November 21, 2019 Danni Poulton
As the seasons change you have an opportunity to keep members active and engaged. To do this you need to understand how seasonal change affects attendance and how you can use these insights to improve gym retention.
People are creatures of habit. Whilst the world around them stays the same, they are likely to stay the same too. But as the seasons change, people are forced to think about their choices. This is a great time to reach out to your gym members to make sure that, whatever the changing season brings, they keep returning to your gym to keep them fit, motivated and engaged.
As Autumn changes into winter we enter the final stretch of the year. It’s a wild dash to get as much work done as possible before things start to slow down for the Christmas period.
Some gym members will have already let their gym attendance slide by this time of the year, with holiday breaks often leading to a period of inactivity as routines like gym attendance fall by the wayside.
For these people, use your gym marketing to tempt them back into activity. Remind them of the health benefits of exercise, especially as seasons often take a turn for the worse.
For others, though, they will be aware that energy levels begin to drop as the colder weather sets in. This might motivate them to hit the gym to keep their energy up. This means your gym needs to look like the most attractive place for them to head to to get their exercise fix.
Winter can be a time to win over all those street-bothering joggers. Let people know about your climate controlled suite of the running machines and ellipticals, or advertise your cycling classes. Anything to tempt people to seek refuge from the winter weather in your gym.
Winter is also a time to start building interest in your gym, with the new year just over the horizon. Push out your referral schemes, getting the word out about your gym so you can make the most of January’s gym membership boom.
By New Year the period of slothfulness that often accompanies the festive season begins to wear off and people look ahead to how things are going to be different in the year to come.
Many people will be in a noticeably unfit state after the excesses of Christmas and Thanksgiving.
All this creates the perfect storm of motivation for people to join the gym if they haven’t already, or renew their attendance if they’ve been inactive. But you need to deliver marketing that reflects these seasonal changes. That’s where gym retention software like KeepMe comes in; allowing you to trigger automated marketing messages at specific points of the year.
A survey revealed that 13% of all New Year’s resolutions are to get more exercise. And a study by the IHRSA found that nearly 11% of all gym membership sales take place in January, more than in any other month.
January sees a big spike in gym attendance. But this often wears off after a month or so as people’s expectations of gym life clashes with their actual experiences (ie, they discover exercise is quite hard!).
So gym owners need to realise this is a great time for new people coming to their gym, but they’ve got a fight on their hands to keep these people.
A big way to retain as many new years joiners is to have an exceptional new member onboarding process. This shows new members the ropes so they feel comfortable in your gym, and helps them define fitness goals and find the right workout program for them. They’ll be more likely to stay with your gym if they’re having the needs met and their expectations managed.
By spring people are starting to get a bit more energy back as the days start to get longer and people look forward to better weather and the summer ahead. You can tap into this new season of enthusiasm by helping your members visualise how attending the gym can help them make the changes they want to see.
People often want to get in shape for summer… whether to fit into a wedding outfit or bathing suit. You can tap into this enthusiasm for self improvement with some well timed Spring marketing.
As Spring hands the baton to Summer there’s a danger that people’s gym attendance drops.
It might be that it’s much easier for people to exercise outdoors, especially with so many outdoor exercise options these days, like marathons, 5k runs, and experiences like Tough Mudder.
All this can mean less gym attendance. You can help improve gym retention by encouraging people to stick with their gym attendance over the summer… maybe you can get them hooked on a new fitness class, perhaps you can remind them of the positive psychological impacts of exercise… it increases happiness, makes people more positive, more confident and helps people enjoy all those summer BBQs whilst controlling their belt line. And of course summer discounts and offers are a great way to encourage continued gym attendance.
If you want to know more about how to increase member retention throughout the seasons, book a free tour of our KeepMe gym retention software today.
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.
October 24, 2019 Beth Cadman
A single, unified retention strategy that can be rolled out across multiple outlets and teams could be the most powerful way to keep retention rates high.
Delivering an exceptional customer experience is a tried and tested idea that has been proven to work. However, in this digital age, where customers are inundated with choice and competition is fierce, they have more power than ever before. Harbouring customer loyalty and keeping retention rates high should be top of the agenda for any business, as dismissing a brand or switching from one to another has never been easier.
A study by Harvard Business School reported that increasing customer retention by even 5% could increase profits by 25–95%. However, a recent CMO survey found that nearly half of CMOs don’t expect to improve their retention rates in 2019.
To give your customers exceptional experiences, you must first know your members experience, and then you must curate a retention strategy that is malleable and flexible. The better a gym can do this, the more tailored, unique, and personal their approach will be, and therefore, the customer will feel respected, listened to, and valued, thus increasing their likelihood of committing to their membership and the brand as a whole.
