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.