November 14, 2019 Danni Poulton
There was a time when gym membership plans were all pretty much the same. But now there is a wide range of gyms on the market, with as many membership categories as there are calories in a protein shake.
So the big question you may be asking is, do membership categories affect your gym membership retention rates? Well, read on because we might just have the answer (spoiler: we do).
Broadly speaking there are two standard approaches to gym membership pricing plans, pay as you go monthly plans or annual plans, although day passes are often available.
Monthly plans are for members who are either watching their pennies or are unsure whether they want to take up going to the gym in the long term, so they’re testing the water. They may even only want to join for a few months to get slim enough to fit into that awesome dress they want to wear to a summer wedding, who knows?
Most gyms offer monthly plans because it still equates to cash coming in and some of those members will stick around for the long term. But on the whole, monthly plans are poor when it comes to actually retain your members over the long term.
In 2009, a study by Dr Paul Beford found that over 50% of new members on monthly contracts quit within the first 8 months. Within two years, 80% of them will have quit.
Some big commercial gyms factor this kind of “churn” into their business model, but it’s worth pointing out that it is much more expensive to acquire new members than it is to retain existing ones.
We’re not suggesting that you don’t offer these monthly plans to prospective members. In fact, the rise of pay as you go membership is contributing to the ongoing boom in the fitness industry in the US (more on this later). But it’s worth putting a focus on up-selling monthly subscribers to annual plans and putting effort into preventing churn from these at-risk monthly plan members, especially if you’re competing with more flexible rivals.
Annual plans put you on a much surer footing when it comes to boosting fitness membership retention.
70% of members will still be around by the 12-month mark, although this is probably because their contract is fixed and they don’t want to waste money by quitting early. So you’re certain to retain members longer with annual plans. But that doesn’t mean people will necessarily attend that much during their first year, and if they quit after a year you have to go through another round of member acquisition every year which is expensive and not very efficient.
Think of every annual plan you sell as a step in the right direction. But make sure you have a solid, customised retention strategy in place that works for all your members, whilst addressing their individual needs (more on this here).
But there’s more to life than monthly and yearly membership plans.
Gym memberships aren’t just defined by the length of the contract. That might mean something to your accounts team, but it means little to individual members. They want to know what your gym can do for them that will help them reach their fitness goals. And fitness goals vary from person to person. It’s common to offer package plans to members to help tailor their workouts to fit them, thus ensuring they stick around longer. Clever, hey?
A package plan could offer sessions with a personal trainer, VIP perks, product discounts, or reduced rates on long-term membership plans.
By tailoring your plans to suit your members, you’re ensuring that they will have a gym experience that works for them. But that’s only the tip of the iceberg in terms of how custom plans can help improve gym retention.
One of the biggest drivers of retention is how much interaction gym members have with other members and with staff. People who work out in groups are less likely to quit than people who work out on their own. So your membership plans should involve lots of opportunities for your members to be involved in the social life of the gym.
Puregym offers a “buddy access” bolt-on to their monthly or annual plans that allow a friend to join you at the gym up to 4 times a month. This is a great way to ensure members don’t work out alone and may lead to the buddy joining full time themselves.
If we’re talking about boosting retention then loyalty schemes are a great way to encourage this. Loyalty schemes can include free friend passes, personal trainer sessions, product and class discounts, and so on. Improving member retention involves motivating and incentivising your members where possible.
All data points to the fact that long term plans are better for retention. But before you ditch your monthly or day pass options consider the following…
In the past decade small, budget gyms have been muscling into the market share of big box gyms. Millennials are attracted to flexible fitness offerings, and have been leading a cultural revolution that has seen more and more people hitting the gym on a weekend than hitting the club. And research has shown that 36% of millennials pay monthly gym membership fees, double the amount of older age groups.
It’s important to be aware of this trend in the industry. Depending on the audience, your gym is catering to you may want to move towards more flexible pricing in order to capture this market of young professionals with money to spend, or else they’ll only go to someone who has offerings that suit their needs.
If this feels like an uphill struggle, you can use AI retention tools like Keepme to help improve gym retention. This will help you monitor individual members and assess their risk of attrition, as well as how favourably they view your club (their Net Promoter Score). This data can then be used to automatically trigger outreach campaigns to help improve the changes that members stay at your gym.
One of the main reasons people quit the gym is because their gym membership plan doesn’t work for them. You can do a lot to prevent churn by sending surveys to your members asking if they are happy with their plans, or if there is any room for improvement. By troubleshooting the member experience in this way, they will feel listened to, and will hopefully end up with a more suitable membership package. If that means tailoring a plan to suit individual members then so be it. The trick to gym retention is that you can’t take a one size fits all approach, you have to look at your members in terms of their demographic and their churn risk.
