The Business of Retention
“Retention is everyone’s business.”
These words from Kristen Green ring true for every club in the industry. Of course, the mission is to help people achieve healthier lifestyles, but the business boils down to keeping as many people coming through the doors as possible. Subsequently, this means minimizing the number of people who leave.
“Clubs who understand the importance of retention ensure that the culture of the organization is intentionally designed to maximize the member experience,” elaborated Green, the executive general manager of Aquafit in Australia. “Member retention is a deliberate strategy, one that all team members are aligned with and completely buy into.”
An important aspect of the retention equation includes an understanding of the role member relationships play in retention. The more closely connected a member feels to your club, the less likely they are to leave.
“If our members are faced with the decision of staying a member or leaving, make sure they are leaving a relationship, not just a monthly bill,” said Joel Tallman, the president and CEO of MÜV Brands. “Those relationships come from being friendly and providing service from all our associates.”
In fact, the goal of establishing strong relationships and delivering superior service is to make the club one of the most important places in a member’s life.
“There are a lot of little things that play into retention, but we’re really working hard to be the ‘third place’ for people,” said Frank Lawrence, the CEO of The Athletic Clubs in Central Arkansas. “Typically, home is the first place, and work is the second place. We want the club to be the third place.”
But before you can establish your club as the “third place,” it’s important to understand how a club could become the last place a member wants to go.
Why Members Leave
Attrition, the yin to retention’s yang, is inevitable to a degree. Many members leave a gym due to factors outside of your control, so your operational response should be finding ways to minimize the number of cancelled memberships caused by factors you can control.
In his experience, Lawrence has identified five primary motivators that lead members to leave a gym. “I call them ‘the five Ds,’” he said. “The No. 1 reason people leave is dislocation — they move or they’re moving outside of our trade area. Debt is the second reason — people have a financial event in their lives, like losing a job.”
The next three reasons are less common, but are still legitimate reasons that can lead to a cancelled membership. “No. 3 is divorce, which can also be defined as a family situation,” said Lawrence. “No. 4 is when people are disabled — they get injured and are unable to use the club, so they put their membership on hold or leave. And finally, there’s dissatisfaction — we don’t see much of that or we don’t get a whole lot of that feedback, but it does happen. Obviously, you can’t please everybody.”
And according to Green — beyond moving or a financial hardship — most reasons for a cancellation can be summed up in one simple answer: unmet expectations. “At a deeper level, any primary reasons are often due to a disconnect between member expectations and actual results,” she said. “These are members who have lacked progress and motivation in order to achieve their desired results.”
Helping members reach desired goals is a major focus for MÜV Brands, and this focus plays a major role in the brand’s high retention rates.
“Our real focus is, ‘Results equals retention equals referrals equals revenue,’” said Tallman. “Members don’t leave clubs where they reach their goals and are happy with the results.”
Another key component of the retention equation is engaging programming that will get members invested in your club beyond the “at risk” point.
At The Athletic Clubs, Lawrence is an advocate for creating a “sticky” environment, meaning members are involved in so many programming types, it’s difficult for them to leave the club behind.
“We want members to have three-plus different types of relationships with us,” said Lawrence. “We want people to be a tennis player, we want them in our Group X classes, and we want them to work with a personal trainer — that way, they’re ‘sticky’ in their relationship with us.”
At Aquafit, group programming is the stickiest, specifically Group X and small group training (SGT). “Although the programs are different, the reasons for greater ‘stickiness’ are the same — Group X and SGT encourage social engagement, both with other like-minded members and with a regular instructor,” said Green. “Member-to-member connection is a key driver in retention.”
MÜV Brands also uses the group mindset to drive participation among members, offering a full suite of branded programs that foster connection: MÜV It & Lose It weight loss challenges, MÜV Tribe HIIT, MÜV Barre, MÜV Cycle, and much more.
“All of this programming helps create community, develop relationships and deliver the results our members are looking for,” said Tallman.
But having “sticky” programming isn’t the whole solution for retention. It’s also important to have the tools to measure member satisfaction as a whole.
“As the saying goes, ‘You can only manage what you can measure,’” said Green. “Three important measurements in assessing member retention are the actual retention rate, member satisfaction and level of attendance. Research shows a member who has low attendance is more likely to drop out and cancel their membership. The sooner we can identify this, the greater the opportunity to re-engage them.”
There are several member engagement technologies and software solutions clubs can utilize to track their members’ satisfaction levels.
“Understanding how your members are feeling and what they are experiencing when they are in your facility gives you the opportunity to intervene and make changes if required, before a member chooses to leave,” said Green. “At the very least, members feel acknowledged and valued when their opinions are heard.”
Both Aquafit and The Athletic Clubs have put the Net Promoter Score (NPS) to work for them, using it to gather data on member satisfaction.
According to Green, the NPS data powered by TRP software has been critical for better understanding and meeting member needs. “Using detailed NPS feedback and comments allows you to gauge the mood of the club and members,” she explained. “And where there is a potential issue, you can intervene directly with the member to attempt service recovery, and regain the confidence and trust of the member.”
At The Athletic Clubs, better NPS statistics have indicated higher levels of member engagement and lower attrition rates over a sustainable period.
“As we’ve seen our NPS improve and we’ve seen the feedback improve, our attrition rate has continued to improve over a five-year period,” said Lawrence.
Another tool Lawrence and his team have used to great effect is Listen360’s customer engagement software. “It has allowed us to have these conversations with our members in a different way,” he explained. “It gave them a different avenue through which to engage with us.”
To measure its member satisfaction data, MÜV Brands turned to MXM. “We use MXM to monitor the feedback of our members in all areas of our operation,” said Tallman. “MXM helps ensure things are running smoothly, and warns us if we are not performing well in certain areas.”
Regardless of the technology solution you choose, it’s important to have a system in place to constantly monitor — and give you the ability to promptly respond to — customer feedback.
Keep Them Around
The common tactic all three clubs use to achieve high retention rates is member engagement, especially through their various programming options.
“Clubs that have members using a wide range of facilities and services will have a higher retention rate than those clubs with members who use one service only,” said Green. “The greater the engagement opportunity with staff and other members, the greater the opportunity for higher member retention.”
Connections are key. Members want to feel a sense of belonging in your club, so it’s up to you to deliver the experience they’ll want to keep coming back for.
“You’ve got to always be relevant, which means you’ve got to constantly be examining and reinventing your offerings,” said Lawrence.
To aid in his decision-making, Lawrence uses what he calls the “three-legged stool,” which he said measures his clubs’ relevance. “You constantly have to be reinvesting in those facilities,” he explained. “You’ve got to be reinventing your space on a consistent basis — that’s one leg. The second leg of the stool is constantly reinventing your programs so you’re relevant. You have to have the programs to fill up those facilities. And the third leg of the stool is telling your story, whether that’s through social media platforms, direct mail, digital advertising or some form of marketing.”
Remember, retention is everyone’s business. However you decide to develop your programs, measure satisfaction or tell your story, make sure it’s through the lens of what your members need. Your retention rate will be the beneficiary.