How to Increase Lifetime Value of Member from $600.81 to $1,222.57 (+103%!)

I’ve talked for years about how retention is a key statistic for a farm share program. High retention means happy members, less work and marketing cost to maintain membership each year and it makes growth much easier!

There is also an argument I can make with math that makes it clear why retention is so important.

Here is a video describing the results:

Introducing Lifetime Value of Member

Lifetime Value of Member (LTM) is the measure of how much a member will spend with your farm over the life time of their membership.

Our newest staff member, Pablo is also a data guy so he has been digging into retention numbers on Harvie now that we have year-over-year data. We can compare that to data that came out of Member Assembler with the “CSA Farming Annual Report” that we did in 2014 and 2015.

In the 2015 Annual Report, we found the average year-over-year retention rate for CSA / farm share to be 46.1%.

For Harvie, we are seeing an average retention rate of 67%. That is a relative increase of 45% over a traditional CSA program.

This is a huge increase and validates the year of customer research that I did before developing the concepts that underlie Harvie.

So how does this translate to the bottom line or the “Lifetime Value of Member”?

So for a traditional CSA farm at 46.1% retention, on average each member will be retained for 1.29 years. Using the average cost of a farm share from the 2015 CSA Farming Annual Report of $465.75/year, the Lifetime Value of Member is $600.81.

For a Harvie farm share, to do a fair comparison I will use the $465.75/year and then add in 5% “delivery extras” sales because that is how much we see, on average, that members add to their share each week giving us $489.03/year.

At the average Harvie retention of 67%, each member will stay for 2.5 years. So the Lifetime Value of Member for a Harvie member is $1,222.57.

So this difference in retention takes the Lifetime Value of Member from $600.81 to $1,222.57. That is an 103% increase in LTM! Wow!

To be clear, this means that every Harvie member is worth twice as much a traditional CSA / farm share member.

Now take that increase, invest in marketing, invest in efficiency, invest in your employees, invest in your quality of life, or invest in spending time away from the farm with your family.

This is why I do the work I do. It is gratifying to see that my hunches and my research on how we can improve the profitability of CSA / farm share programs are being validated in the data.