher than that of quarterly and annual plans.
What does this mean?
Membership consumers are flocking to longer term offerings which are proving to be more stable, predictable and profitable over time than monthly-renewing offerings.
Longer term plans are seeing declining churn while short term plans are seeing rising churn. And it doesn’t seem to be related to be pricing.
I don’t say this often, but this is something worth reacting to.
The accelerating adoption of quarterly and annual plans is giving us a crystalized view of where the opportunity lies ahead for membership operators. It’s a market shift that I’ve seen take place consistently with clients at Memberful and one that’s likely here to stay for the long term.
There are three core recommendations that I’ll leave you with that will help you take full advantage of the current dynamics in the membership market.