While some operators think that because of this, creating different strategies for different studios is the best approach. However, it is arguable that this could lead to inconsistency and confusion and actually result in the delivery of lousy customer service which could affect the reputation of the brand. Even a single poor customer experience at a studio has the potential adverse affect for the overall brand, even if their customer satisfaction rate is high. If a person has a negative experience in a particular location and chooses to write about it online, the whole brand could take a hit because the internet doesn’t have physical boundaries, and operators need to be ever mindful of that.
Therefore, creating an overarching retention strategy could be the most beneficial. Doing so means that gym members can expect the same level of customer care wherever they go. This means that if a member were to move away, they would be more likely to stay loyal to your gym and continue their membership in their new location. Similarly, for those members whose membership allows them to work out in any number of your outlets across the country, they will be presented with what is familiar and given the same service and attention that they have come to enjoy when they visit their regular gym, thus boosting their loyalty to the brand overall.
Of course, different studios do require separate incentives, and these will be determined by researching the customer base and adjusting offers and programs established by the results of such investigation. A discount for high-intensity workout classes, for example, may not work as well in a studio where the majority of members are aged 60+ as in one where they are in their twenties. However, the overarching strategy for rewarding loyalty through incentives should be the same.
However, aligning all teams and outlets under one strategy does make sense if a business hopes to keep delivering the same level of exceptional customer experience and care. Devising a singular retention strategy that can be rolled out to all studios means that there is greater fluidity and congruity, and all employees across all departments are working towards clear goals and a single vision and they have the tools and strategies to enable them to achieve these goals and realise this vision.
A study from Accenture revealed that 89% of customers get frustrated because they need to repeat their issues to multiple representatives. If gym operators have a retention strategy that is the same across all outlets, it is far more likely that there will be a protocol in place for how to deal with particular problems and complaints and therefore customers won’t have to continue to seek different advice and answers from various team members. Everyone will have the same answer, and it should be one that solves the customer’s problem, satisfies their need for answers and leaves them feeling as though they have had a genuinely positive customer experience.
One of the main reasons customers leave a business is because they feel ignored. Some 68% of customers stop doing business with a company due to the feeling that the company was indifferent toward them. By making sure that a solid retention strategy is in place across all outlets can ensure that customers feel as though they are being heard, wherever they are.
Another significant benefit from creating one retention strategy is that all the research and findings can be analysed together, and all resources can go into creating one compelling and effective strategy rather than some clubs doing a bit in one area, and others doing something different. Using a single platform such as Keepme to gather all information, and store all data means that the creation of a more unified and powerful retention strategy will be so much easier.
A solid retention strategy to retain and cultivate customers across the board is imperative. By creating a streamlined, integrated plan that still retains the flexibility to be moulded and tailored to individual needs and desires gyms will be at their most effective, and keep customers committed to their membership and loyal to your brand.
September 20, 2019 Beth Cadman
The social media efforts of a gym can have a significant impact on customer loyalty, increasing the perception of trustworthiness, creating substantial opportunities for interaction and communication and fostering a sense of belonging and community – all of which have a positive impact on member retention rates.
With 2.45 billion monthly active Facebook users to date, social media has become more influential then ever when it comes to consumer behaviour. With over 60 million active business Pages and 49% of users like a Facebook page to support a brand they like, you cant afford to not be present on social .
However, it is essential for those devising retention and marketing strategies to understand how to use social media to ensure that it delivers the most significant impact, and to avoid common pitfalls that businesses can fall into when using social media that can end up doing more harm than good.
So what are the kinds of things that gyms should be using social media for?
Announcing competitions on social media is a great way to engage your members. Offer a valuable prize such as free personal training sessions or a piece of wearable fitness technology, and consider what would be most helpful to try and capture in return. Competition entries could be made in exchange for liking and sharing the post, for follows on social media accounts, or in exchange for contact information, newsletter signups, completing a survey, and so on.
Encouraging photo sharing on social media is like free marketing for your gym. It boosts the sense of community and connection between members, encourages members to take pride in their workouts and to reach out and support one another by liking each other’s photos.
If you are holding a special event, advertising the introduction of new classes or gym equipment or hosting a fundraising event, social media can be the ideal place to shout about it. Doing so will show members that you care about them and the local community, thus making them feel valued and reminding them that you are the kind of brand whose way of thinking aligns with their own.
When it comes to fostering customer loyalty, communication is vital, and excellent communication delivers a more positive customer experience, and an enhanced customer experience translates to higher retention rates. Social media platforms can be an excellent place to start conversations. By asking the right questions, you’ll learn more about your customers, their needs and desires and be able to provide valuable answers or let them know that you are listening and intend to take action.
