June 6, 2019 Danni Poulton
A lot of hard work, research, and strategic thought goes into developing ways to improve gym retention. But knowing the theory of how to retain members is one thing, and actually implementing that knowledge effectively is quite another. Let’s take a look at how to do that.
By looking at how hard gym retention can be, we can start to find more creative and actionable ways to improve gym retention. So let’s start at the beginning…
We’ve probably all got experiences of the difficulties involved in going to the gym… many of us will be all too familiar with the struggle to stay motivated, or even find the time in our busy lives to hit the treadmill. And when budgets are tight, extra “luxury” spending like gym memberships are often the first to go.
Here are some of the main reasons people quit the gym:
Time constraints; finding that magic hour before work (fighting the snooze button) or after work can be tricky, especially for busy people
Cost; research has shown that income is the biggest predictor of weekly levels of physical activity, suggesting membership costs can be a major source of attrition.
Delayed results; we are surrounded by media telling us that we can sculpt rock solid abs in no time at all, and there are lots of unrealistic expectations of how quickly people can see results. It’s also possible to put in lots of effort in an untrained way and quickly get frustrated that nothing appears to be happening. This can easily put member off.
The commute; if people don’t have local gym memberships they can easily be demotivated by having to commute to the gym, especially if this involves battling rush hour traffic.
The atmosphere; the gym atmosphere can be make or break for gym members. Overcrowding can cause a lot of people to quit, poor or dirty facilities or a competitive or unfriendly atmosphere can easily lead to people dropping out.
Isolation; lots of people go to the gym on their own or can’t find a regular gym buddy to go with. It has been shown that people are much more likely to quit the gym when they exercise on their own. In fact one study found that 95% people who joined weight loss programmes with friends completed the course.
Given the difficulties in retaining gym members it’s all too easy to fall back on customer acquisition as an alternative to solving your retention problems. People often join the gym powered by a rush of enthusiasm that “this time they’ll make it” and get that new more shapely body, or lose that weight, gain more energy and so on.
It’s much easier to generate initial enthusiasm for joining the gym than it is to keep that enthusiasm going week after week, month after month and (hopefully) year after year.
Take New Year for instance: people ride high on a rush of motivation fuelled by Christmas excess and a sudden collective interest in self improvement. But studies have shown that 70% of people who join the gym in January quit by May.
It can be tempting to think that most people quit the gym and so it’s a losing battle to focus on retention. However, it’s widely known in business that it’s actually 5 times more expensive to acquire a new customer than to retain an old one.
Despite this, more companies focus on customer acquisition than customer retention. Why is there such a big gulf between our knowledge of the benefits of retention and our actual business practices?
Let’s take a look at an analogy: let’s say you own a shop that sells widgets. So you pay for a sign that says “20% off all boots”. Sure enough, people start to come into your shop to check out your wares. They fall into three groups of people:
Group 1: customers who leave instantly without buying anything.
Group 2: customers who will buy one or two things and then you won’t see them again.
Group 3: customers who will come back time and again.
It’s no surprise that the members of group 1 and 2 outweigh the members of group 3. But that doesn’t mean there’s less value in nurturing group 3. For a start, group 1 may be the largest group but they’ll bring in no revenue at all. Group 2, might not even bring in enough to cover the cost of advertising to them over a sustained period of time. The cost of getting them through the door is much higher than for the loyal customers who already know and trust what you have to offer.
Retaining members, essentially means marketing to people who are already familiar with your fitness offerings and are more likely to buy what you’re selling than a random person off the street. Not only is it cheaper to retain existing gym members than recruit new ones, but improving fitness retention can actually bring in much more money for your gym.
Across most industries, boosting retention leads to a significant lift in profits. In financial services, a 5% increase in retention can increase profits by 25%. That’s because repeat customers tend to buy more products in their lifetime than one-off customers. That means that over time the operating costs of serving them decrease. And you also get a kickback when those customers refer you to their friends and family.
One study found that 60% of customers will recommend brands they are loyal to to friends and family. That’s a lot of unpaid marketing that you’ll get from focussing on improving retention and increasing your Net Promoter Scores. That’s why gyms are increasingly turning to customer retention tools to automate and streamline this lucrative process.
Repeat customers are also less likely to be tempted away by your competition because they have become familiar with your offerings and feel committed to your brand.
The benefits of gym member retention aren’t just financial, there are also significant marketing benefits as well.
A major aspect of effective advertising is knowing exactly what kind of audience you are serving. I.e, who is your ideal customer? But with member retention strategies, you already know who your customers are because they are already coming to your gym. This removes a lot of the guesswork from your marketing efforts. Research has shown that the success rate of marketing to existing customers is around 60-70% compared to just 5-20% success rates marketing to a new customer.
Some business are even focussing exclusively on retention. Here’s a quote from the founder of eCommerce seller Zappos:
“The number one driver of our growth at Zappos has been repeat customers and word of mouth. Our philosophy has been to take most of the money we would have spent on paid advertising and invest it into customer service and the customer experience instead, letting our customers do the marketing for us through word of mouth.”
If you want to see how improving gym retention can supercharge your revenue and improve your marketing ROI, book a Keepme demo today – it will be worth your while.