Alex Wolf, the VP of customer success at Swift Financial Services, shares why gyms need a strategic cash flow recovery framework — especially now.
Gyms are finally opening their doors — and that’s a good thing. But despite the coast to coast reopenings, 17% of fitness facilities and studios wound up closing their doors for good last year — and more than 1 million industry professionals lost their jobs.
The end result? The landscape is permanently changed, and gym owners and leaders need to reimagine their workflows and member experiences to keep pace. That starts with integrating a strategic cash flow recovery framework that ensures you’re driving new, incremental and lapsed revenue streams, even with lean teams and increasingly limited resources.
Where it starts: getting members back on draft.
Central to a successful cash flow recovery is reimagining your approach to collections. Today, it’s not about going after past-due members — take that approach and you’ll recoup on average about 20% of late payments. Tap a third-party collections agency and you’ll lose a percentage of those funds right off the top. Tap your in-house team and you’re pulling them off the floor, where they could be engaging and up-selling existing members. It’s a lose-lose situation.
You’re also, likely, losing that lapsed member for good.
Ideally, look for a strategic cash flow recovery partner who focuses solely on the fitness industry. This industry’s businesses, workflows and member expectations aren’t the same as credit card companies, hospitals or other collections-heavy verticals.
These fitness-focused partners will help not only streamline your processes and keep your teams on the floor, but will also customize strategic options to get your former members back on draft. That could include a customized forgiveness program or other incentives to re-engage people who want to come back but wouldn’t see a path back through the door otherwise.
Shoring up member onboarding.
Successful cash flow recovery partners also look at existing member onboarding processes, ensuring you have the right and sufficient information to avoid hitting a snag during monthly drafts. Too often, lapsed payments come down to expired or canceled credit cards or a bank account change — it’s almost always avoidable, and with a better cash flow recovery approach, can help gyms keep revenue flowing.
Understanding the human side.
The final piece of successful cash flow recovery? Understanding the human side of things — again, where having the right partner comes into play. From the cash flow recovery vantage point it’s not about shaking the past-due member tree and hoping for the best. Instead, it’s about creating meaningful, personal relationships with gym owners, staff, members and lapsed clients to build an effective, efficient ecosystem that drives new, incremental and ongoing revenue — today and tomorrow.
Traditional collections takes a short-sighted approach: collect past-due payments and move on — but that approach completely overlooks the incremental and unexpected revenue stream these former members represent. For some gyms, that can represent tens of thousands of dollars — or even more — in recurring monthly fees. By re-examining your cash flow recovery approach — and bringing in a strategic, gym-focused partner to handle the heavy lifting — you’ll shore up cash flow and curb all-too-common financial bumps in the road.
Stay ahead in the fitness industry with exclusive updates!
Alex Wolf is vice president of customer success for Swift Financial Services, which provides targeted collections services exclusively for gyms, wellness studios and fitness facilities. Contact Alex at 347.943.6668 or info@swiftfinancial.fit.
