It is less expensive to keep a customer than to find a new one. I predict that you have read that or heard that statement before. In the fitness business, it is certainly true. This industry has historically seen high attrition rates. Some gyms even report losing more than 50 percent of their members every year.
Now, I normally write about sales, and sales is the most important thing you should be doing at any given time in your business. But a super close second is servicing your members. By servicing your members and upping your retention rates, it will be easier to sell more memberships. That is because happy members talk, whether it’s through Yelp! or Google reviews or word of mouth.
Although I don’t have a magic answer for you, after almost 20 years in this business, I can tell you the best practices used to create the highest retention rates.
Customer service. This should be obvious. Treat your customers with respect and they will keep doing business with you, right? Well, sure, I suppose that is mainly true. But in the fitness business you must do more than simply be nice and respectful to your members. I walk in and out of many gyms in any given week. I witness a lot of great things. Smiles, “hellos” and “how are yous” abound.
But I also experience some less-than-stellar situations. I can’t tell you how many times I walk into a 24-hour key card gym and get no greeting from the one employee who has his or her head buried in a computer. People join gyms for many reasons, and improving health and fitness is at the top. This situation is a no-no, and won’t help your retention rates.
Get to know your members and train your staff that customer service means going beyond what is typically expected.
Annual contracts. Unless your state doesn’t allow it, make a 12-month contract the staple of your membership plans. And even if your state allows longer terms, like 18 and 24 month, go with the 12 month. You can (and should) still offer a month-to-month membership option, but the key is to price your 12-month membership so it is much more appealing. Make your month-to-month option 25 percent more expensive.
In addition, annual contracts should not roll over into a month to month. At the end of 12 months, the member needs to come in (or go online) and sign up for another 12 months. This tip is often tough to get gym owners to understand. Studies have demonstrated that if a member renews for 12 months after the first contract ends, they have a much higher probability to be a long-term member. And if they renew for the third year, unless they move or die, they are likely to be around forever, providing your customer service remains high.
Visits, visits, visits. The magic number of visits per month is eight. This is the minimum amount of visits you need from each member every month. Studies show that if a member drops below eight visits, you start running a good risk of losing them.
So, how do you keep them coming in eight or more times? I recommend offering incentives such as “club bucks” or maybe some money off of membership. Some of my clients are even having success with negative reinforcement. If a member fails to visit eight times, they get hit with a fine. I think either strategy can work. Pick one and enforce it.
Those are some of the top ways to keep your member retention as high as possible. I want your goal to be 80 percent or higher. With a percentage of folks moving away and a percentage with money issues leading to defaults, you are unlikely to do better than 20 percent attrition per year. But going from 40 percent to 20 percent is possible, and will make a huge difference in your revenue.
With these strategies in place, your customers will be happier, you’ll get better word of mouth, and sales will be easier.
Email me at jason@jasonlinse.com with “retention” in the subject line, and I will share with you a super cool way to enhance your customer service experiences.
Keep changing lives.
Jason Linse is president and founder of The Business of Fitness, a consulting company. He also owns a personality assessment company called People Plus+ Fitness. He can be reached at jason@jasonlinse.com or at 612-310-1319. Visit www.jasonlinse.com.
Excellent recommendations especially hitting the # of visits. if members aren’t achieving those there could be other issues requiring attention such as gym cleanliness and weight organization. If the gym is an obstacle course of dumbbells on the floor or members don’t remove plates from equipment it frustrates your workout especially if the gym allows this to occur.