What is renewal lag? (and why your membership organisation should care)

Renewal lag refers to the length of time between a member’s subscription expiry and when they actually renew their membership.

In an ideal world, it should be zero, but we’re not selling in an ideal world.

There are four key reasons why knowing and understanding your renewal lag matters for membership organisations:

For easy maths, if your membership costs £60 per year, that is the equivalent of £5 per month. If your renewal lag is 3 months and affects 10% of your members (let’s say 10,000 members), then the lost earnings are £15,000. This matters when it comes to your year-end, and for many membership organisations, the value of this lag is significantly higher.

While it varies from membership organisation to membership organisation, most have an early/on-time renewal rate of around 45%. This means 55% of your database are not renewing on time, to some greater or lesser degree.

Every renewal lag is different, but using the same figures above (3-month lag, 1,000 members) that means you lose an entire year’s worth of revenue every four years. When viewed alongside your longstanding loyalty figures, renewal lag takes on a whole new meaning.

When considering retention rates, most organisations default to measuring a monthly renewal figure, monitoring like-for-like renewals each month. They also place a limit on renewal, such as 30 days post-lapse. This works for your CRM, but it misses the overall retention rate you might be securing.

For example, in January, you have 1,000 expiring members, and 740 renew, that means you have a retention rate of 74%. It is then measured as an annual figure too: 7,400 of 10,000 = 74%. However, when you consider the concept of renewal lag, and the potential that a % of members aren’t renewing for 3 months (or more!), you have the opportunity to measure database renewal rate as a % as well, looking not at a set 12-month period, but at the total retention rate.

So, for example, if a member joined on 1 January 2025, they would be due to renew on 1 January 2026. If they renew before 31 January 2026, they will likely be included in your retention rate. However, if their lag is 3 months, and they don’t renew until 30 April 2026, they will most likely be excluded from your retention figures.

Extrapolate this up, and it has the potential to add 5% or even 10% to your annual renewal rate when you compare it member record by member record.

The longer the average lag, the lower the overall retention rate will be, as members learn to live without you.

Knowing your renewal lag means you can deliver interventions to reduce it, which will ultimately increase your retention rate. It’s a win-win.

It is basic human psychology, and while we want people to renew on time, every year, real life gets in the way. Poor weather, a busy life, finances, health issues, plans not to use the membership in the coming weeks. These are all ways that members rationalise renewing “later”. They’re not motivated by your renewal figures, and they don’t care that they’re “late”, so expecting them to be on-time is irrational.

This is why knowing and understanding renewal lag is so powerful. It can help you to plan the right interventions at the right time, to encourage the behaviours you want to see. And no, that doesn’t necessarily mean running a discount or special offer!

Add to this that for consumer schemes, 10-20% of most membership sales are as gifts and renewal lag is powerful here too. Many memberships are bought as gifts, peaking in November and December.

As a result, the members may not know their exact renewal date, or even the cost involved.

There are four main ways your membership organisation can address the issue of a membership lag. Whilst these may not all be appropriate for every membership organisation, we recommend that at the very least, you look at cleansing your data to ensure that any communications are accurate and well-received by your members.

The more information you have about your membership, the more targeted your messaging can be. For example, you could create a series of marketing communications to move an individual from being a recipient of a gift membership, to subscribing of their own accord, or upgrading to a family membership (if appropriate).  

Similarly, a “making the most of your membership” series often has a significant impact on improving renewal rates and reducing renewal lag.

By automating this process, it reduces the stress on your membership team and allows your organisation to send some gentle nudges, that increase in urgency and the expiry date gets closer.   

These tactics can all keep engagement high and recover lost revenue.