Social media groups are also useful for starting conversations, for subtle marketing of your business and for finding out more about members attitudes towards working out in general. You can also use groups to ask pertinent questions and discover what would motivate members to continue to exercise, what kinds of things are important to them, and would make them feel loyalty towards a particular brand.
By using social media for the above, gym owners can hope to experience a number of significant benefits, all of which help to keep member retention rates high. Such benefits include:
By creating useful, exciting, engaging social media platforms gyms are encouraging members to become connected to the gym. Emotional connection is vital when trying to develop brand loyalty, and the better connected a member feels to the gym and the more positive their experience of the brand, the less likely they are to be tempted elsewhere. In fact IHRSA research stated that “reaching out to a member—whether by phone, email, text, or social media—more than doubles the likelihood that they will be a “promoter” rather than a “detractor.”
The importance of building customer relationships in any successful businesses cannot be underestimated. Using social media to reach out to customers on a personal level and foster these intimate relationships will again help members to feel valued and respected and strengthen their emotional ties to the gym.
By using social media platforms to motivate members, you can encourage them to make the most of their memberships. Data suggests that the more a member attends the gym, the more likely they are to keep doing so, so it is well worth investing some time and resources into inspiring members to continue to workout.
By encouraging members to post pictures and videos of their workouts, you can also promote a healthy sense of competition. Post stats about the average length of workouts or frequency of visit, or encourage people to post when they have achieved their fitness goals, or to share them in the first place. This can help to catalyse a sense of competition amongst members, which can help to motivate them to continue using the gym.
Using social media effectively also opens up a much broader opportunity to reach potential new members. All the most prominent social media platforms give you access to handy tools and statistics which means that gyms can create tailored, targeted marketing campaigns and deliver them to particular audiences to ensure that they make the most impact. In order to remain competitive, gyms must take advantage of these analytics to apply fact-based knowledge to leverage social media outreach for fitness brands.
Social media is also helpful to understand what people are saying about your business. By monitoring comment sentiment and mentions of the brand, owners can get a clearer picture of pain points and positives and will have the ability to react more quickly and respond where necessary to limit any damage to the gym’s reputation.
Using social media intelligently is an essential way for any gym to build up their fitness brand and by doing so and spending increasing amounts of time devising intelligent strategies to use these platforms to greatest effect, gyms can hope to not only reach new customers but strengthen their relationships with existing ones which should have a hugely positive impact on member retention rates.
September 12, 2019 Beth Cadman
Branding partnerships can be an intelligent move for those working on member retention strategies and can turn disengaged members into passionately loyal ones.
When it comes to driving new customers to your business, retaining loyal ones, and securing business growth and success, branding is everything.
With continuously increasing competition, gyms have had to fight harder than ever to attract new customers and hold onto their existing ones. When a customer feels connected to the gym, and believes that they are able to resonate with the brand or they feel that it aligns with their way of thinking, the more likely they are to stay loyal to that gym. The member will then continue to renew their membership and not be swayed by hovering competitors, however tempting an offer they dangle.
Developing a positive, smart company brand is, therefore, critical. Developing a loyal following of customers can ensure continued success, and boost sales of the associated products and services as well.
According to the Pareto Principle, 80% of your company’s future revenue will come from 20% of your current customer base. This means that while focusing efforts on enticing new customers it is crucial to turn the spotlight on those you already have, as continually nurturing that relationship, is going to have a significant impact on your business going forward.
Discovering relevant brand partnerships can help gym owners deliver unique customer experiences, enriching their offering, and surprising the customer in unexpected ways. A successful collaboration will not only help to bring a more satisfying and positive product offering but will also boost the brand by affiliation and give the gym access to a broader customer base who are already primed to become loyal customers due to their association with the partner brand.
A loyal customer will not only continue to renew their gym membership year upon year; they are also likely to increase their spending if they feel positively towards the brand. In fact, 67% of millennials will spend more with brands they love compared with older shoppers, and with an increase in younger people joining the gym, this statistic is undoubtedly an important consideration to bear in mind.
Building brand loyalty is an evolving process, and gym owners must be prepared to adapt their strategies according to member data, fitness trends, advances in technology, and impactful events that can change perspectives and attitudes. If a gym wants to build brand loyalty, they must expect to be malleable and flexible and to understand that in the digital age there is a higher demand for more significant benefits, and for those benefits to be immediately available.
A successful brand partnership has numerous positives for the businesses involved, and if utilised effectively, they can:
Increase trust – partnering with a reputable brand gives an impression of being trustworthy. If the partner company is viewed positively and offers excellent customer experiences, this will reflect well on the other brand too.
