The health and fitness industry is an extremely competitive marketplace. Operators spend an incredible amount of energy and resources getting people in the door. However, when it comes to retaining members, it seems a disproportionate amount of effort is spent trying to save them from leaving. This unbalance causes higher attrition rates and increases the pressure to sell more to cover the churn.
I have spent many years prior to my current role working as a consultant for a health and fitness analytics company. We spent hours upon hours studying how to improve retention. The one thing that became apparently clear is retention is not easy. It is hard work and can take a lot of effort just to see the slightest gains. However, there is an operational area that when given the proper attention can produce substantial increases in your retention rate and relieve some of the sales pressure. That area of operations is the process you have in place to retain members whose payment method have failed.
Most operators do not realize 50% of all churn is typically caused by failed payments. Surprisingly, most of that churn is involuntary. Failed payments are causing clubs to lose members who had no intention of quitting. In most cases, the member does not realize they missed a payment and their membership is terminated.
It is a sobering thought to think you are losing loyal members for no reason, other than your inability to reach and notify them of their failed payment. Simply sending out an email or placing a call is insufficient and would not be an acceptable process for sales leads. The irony is these are some of your hottest leads and should get the most attention.
So how do you reduce the churn and successfully implement a process to improve draft retention?
- Be 100% committed to the process. Assign appropriate resources and build accountabilities.
- These are mostly members who did not plan to miss their payments, so do not treat it like a collections call. It is a retention and sales initiative.
- Invest in the long game. One or two calls over a couple of weeks will not be effective. It takes four to five weeks of consistent follow up to be successful.
- Incorporate multiple forms of communications. You need a mix of calls, emails and texts to build a winning program.
- Be prepared to handle the inbound calls that are generated from your efforts. Make sure staff are trained on the correct “retention” messaging when taking these calls.
- If you centralize this process for multiple locations or outsource it, make sure you’re utilizing local numbers that correspond with club locations. In today’s spam crazy world, people are not likely to answer unfamiliar numbers, especially if they are outside of their area code.
With limited staff and resources, it can be overwhelming to execute and manage this process to retain existing members. The good news is there are vendors you can outsource this service to. Either way you choose — in house or outsourced — the results of a solid plan will significantly reward you financially.
