Re: CSA Retention rates

[Leigh Hauter]

I have now been in the CSA business for over a decade in the DC area and have spent much of the time wondering what I should expect as a satisfactory renewal rate. and what made people renew or not.

My observations (these are all pretty obvious, once said)

production does matter. this is very obvious but renewal rates are higher after a successful growing season than after a poor one. But it accounts, at the most, for only a 10% increase.

Community is important. Generally speaking (this isn't true for everyone) the more a subscriber feels part of the program, the more likely they are to renew. The years we turn out a regular newsletter, have get together's at the farm, shareholders gleaning the fields, get shareholders to meet each other, those are the years the renewal rate is higher (but not much - less than 5%).

-in DC the idea of a working share is mostly unworkable. Subscribers work long days, traffic is terrible and even driving to our farm which is on the edge of the suburbs (40 miles from the city) takes over an hour. CSA's in our area that have a work share have very poor renewal rates and often pass quickly into history-

Consistency. A CSA must be run like a business if it is to keep its shareholders. Think of a restaurant, even your favorite restaurant. How many times of poor service or poor food does it take to stop you from coming back, even if you have been going weekly for years. A CSA must be concerned about the details. Deliveries on time, vegetables presented in very good conditions, Few crop failures, Availability of the crops that people want (ie you need to spend special attention on things like broccoli and tomatoes- believe it or not, the vast majority of people judge the success of a CSA on the plentifulness of those two crops more than any others). A subscriber might understand that spotted wilt wiped out your tomato plants but they more than likely will not renew if their life revolves around tomatoes.

Length of existence of a well run program. So, if the program produces regularly and works on community, the longer it is around, the higher the renewal rate. This is basically the winnowing process. CSA's sound neat but the truth is they aren't for everyone. Not everyone cooks (especially in the DC area) at home enough to use all the vegetables a CSA provides. Each year, though, our core group of renewers increases. Which means, each year we add a few more people who from experience actually match up well with a CSA lifestyle and don't just think that they will. I imagine this is true for the long lived CSA's around the country. They have built up a core of people who actually eat at home and cook. and like to eat vegetables.

There are also a few outside factors that affect renewal rates. Things like the local economy and who your market is. In DC we have a large transient community. People who come to DC to work for the government, lobby organizations or non profits. A number of these people know CSA's back home and sign up. Over the years, especially in the beginning, this was the core of our subscribers. But, the problem is, they don't stay long. They do their 2 or 3 years in DC, decide its better back home and leave.

This all said, I have experience starting two CSA's -- someone else's, a non profit organization, and our own. Both showed very similar renewal rate lines. Production, for a first year CSA is of course going to be spottier than a well established CSA. The growers haven't figured out the kinks of their land, their delivery system, what crops their particular subscribers like more of, how many of each and just the logistics of growing 50 plus crops a season.

First year CSA's (in the DC area), I've observed, usually have renewal reates in the 20-30 percent range. But, if everything goes right, the CSA is operated in a professional, consistent manner, the renewal rate should go up each year.

Our list of long time subscribers grows longer each year. I think our renewal rate was well over 40 percent last year and from all indications will be over 50 percent this year. These are, in part, the people who we know when they were single, remembered when they got married, when their first child was born and are amazed at how large their children are now. Our CSA is part of their life. I imagine, if we keep doing this for another decade (or two) then we will have gotten to the point where are subscriber list is filled up with these people.

One other point, when I managed the non profit program we had to take into our program the longest lasting CSA in the DC area. Because of a number of factors (most of them mentioned above) their renewal rate which had been high in the past was rapidly crashiing. In other words, just like a restaurant, no matter how long it has been established, poor management can destroy the loyal customer base.