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A Retention Dilemma: Should I ‘Wake Up’ My Inactive Gym Members? - Keepme Blog

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A Retention Dilemma

A Retention Dilemma: Should I ‘Wake Up’ My Inactive Gym Members?
September 16, 2019 •

A 2017 survey found that people in Britain were wasting an incredible amount on gym memberships that they aren’t using – up to £558m a year! In that same survey, more than one in 10 people say they hadn’t attended their gym for a whole year, despite, in many cases, having already paid for membership for that period. And this bad habit isn’t just confined to the English: a 2018 Australian survey found that $1.8 billion a year is being spent on unused gym memberships, and broader data from the Statistic Brain Research Institute found that about 67% of gym memberships go unused!

Gym

For a business who wants to improve their customer retention rates, these inactive gym members present a unique challenge. While you haven’t yet lost these members (they are, after all, still paying for your subscription), they are also clearly disengaged, and present a high risk of churn. This article explores the best way to approach inactive gym members, and puts forth an argument for ‘sounding the alarm’, rather than ‘letting them snooze’.

The Case Against Waking Up Inactive Members

Some people argue that inactive members should just be left to ‘sleep’, and that the value of their membership can be enjoyed as long as they do not cancel their subscription. In fact, the entire business model of some fitness facilities is premised entirely on gym’s confidence in people will not use the membership that they are paying for – Planet Fitness has about 6,500 members per gym but can only really accommodate about 300 people exercising at once!

However, the KeepMe team of retention specialists would argue that such a business model is fundamentally untenable, for two main reasons.

Firstly, charging somebody for a service that they clearly are not using is ethically dubious. Even if it is not feasible to ensure that each and every one of your members is making the most of their gym membership, someone who is paying for a gym membership they aren’t utilising at all should raise some red flags. There are many reasons as to why people might not be attending the gym, ranging from injury, to technical billing errors, to unfortunate life circumstances such as family emergencies or tragedies. Would you feel comfortable profiting off someone who is ‘wasting’ their gym membership because they’ve had a death in the family, suffered a serious sports injury, or feel too intimidated to attend the gym? If your answer to that question is ‘no’, then there’s already a strong reason for you to inquire after inactive members.

Secondly, even if you are still enjoying the revenue gained from inactive members, this revenue source is simply a ticking time bomb.

Time

Customer engagement is essential for retention, and an inactive member is not an engaged member. Thus, if you ignore an inactive member, losing their business is virtually inevitable. After all, people will not pay for a service that they get no value from. So, whether or not an inactive member cancels their membership at the end of their fixed contract period or when they next review their recurring payments, the fact is that they will cancel, and you will lose their business… unless you do something to change that.

3 Reasons Why You Should Wake Up Inactive Members

Thus, relying on inactive members to bring in revenue is not only morally dubious, but is also simply not an effective way to grow your business and increase profits. In contrast, boosting your retention rate and maintaining strong customer retention is an effective and sustainable way to do that. After all, it costs five times as much to attract a new customer than to keep an existing one, and increasing customer retention rates by 5% increases profits by 25% to 95%!

There are three main reasons why meaningfully waking up your inactive members can serve to improve your customer retention, and consequently, improve your business prospects.

Firstly, inactive members undermine the sense of community at your gym, which will in turn undermine retention. Dr. Paul Bedford (of ‘Retention Guru’ fame) found that many customers actually desire a sense of belonging and community when they join a gym. If you have too many inactive members, it’s extremely unlikely that you will be able to cultivate a strong sense of community within your gym. This will harm your retention efforts in the long-run.

Secondly, failing to wake up inactive members will result in strong customer dissatisfaction. Nobody likes to feel like they’re being ripped off, and even if you didn’t have any negative intentions in waking up your inactive members, such bad intentions might be read into your actions nonetheless. This is bad, since up to 67% of consumers list bad customer experience as one of their primary reasons for churning. Furthermore, even beyond losing these scorned members’ business, the worst case scenario is that they will turn into active detractors of your brand, and scare off potential new customers! In contrast, proactively touching base with your inactive members, and perhaps even giving refunds where appropriate, will leave a good impression of your brand. A good impression can go a long way — not only might it convince an inactive member to re-engage and continue to do business with you, but a good reputation will indisputably attract new members to your doors.

Finally, it is important to address the issue of inactive members because inactive members make it harder for you to make informed business decisions. For example, although inactive members are still technically a part of the gym, allocating gym resources (e.g. class slots/equipment) to them is an inefficient use of capital. The presence of inactive members will also make it more challenging for you to accurately ascertain your retention rate, member satisfaction, and member loyalty. Without getting a clear picture of your customer base, it is difficult for you to make good decisions about how to cater to them. You’d be better off with inactive members re-engaging, or even leaving the gym altogether.

Conclusion

Unlike the age-old idiom about how best to deal with ‘sleeping dogs’, inactive members cannot be left to their own devices. By re-engaging inactive members, you are not only making the most moral business decision, but are likely to also see your retention rate and customer satisfaction rates improve. What further reason do you need to get in touch with that member that’s ‘snoozing’ away?

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