Provide value: If a gym partners up with a brand that is relevant they will each bring something unique to the table that enhances their customer experience adding intrinsic value to the products and services that each of them provides.
Creates a buzz: If two big-name brands decide to partner together, this usually creates some buzz and excitement in the industry and beyond. This can help businesses reach new customers, promoting awareness, and also opening up PR opportunities that may not have otherwise been available to them.
A significant factor affecting member retention is brand loyalty. If a customer has a positive perception of your brand, they are more likely to develop a sense of dedication and emotional attachment to it. By partnering with another business, gyms should be able to offer an entirely unique customer experience which advances them ahead of their competitors and demonstrates that they are committed to continuing to evolve and improve and provide their customers positive, memorable experiences, thus rewarding them for their continued loyalty and motivating them to remain so.
Building multiple partnerships is a common feature of big brands’ marketing strategies. The smartest of these think beyond the obvious and instead consider creative, surprising alliances that make them stand out amongst the competition.
British Airways, for example, partnered with The White Company to try to provide an enhanced experience for those who find it difficult to sleep in the sky. Manchester United and Uber also teamed up to create a dedicated ”Uber zone” at Old Trafford helping fans to get to and from matches with ease. Dunkin’ Donuts and Waze were an even more surprising partnership but their offering of giving driving commuters the option to place their Dunkin’ order ahead of time was a clever one, providing something unique and valuable in exchange for downloading the Waze app and becoming a rewards member of Dunkin’ Donuts, of course.
Using member data to understand the current reach of your brand and where that reach falls short can help gyms ensure that they pick a brand partner that can reach the gaps they want to fill. If those in charge of the marketing strategy understand how to expand the reach in a measured and targeted way, the partnership is likely to be much more successful as it will be relevant and more natural to integrate. Picking a brand with common goals and values and making sure that agendas align is, of course, crucial to ensure that the partnership is valid.
Considering how members are engaged through CRM and assessing the popularity of the brand partner on social media and other platforms can also determine whether a collaboration will be beneficial. It may be that a potential partner has an influence on platforms where you do not, or that they have had success in areas and through marketing campaigns in the past that would address specific problems and challenges that gym members currently face.
Gyms have been facing an increasingly severe retention battle for many years now. Genuine and considered brand partnerships can undoubtedly be an impactful way to increase engagement overall and turn members into fiercely loyal customers. By building meaningful connections and collaborating with impressive partners, gym owners can hope to excite and inspire their members, thus influencing them to remain faithful both now and in the future.
September 5, 2019 Beth Cadman
Recognising the warning signs that indicate a member is at risk can help gym owners step in before it is too late, thus improving their retention rates.
Turning new gym members into loyal customers is a huge challenge for any gym, and seeing those churn rates increase no matter what you do can feel frustrating and make the future of your business seem uncertain. In fact, a study of behavioral statistics in the US by The Good Body found that 50% of the people starting an exercise program will drop out in their first six months. The ability, therefore, to identify when a member is becoming or has become at risk can have a significant and positive impact on member retention rates, as doing so gives gyms time to implement an effective strategy to re-engage those members and prevent them from terminating their membership.
1. A decline in attendance
If a previously frequent attendee starts skipping their workouts and you can see they are no longer following their usual routine, this could indicate that they are becoming disengaged with the gym or have found an alternative fitness regime elsewhere.
2. Increased dissatisfaction
If a customer starts to complain either to a member of staff or via telephone or email, they may be contemplating leaving the gym.
Training staff to be alert to complaints and to make a note of these can help gyms ascertain whether they are no longer meeting their customer’s needs.
3. Their workout partner leaves the gym
Customers tend to listen to their friend’s opinions over any type of marketing, so if one goes, the other could be on their way out too.
4. An inability to hit pre-defined fitness goals
If a member feels as though their workouts aren’t working, they aren’t going to feel the benefit of coming to the gym. Making sure you capture each members fitness goals when they join and monitoring their progress will ensure you can flag up any members who are struggling.
5. A change in routine
A change in routine could suggest a member is less dedicated to their workouts, is dissatisfied with the facilities or is having to wait to use certain equipment – all of which could point to them becoming at-risk.
6. Missed or late payments
If a member misses a payment or starts to pay late, they could be struggling to afford their gym membership. Most view their membership as a non-essential item, and therefore it could be the first to be cut if the purse strings are in need of pulling a little tighter.
7. A change of address
If a member changes their details and they have moved further away from the gym, this could be a warning sign as what was once a convenient location becomes less so.
1. Inspire attendance
Remind members why they joined the gym in the first place. Send aspirational emails that encourage fitness and health. A member may feel disengaged, but by providing motivation and inspiration, they might feel encouraged to stick at it.
