Minimizing the Frequency of Delinquent Accounts

When it comes to handling delinquent accounts, a logical response is to remove the member’s access to your club and proceed through collections to get your money. However, as a boost to your club’s culture and retention, you should consider allowing members with delinquent accounts to keep their memberships, rather than chasing down their money.

“We want people to understand, yes, they’re in billing agreements and if they’ve missed a billing agreement, we’ll wipe that out if we have to,” said Dave Dos Santos, the CEO of Best Fitness. “We make sure we can start from scratch.”

That’s not to say members should get a free pass forever. “If several missed payments happen multiple times, it’s my job to follow the correct collections process, of course,” said Dos Santos.

Instead of burning bridges to get money, the onus should be placed on trying to retain long-term members while resolving individual billing issues. Being understanding of each individual’s situation is critical to this effort.

“There could be issues, and it could be as bad as two years ago, when there were tons of credit cards getting reissued,” said Dos Santos. “A lot of customers forgot which credit card they had their gym membership on and then, all of a sudden, they were in collections.”

You’ll end up making more money long-term if you turn delinquent accounts back into loyal members through great customer service during the billing and collections process. And any collections companies you partner with will play a huge part in turning potentially damaging collections processes into positive experiences. 

“I think it’s important for a collections company to allow you as the business owner to let a customer back on billing,” said Dos Santos. “You need someone who’s flexible with collections and understands the goal is to get delinquent accounts to be a gym member, not for us to be a debtor.”

The preferred collections company at Best Fitness is Swift Funds. “Swift Funds allows their customers to put any delinquent accounts back on billing if they choose,” he said.

Whatever collections company you choose, it’s important to pick one that resonates with your own values and understands the kind of relationship you want to have with your members — even the ones who owe you money.

“The most important thing is picking the right company,” said Dos Santos. “That company is basically an extension of your company. Do your due diligence in understanding what those companies’ core values are — hopefully, they’re aligned with how you want to relate to your customers.”

And at the end of the day — for your club and your collections partner — customer service is the name of the game. “It’s not always the best software that wins, it’s the best service that wins,” said Dos Santos.