Retaining members can be challenging for any organisation. Ensuring members remain active by continuing to find value is key. As part of this, providing a seamless, efficient renewal process is vital to help reduce churn. So if you aren’t already, what’s stopping you from offering payment by Direct Debit for membership retention.
Streamlined Payment Experience
Direct Debit is convenient for members as it simplifies the payment process. It eliminates the need for manual payments (where the member has to take an action) and for frequent renewals (for example if cards expire). The membership organisation can ensure that membership fees are collected seamlessly and promptly. This reduces their admin and the likelihood of membership lapses due to missed or late payments. A streamlined payment experience thereby enhances convenience and reduces friction for members. By removing payment-related distractions, Direct Debit allows members to fully immerse themselves in utilising the benefits of membership, e.g. attending events and accessing content.
Payment Security
Direct Debit offers a secure payment mechanism that installs trust and confidence among members. When payments are set up through Direct Debit, sensitive financial information is securely transmitted, minimizing the risk of data breaches or fraud. This security contributes to member satisfaction and reassures them that their financial details are protected, increasing their likelihood of continuing their membership.
Direct Debit is a Preferred Payment Method
Direct Debit is a familiar, long established and widely trusted payment method. Approximately nine out of ten UK consumers will have at least one Direct Debit set-up. Pay.Uk statistics show that in 2022 there were 4.7 billion Direct Debits by volume in the year. Of these, 543 million Direct Debits were for subscriptions, including 41 million for political / trade union membership and 13 million for club / society professional membership. Supported by the Direct Debit Guarantee, individuals can be confident when paying via Direct Debit.
Personalisation and Flexibility
Direct Debit provides opportunities for offering different membership options, collection dates and frequencies. By offering monthly, quarterly, or annual payment options – on dates of the members choice – organisations can cater to individual preferences and financial situations. Flexibility in payment terms allows members to align their membership fees with their budget. This increases the likelihood of continued participation and reduces the risk of cancellations due to financial constraints.
If Direct Debits are cancelled in error, they can be reinstated by the organisation. Likewise, Direct Debits can be paused – for example if member circumstances change – and restarted later, thereby preventing possible cancellations.
Proactive Membership Renewals
Membership retention often hinges on timely renewals. With Direct Debit, businesses are in control. They decide when to initiate the renewal, send notifications and collect payments – all in advance of the membership expiration date. This proactive approach reduces the likelihood of memberships unintentionally lapsing due to oversight or forgetfulness. Seamless and timely renewals with Direct Debit helps maintain a high retention rate.
Reduced admin and cost
Direct Debit offers numerous benefits as a retention tool for the membership organisation, including:
- Direct Debit can be a cheaper payment method than others e.g. collecting membership by credit card,
- It is easier to reconcile failed payments using ARUDD reports (Advice of Returned Unpaid Direct Debits),
- ADDACS reports (Advice of Direct Debit Cancellation and Amendments) will update organisations if a payer chooses to cancel their Direct Debit,
- Direct Debits can be easily updated when membership amounts change – which is not the case with standing orders or cheques for example,
- Direct Debits will remain active until cancelled / for as long as necessary – which is unlike credit or debit cards that expire and must be replaced.
Direct Debit for Membership Retention
Using Direct Debit can positively impact member loyalty and retention. It helps ensure a streamlined and secure payment experience, provides flexibility in terms of collection options and dates and enables proactive and automatic renewals. Businesses that leverage Direct Debit effectively can establish long-lasting relationships with their members, ensuring continued participation. As membership programs continue to evolve, integrating Direct Debit as a retention strategy can be a valuable investment in sustaining member engagement and growth.
Contact us
Please contact us today if you have questions about how Direct Debit can support your organisation. We are here to help!