2. Ask for and act upon feedback
Businesses tend to hear only 4% from customers, the other 96% will just leave. That’s why it is essential to ask for feedback from gym members.
If a customer complains or expresses dissatisfaction it is important to take this seriously. By listening to customer feedback and acting to make improvements, you demonstrate that you care, and this can help customers to feel valued.
3. Encourage member socialisation
The more engaged a member feels with the gym, the less likely they are to leave. Encourage inter-member socialisation and train staff to be warm, welcoming, and friendly to each member and treat them as an individual. Offering a group fitness class can also improve retention as members tend to visit their facility specifically to engage in group classes.
If at-risk members feel as though they are part of a community and associate the gym with having fun and being social, they will be less likely to leave.
4. Adjust their fitness plan
If a member feels as though they aren’t achieving their fitness goals they may wish to cancel their membership. Turn this around by offering a PT session and assessment to help them manage their expectations but also to reach their goals faster.
5. Assess facilities
If your gym has become more crowded or some facilities need fixing or replacing, make sure that you manage this and fix any broken machines or other equipment to ensure continued member satisfaction.
6. Offer discounts
If a customer no longer feels that the expense of the gym matches the value, they may be tempted to cancel their membership. It could be that they have had to reduce their spending and see the gym membership as an inessential spend. Offering discounts and free classes may help them to feel as though it is worth it once more.
7. Incentivise and encourage brand loyalty
While some membership terminations are unavoidable if gyms work hard to incentivise their members to continue to use their facilities over a competitor they can keep retention rates high. By offering excellent customer service and value, they may be able to retain those customers who are considering leaving the gym for reasons of convenience as it will be worth the extra effort to stick with the brand and service they love.
By recognising the signs that a member is no longer enjoying their membership, it is possible to intervene and change that customer’s perspective. If gyms make sure that they have the tools in place to capture customer data and monitor customer behaviour, they can ensure that they will be able to identify at-risk members and do something about it before it is too late.
If you want to easily identify at-risk members, our AI-powered retention tool can help you capture data the smart way.
August 29, 2019 Danni Poulton
It’s a well established fact in business that it costs more to acquire new customers than it does to hold onto existing ones. Despite this, many gyms fail to grasp the reality of the matter. Some of the reasons for this are obvious…
Maintaining motivation to stick at the gym is hard for most people and gyms are often looking for ‘low hanging fruit’ when it comes to attracting new members. Lots of gyms find it challenging to properly motivate and inspire their members.
Fitness tends to work in a very faddy way. For example, each January there is a huge influx to the gyms. However, most of these members will have quit by summer.
Because of this, many gyms are geared to get as much money out of new members as possible, with marketing that tries to attract anyone that they can get through their doors.
Such an unfocussed ‘pay and spray’ approach to recruiting new members means there are lots of what marketers call “unqualified leads”… people who aren’t well matched to your gym’s offerings and therefore are more likely to leave down the line.
Many gyms also try and tap into the latest fitness crazes, be it Zumba classes or wearable tech, without doing so in a strategic way. For example, you need to know what demand there is for your gym offerings in your area as well as understand what it is your current members enjoy/would like from you.
If your gym is located in a working class area, having lots of high-end offerings with frills like physiotherapy, saunas and personal trainers may not be affordable for your members. Similarly, flogging low cost, short term gym memberships in a middle class area is likely to give you all the problems that come with low-cost gym retention and none of the benefits that come from tapping into the budget gym market.
As it is difficult to grasp all the factors that affect member retention, there’s a tendency for gyms to focus on acquisition – it’s straight-forward. When it comes to member retention strategies, there is no one rule for all and therefore working out a solution does require time, which some operators may not have.
IHRSA reports that the cost of creating a new gym member account is around $66 per account. However, the real cost to take into account, is how expensive it is when a member quits your gym. IHRSA data shows that every member who leaves your gym can cost you $674 per year for every dropped account.
More than just the financial cost should be taken into consideration when acquiring new members. Think of all the time and energy your staff has to expend onboarding new members. This might include:
If you reduce attrition in your gym, you can then redirect all that creative and physical energy into developing your member retention strategy, implementing automation to reduce labour costs as well as time and savings.
Instead of working out how to attract a constant stream of new members, you could be scouting new sites for expanded gym facilities or pursuing even “bigger picture” strategic avenues for your brand. If more action is done to improve your member retention, your business will certainly benefit.
If you’d like a deeper insight into Keepme to boost your member retention, get in touch and book a demo now.
April 18, 2019 Faith Christine Lai
Millennials, they do things differently.
Whilst many throw their hands up in despair at a generation criticised for being coddled and having no staying power, the reality is very different.
