6 Essential Wine Club Metrics to Know

1. Calculating wine club member retention rate

Your member retention rate tells you how many of your members remained members during a defined period, expressed as a percentage.

Obtaining an accurate result for member retention rate requires excluding those members who joined during the period you’re examining from the total number of members.

How to calculate your wine club’s member retention rate for the current year:

• Take the number of active members you have today (we’ll call this Mend)
• Subtract the number of new members who have signed up this year (we’ll call this Mnew)
• Divide that number by the number of members you had at the beginning of the year (we’ll call this Mstart)
• Multiply the result by 100 to turn it into a percentage

Here’s how the member retention rate formula looks for a given period (image):

To calculate member retention rate, exclude sign-ups during the period being measured and divide the number of members at the end of the period by the number of members at the beginning.

2. Calculating wine club attrition, or club member churn rate

Another way of looking at your retention rate is to calculate your wine club’s rate of attrition, or churn rate, which is the percentage of members each year who discontinue their membership.

Wine club attrition rate is calculated by dividing the number of members who left the wine club during a given year by the total number of members at the beginning of that year.

For example, if you have 1000 members in your wine club at the beginning of 2023, and throughout the year you have 50 cancellations, your attrition rate is 50/1000, or 5%.

To calculate your wine club attrition rate for a given period, divide the number of cancellations during that period by the number of wine club members you had at the beginning of that period.

What is a healthy churn rate for a wine club?

Attrition rates can vary by geography and other factors. Using generalizations to judge your wine club’s health, is therefore not always the best approach.

You can determine the level of member attrition you are comfortable tolerating by considering both the rate of new member sign-ups and your goals for growth.

For example, an attrition rate of 15% may seem high, but if your acquisition rate is 25%, then you have positive growth of 10%. That sounds pretty healthy, but does it satisfy your stated goals for wine club growth?

Your wine club attrition rate can provide a helpful guardrail for guiding your member recruitment targets and for determining incentives for signing up new members.

3. How to calculate Wine Club average member tenure

Average tenure, the average length of time members stay in your wine club, is a useful figure to keep tabs on over time.

A long average tenure for wine club members is generally considered to be anything beyond five years, with the industry average fluctuating around the 30-month mark.

Club member tenure that stretches far beyond the industry average helps to put GMs at ease over your recruitment expenses, as well as budgets for club member events.

Similarly, this understanding helps you see the profitability of retaining existing members longer, over seeking new members.

An objective picture of the expected time horizon of your wine club’s members compared to the industry average provides good feedback on your retention efforts.

Average member tenure is simply the total of years your members (current and former) have been with your winery divided by the total members (current and former) your winery has ever had.

This number can be compared to your tenure at an earlier date, for example: taking a snapshot of your average member tenure three years ago.

To calculate average member tenure, take the total number of member years and divide it by the total number of members, past and present.

Alternatively, you could look at the average tenure for your active members and compare it to the average tenure for discontinued members.

4. Club Member Lifetime Value, Average Value, and Projected Value

The next few formulas come as a set, with each one being used to derive the value of the next.

Lifetime Value of Existing Member

The Lifetime Value of an existing member is simply the total of a member’s purchases since joining the winery.

The usefulness of this piece of data can be expanded by exporting your member list into a spreadsheet and sorting from highest value to lowest, placing your VIPs at the top of the list, and displaying those members who could use some nurturing at the bottom.

Average Lifetime Value of Members

If you take the total revenue of all your active members and divide by the number of active members, you can see the total value the average member has brought to the wine club so far.

Similarly, you could run this number for the current year and compare it to the same period in the previous year.

To calculate the average lifetime value of your wine club’s active members, divide total revenue of all active members by the number of active members.

Projected Lifetime Value of Members

Knowing the average lifetime value of your wine club’s members and your wine club’s average member tenure, you can easily calculate the average projected value of a club member over the entire course of their membership.

This is one of the more handy wine club metrics for you to know for your winery, as it can help you plan member perks such as pick-up events, as well as recruitment efforts.

The projected lifetime value of a wine club member can be calculated by dividing the Lifetime Value of Existing Members by the average number of years they’ve been members, then multiplying that by your wine club’s Average Member Tenure (which you calculated in formula #3).

To calculate projected lifetime value, divide the average lifetime value by average number of years and multiply by average tenure.

5. Cost of Acquiring Members (CAM)

How much does your winery spend to sign up and onboard a new member?

Acquisition costs should take into account all marketing activities geared towards building awareness of the wine club and its benefits, along with any printed materials such as membership applications and welcome packets.

In addition to these costs, there is the time spent by wine club staff to input new member information, send email confirmations, and mail welcome packets.

These costs should be broken out and designated as new member acquisition expenses for your wine club, which can then be tracked separately from ongoing wine club expenses.

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6. Cost of Servicing Members (CSM)

Knowing the cost of keeping your members when weighed against the value a member brings to your winery, can help you plan promotions, discounts, events, and benefits.

The calculation involves subtracting CAM (formula #5) from all other wine club expenses over a year, and dividing that number by the number of members.