Keepme can automate this process, giving members a retention score from low to high-risk of quitting. You can then act on this data to improve your member retention.
So when it comes to how membership categories affect retention, you should pay close attention to monitoring the link between your plans and attrition. But the bigger task is not to turn away from members who are at high risk of retention like monthly members are, the point is to actually get to the root problems that lead to retention and fix them.
November 7, 2019 Beth Cadman
When it comes to gym membership, the job of retaining members is often harder than the job of getting new ones. It’s inevitable that some members will become inactive. They’ve not cancelled yet, but the chances are, if their inactivity continues, they soon will, whether it’s next month or next year. To work out the best approach to interact with inactive members, let’s first take a look at why members become inactive in the first place.
One you understand why your members are becoming inactive, you can then create a strategy to communicating with them and winning them back.
There are various factors that indicate at-risk members, such as:
You can prevent a lot of these at-risk members from becoming inactive by overhauling your gym retention strategy.
Using retention management software like KeepMe is a great way to do this.
It’s a dilemma; you have paying gym members, but they’re inactive. Their money’s turning up each month, but they’re not. If you contact them they may be nudged into cancelling sooner than they would have done, losing you revenue.
On the other hand, it’s probably just a matter of time until they quit because they’ve been inactive for so long. To do nothing is to ignore a churn risk.
But according to the IHRSA, any form of communication with an at-risk member can reduce the likelihood they’ll quit by almost 10%. So this means that doing something is always better than doing nothing.
You’re also much better off encouraging them to come back to your gym because then you’ll get the benefits of hopefully several years of membership, plus the extra money they’ll spend on additional purchases from apparel to fitness classes and training.
However good your gym retention strategy is, it’s still inevitable that some members will become inactive. But all is not lost, there’s still plenty you can do to win them back.
Research shows that if gym staff interact with gym members more than twice, then the chance they will churn decreases by 33%.
To communicate effectively with inactive members you need a comprehensive system in place.
You can use AI membership retention software like KeepMe to trigger a notification once a gym member becomes inactive. This can then trigger your re-engagement campaign, which could look something like this:
Create a segmented list of inactive members, picking out factors that may have lead to their inactivity. For example, if you have members that never signed up to a group fitness session, you could target them with a campaign encouraging them to join group workouts. This might motivate them to become active again.
Using segmented lists is very powerful, it can deliver 14% higher open rates than using lists that aren’t segmented.
It’s a good idea to have an email strategy set up from the start so that new members can opt-in to your email list. Make sure it’s tailored to give them info that relates to their fitness interests.
Regular, but not spammy, emails are a good way to reduce the likelihood of members churning. They also set up the expectation that your stays in touch with its members.
We suggest creating an automated email system with which you can reach out to people, say 2 weeks after their last visit.
You could send “we missed you” emails featuring offers that will entice inactive members back into action.
You could send an email that says something like:
“We’ve not seen you for a while. We know life gets busy, so we thought this might entice you back:
Alternatively you could send an email asking “are we getting it right?” so you can address any issues that may be a barrier to getting active.
If they’re complaining of a lack of air conditioning you could mention that you’ve recently had a system installed, and so on.
If your members have opted in to text alerts, these can be a great way to reactivate members. Send a text one month after a member’s last visit. You could send something like this:
“We’ve not seen you in a while. Is there anything we can do to improve? Fill out this short survey and we’ll offer you 15% off out range of fitness classes: [link to survey]”
Alternatively you could send them a special offer…
“It’s been a while. Can we tempt you back with a free extension to your membership contract? Call Karen on [number] to find out more.”
One-to-one contact can be a great way to engage members where possible. So it makes sense to use phone calls to get members active again.
When doing this it’s important that you know exactly who you’re speaking to, so that when you call them you know if they favour hitting weights, pounding a treadmill, or using the pool. E.g, “I notice you were fond of using the pool. I thought you might like to know we’ve just introduced a new pool based gym class you might be interested in.”
You should also design a script for staff to use. They shouldn’t read it off word for word, that will sound clunky, but rather the script should guide your phone team through how to interact with inactive gym members.
We hope this post has shown you the best way to interact with inactive members. Ultimately, it’s all about finding why your members are going inactive and creating a reactivation strategy tailored to their needs.
If you want to take the best approach to improving gym retention, consider finding out more about how KeepMe uses the power of AI to deliver the most effective gym retention solutions possible.