The truth is, there are certainly challenges when it comes to understanding how to market your gym to millennials and how to retain these tricky customers. But there are also huge rewards for those who get it right.
Just like the Baby Boomer generation came to define an era and became a massive source of revenue for canny marketers, the Millennial generation are in the process of transforming how the gym industry targets its offerings. How well they do this will determine how successful they are.
One of the big challenges gyms have to face when it comes to attracting millennials is price. One study found that over 70% of millennials think gym memberships are too expensive. Instead they’ve been drawn to the experiential appeal of outdoor endurance events like Tough Mudder, or the community vibe of cycling studio programs like SoulCycle.
The thing is, it’s not that millennials are reluctant to spend money, it’s that they understand that exercise doesn’t have to be a chore, and they expect high value in exchange for their money.
Millennials are super into fitness. In fact, millennials do more exercise than any other generation. A 2018 study by the Physical Activity Council found that nearly half of millennials participated in high-calorie burning exercise and only 25% were sedentary.
Not only that but fitness is more important to millennials than to any other generation. According to therapist Rachel Kazez:
“It seems like [fitness is] a more active part of their lives, something they do intentionally and as a priority rather than an afterthought. It also seems like they try to make it more enjoyable and colorful, many being willing to spend money on memberships and specialty fitness activities.”
This insight gives us an idea of how you can attract and retain millennials in your gym.
Psychotherapist Nathalie Theodore believes that, “While Gen Xers and Baby Boomers are still mostly working out to burn calories, millennials are turning to fitness as a means of making friends, meeting potential love interests and networking.”
She argues that technology and social media has lead to increased loneliness in millennials, who are now turning to exercise to connect with people and gain a sense of community.
The gyms that will succeed in retaining millennial members will be the ones that are able to make their facilities socially and culturally appealing to members in search of a sense of community and belonging.
Millennials are also more aware of the relationship between exercise and mental and physical wellbeing than any other generation. That’s why spa services like the Stone Creek health club have seen 12% annual growth in revenues, offering services like massage therapy and full body exfoliation treatments. A growing number of its members are millennials (adults aged under 35).
As gyms begin to adapt to the more sophisticated needs and interests of millennials and younger adults, they’ll reap major rewards. This is the largest cohort on the planet, worth $2.4 trillion globally. And a survey by the International Spa Association found that 60% of respondents are invested in their own personal wellbeing and 56% already attend spas.
We’re not suggesting you turn your gym into a spa, but introducing spa-like services like massage therapies, body treatments and so on may help attract more millennials to your fitness club.
The majority of
This is because millennials can be exceptionally loyal gym members if they believe they are getting a superb value proposition for their money.
Smart gyms are realising that it is possible to provide a space where a sense of community can be established, where people feel supported and nurtured in the club environment. According to Derek Brettell of The Club Gym:
“When we were building the club one of the most important things we wanted was for it to be a place where people enjoyed going. A place where people knew they would see familiar faces, be comfortable and feel supported. We wanted people to know that we cared and that they were more than simply a number to us.”
This sense of community can play a big role in gym retention.
You can foster community in your gym by doing the following:
If you want to engage and retain millennials then gone are the days of one size fits all exercise options. You have to start customising your fitness offerings to suit a wide range of members, and be willing to put the time into personalising exercise programs to individuals.
This means you can’t always operate on mass, sometimes it really pays off to focus on building smaller communities of gym members, because if you get it right your gym’s reputation will increase and that will do wonders for your Net Promoter Scores.
This brings us to how to handle fitness retention. You have to understand the diversity of millennials; this means operating at a niche level as well as looking at the bigger picture. Because of this you need a sophisticated and granular way to manage retention.
This helps you easily monitor and target different segments of your gym membership, pay close attention to their attendance and exercise patterns, and automate your outreach in a granular way. You can use retention software to monitor the Net Promoter Scores or your members. This means you can target promoters for referrals and upselling and you can focus on detractors by solving the pain points they are encountering with your gym.
At the end of the day, millennials are not strange creatures from another planet, they are young people looking for value, purpose, community and personal growth. The more you understand the world from their perspective the better you will be at offering them services that will keep them coming back for more.
April 5, 2019 Faith Christine Lai
There are tons of tips out there on how to boost your gym membership retention. But it’s hard to find a guide on how to create a killer gym retention strategy. In this blog, we try and redress the balance by telling you how gyms came to design membership retention strategies that work for them.
Firstly, let’s break down the crucial elements that go into any gym retention strategy, and look at how you can optimise them for maximum retention. There are some core elements involved in building a solid member retention strategy:
Now, there is no one-size-fits-all gym membership retention strategy you can magically apply to your site. Each gym is different and your retention strategy will have to factor this in.
