Retention Strategy: The Hunt to Keep Health Club Members
Mark Miller, the COO of Merritt Clubs in Maryland, shares the key to a great retention strategy and how to keep your health club members.
What number of cancels can you afford to lose each month? How many new net members do you need to hit your financial objectives?
Pick a number and write it down. I’m going to tell you how to get there by sharing what is working for the most successful companies and why.
Hunting: The Good, The Bad and The Ugly
Every organization should focus an appropriate amount of time on hunting for new members and for keeping the existing ones. Most however only focus on the new and forget about the current. Even worse, too few have a clearly defined strategy that maximizes their efforts.
There are three areas to consider when evaluating different initiatives:
- Effectiveness: which activities produced the most quality success?
- Cost: what were the tangible costs for each initiative?
- Time: how much time did it take to create and follow up on each initiative?
- Bonus: investment — how was this investment for the club?
In terms of the retention-based activities producing the most impact, the following areas are important to note:
- Staff Hiring: yes, whom you hire and how has a direct impact of retention and new members.
- Culture: people feel who you are more so than what you say you are.
- Member Journey: do you truly know what the journey is of your members?
- Member sales
- Member onboarding
- Daily operations
Even more compelling is to look at what is happening within these aspects of your clubs. It is referrals, referrals and more referrals that can sometimes tell us if our retention efforts are working or not. In fact, surveys have highlighted what the most successful leaders have known all along – referrals are one of the most effective tools for hunting for new members and leaders also know it is one of the best ways to retain members. The simple fact you are around people you know means you’re home and in your community.
Targeting Relevant Opportunities
Not all business is good business. It takes just as long to work an unprofitable opportunity, as it does a profitable one. The ability to understand the difference up front has a huge impact on success.
That is one of the hardest lessons for leaders and teams. Fewer than half of leaders assessed their organization as effective at targeting which opportunities to pursue, while only 9.4% gauged their team as being very effective.
Leaders understand both the value and importance of thorough and objective qualification – not just the front end, but throughout the member’s lifecycle and the business lifecycle. Retention is a process, not an event, and teams must be fully skilled in being able to answer:
- Is there a need my company can satisfy? How?
- Is it winnable? Can we own it?
- Do we want to win it? Or are we just doing it to check a box?
If the answer is yes to all – it is time to go!
A vitally important activity is managing existing members to grow relationships. Existing members, on average, spend almost 70% more on subsequent purchases than on their first. Additionally, it costs five to fifteen more times to locate, qualify and sell to a new member as it does to sell to an existing one. Also, if you lower your attrition rate by 5% it could mean an increase of 15% to your bottom line.
Those facts alone should prompt all organizations to examine the way they are managing and growing their current base.
Hunting in Packs
One of the most successful hunters in the animal kingdom are wolves. Unlike the other top predators, they hunt together in packs. Your team may not be trying to take down moose or elk, but in the fitness world, selling and retaining members is a strategy that must be employed regularly and not separately.
Simply put, teamwork is a collaborative approach involving the marshalling of your most important organizational assets to win – your people. Too many organizations separate these functions and base commissions or bonus on results that maybe driving the opposite of intentions.
The most impactful activities when “hunting as a team” include:
- Community outreach and brand awareness
- Selling – onboarding, service and retaining members
- Member experience
- Training and development
- Communications and in the know
Within these areas of collaboration, nearly 45% note effective communications across the team is a critical asset and skill for all. Do we truly equip teams with the knowledge, skills and tools to do it all? Or do we treat them as just cogs in a wheel?
In this new world, teamwork is nothing short of a survival skill. It is an absolute imperative.
Look again at that number you wrote down. Think about where your team is today and benchmark your organization’s current performance against some of the statistics from the companies most successful.
- Is your team effectively using referrals?
- Do they have a system for member experience and management?
- Do you have a comprehensive strategy in place to manage cross-functional teams?
- Is your team targeting the right opportunities, and looking for additional business within existing members?
Now is the time to reflect and dig deep into our club’s setup, architecture and thinking. Your future is too important. Fitness today will be ever changing, fast adapting and always a hybridization format. The hunt for our success and survival is more today than any other time before. The last year and a half showed us we are vulnerable, and yet we are important and essential. Build the latter and you will succeed.
The hunt for success and growth is on. May the odds be ever in your favor this year!