If you run multiple gym sites, the first thing to do is to get a solid understanding of the membership retention needs of each facility. Each gym will have a different set of customers, different priorities, and perhaps even different budgets and resources. What works for one facility might not work for another.
The first thing you want to do is take a look at your retention across all your venues.
Pull up your membership details and analyse which demographics are at risk of churning.
Here are some at-risk groups to consider:
You need to start categorising your member lists for a more targeted approach – it will help!
You should also monitor how effective your current membership plans are.
Segment your members by plan type and compare and contrast attendance rates. Send out surveys to see how members find their current plans. Action any feedback you can to make your plans work right for your members. Having an inappropriate membership plan is likely to end up with members leaving for one of your rivals. And you don’t want that, especially if you could have avoided this outcome by adjusting your membership offerings.
Sound like a lot of hard work? Well, the good news is that there are tools made exactly for this job, like Keepme which can automate this part of the process for you.
It’s important that you have the right range of workout classes and fitness programmes to suit your members’ requirements. It’s a good idea to send surveys finding out what your members want from your gym, and making any relevant changes so that working out in your gym is an attractive proposition for your members.
By now you should have an understanding of retention and attrition data across your gym location, and you’ve made all the infrastructural changes you can (if people are complaining about filthy changing rooms/ faulty air conditioning, etc., you should sort that out pronto).
The next step is to separate all this retention data into different risk groups. Although you should have an outreach plan that reaches every member, you should create content that specifically targets at-risk groups.
Running engagement campaigns is an ongoing process. Over time you should monitor whether your members’ retention scores improve or get worse, and change your campaigns accordingly. Often the problem will be that you’re not being targeted enough and your messages may be too
You are probably familiar with the concept of Net Promoter Scores (NPS), the measure of whether your members are “promoters” or “detractors” of your gym.
You should send out NPS surveys to your members and then segment
Detractors could then be sent to your outreach team for some TLC, whilst promoters can be used as contacts for testimonials, or to be part of a referral scheme, and so on.
As you can see, there are lots of factors that go into planning fitness membership retention strategies. At the end of the day, each gym’s strategy will look different. The tips in this article should help put you on the right track, as long as you look at your data in a segmented way and keep monitoring retention risks and NPS scores you will be able to come up with a strategy that gives your gym a head start on the competition.
March 28, 2019 Faith Christine Lai
Has the introduction of group exercise classes improved gym member retention rates, and if so should gym owners and employees be encouraging members to join them?
In the past, joining the gym was a fairly solitary experience.
A person could sign up, and then they were free to use the equipment as and when they wished. However, there was little interaction between gym goers and staff (unless hiring a personal trainer), and the communication between members themselves rarely extended to more than a sweaty grimace as they queued for the water cooler.
Individuals were responsible for their workouts, set their personal goals and if they didn’t achieve them it was nobody business apart from their own.
Nowadays, however, the landscape of the fitness industry has changed dramatically, and gym members now face many choices. While there is still the option to workout solo, with the introduction of classes and group exercise sessions, it seems like almost every week there is a new trend for an exercise class that promises to give attendees their dream bodies in no time at all. But do these classes live up to the hype, and are they helping or hindering gym member retention?
Is it possible that the introduction of group exercise has helped to improve member retention rates? Or does choosing to participate increase possibility of failure, create confusion and a loss of ownership of one’s own workouts? Let’s examine the pros and cons of each:
Group exercises encourage members to do their best. Those who work out with peers around them are more likely to push themselves further, so their workout is more productive. People don’t want to be the first person to drop out or refuse to participate appropriately, and research demonstrates that the healthy actions of others do influence us. A study published in the Journal of Social Sciences found that participants gravitate towards the exercise behaviors of those around them.
Group exercises can be helpful to those new to exercise as they can try different kinds of classes out and see which ones suit them best. Group exercise gives people the opportunity to socialise while working out and gives newbies more confidence and knowledge without having to hire a personal trainer. A 2016 study published in the journal Obesity reported that overweight people lose increased amounts of weight if they spend time with their fit friends, and weight loss continues to grow the more time they spend together. People who workout in group sessions also feel more accountable to others and are therefore less likely to skip workouts and will keep coming back for more.
A group exercise class can help those lacking in motivation feel encouraged and energised. The ‘we’re in this together’ mentality of a group exercise class means that participants are more likely to encourage one another, engage with one another and spur one another on to make it through to the end. The sense of satisfaction and achievement is also a shared experience which can help motivate members to commit to the class and continue to return to the gym to participate.
Researchers from the University of Southern California found that people who worked out with friends (or a spouse or co-worker) reported that they took more enjoyment in their exercise than those who worked out solo. The variety provided by the range of classes also mixes things up, keeping workouts fresh and exciting and helping members improve their health, fitness, body shape and strength in different ways.
Group exercise can have an adverse effect if people start to view the class as a punishment and a chore rather than a fun and social activity. If members begin to feel pressurised and guilty, this could be a recipe for disaster, and they may start to avoid the classes to negate these feelings.
Group exercise classes could also negatively affect retention rates if a member starts to feel as though they can’t keep up, or begins to compare themselves to others in the class. A study reported that exercising in mirrored environments could make some women feel more self-conscious.
Lack of individual attention
In group exercise classes instructors rarely have the time to give participants individual attention, and therefore there is the increased chance of injury if an individual does not perform an exercise correctly or pushes themselves beyond their limitations. The lack of personalised attention could also result in some participants not having their needs or goals met. Classes are usually created around the based common needs of everyone who takes part, and therefore there is less scope for members who wish to push boundaries beyond this.
Increased focus/ reduced distractions
Those who choose to work out in the gym alone may find that they have more focus than participants in a group setting. They can work on personal goals and don’t have the distractions of others around them so can zone in on their workouts and prioritise their unique fitness goals.
Classes can sometimes focus on just one area of fitness, those who choose to work out in the gym alone can take advantage of all the different machines to add variety to their workouts. If there is a particular area they want to focus on, they can choose the equipment and exercises to allow them to do so, rather than being dictated to by the class instructor.
Can workout at own pace and set personal goals
Group exercise classes cater to the needs of the masses where those gym members who have specific, individualised goals can create their own workouts to maximise effectiveness and achieve them at their own pace with no external pressure.
The solitary nature of just working out in the gym alone can have an adverse effect on members motivation. Without the social aspects and feeling part of a community, if gym goers don’t see their desired results they could quickly become at risk for cancelling their membership. They may feel less connected and loyal to the gym and therefore may find it less affecting to stop coming to the gym than members who feel as though they are part of a community and enjoy the social aspects of their workouts too.
By not getting involved in group exercises a gym member has no one to be accountable for their workouts other than themselves. There is no one to encourage them, nor anyone to make them feel guilty if they choose not to attend. This can result in those gym only members to slowly decrease their attendance until they stop coming altogether.
It shows that by encouraging gym members to attend group exercise classes, retention rates should improve. Therefore gym owners may wish to consider investing more time and resources into providing and marketing group exercise classes to their members and motivating employees to sell these classes to gym goers.
It is important to note, however, that there are downsides to group classes that could also result in a negative impact on retention, for example, if a member pushed themselves too hard and got injured or felt as though they couldn’t keep up and became demotivated. Therefore gym owners should take care when pushing group exercise classes onto members and should really target the right cohort when encouraging either group or solo
March 21, 2019 Faith Christine Lai
A healthy membership retention rate is absolutely vital for any businesses’ success, especially in the increasingly competitive fitness industry. After all, acquiring a new customer can be up to 25 times more expensive than retaining an old one – membership retention doesn’t merely affect who walks through your doors, it also affects your bottom line.
Member loyalty and member retention are often seen as heavily synonymous. If members are staying with your brand, that means they’re loyal, right? Not necessarily. Membership retention measures whether or not an existing customer continues to do business with you. In contrast, loyalty measures a customer’s attitudes towards your brand. Do your customers actively prefer your brand over your competitors, or are you at risk of losing their business to that new business on the block?
Of course, there is still a relationship between retention and loyalty, since a loyal customer will almost every case also be a retained customer (barring factors such as a sudden inability to pay). Furthermore, there is a relationship between retention and rewarding loyalty – a staggering 82.4% of respondents said they would be “more likely” or “much more likely” to shop at stores that offered loyalty programmes.
It’s not hard to imagine why this is the case. When people are rewarded for loyalty, they feel appreciated, something that is being increasingly important in business – 68% of customers said they left a company because they believed that they were not cared about.
If customers are not rewarded for their loyalty, they have less incentive to be loyal, particularly in an industry like fitness where new competitors crop up every day with attractive deals designed to draw new customers through the door. A loyalty programme also helps to cultivate a sense of community and belonging in members. For instance, Harley Davidson customers, who call themselves “hogs,” frequently develop bonds with their community members. When customers strongly identify with a brand, they are less likely to switch to a competitor.
Loyalty programmes take many different forms. In its most basic form, a loyalty programme is a points-based system, such as UK supermarket giant Sainsbury’s Nectar Points scheme. However, many businesses are adding on to the classic model, providing special features to members as well as points. For example, the wildly popular Sephora Beauty Insider scheme, which has over 17 million loyal members, organises exclusive member events and makeup classes. The Starbucks Rewards™ scheme gives members free in-store refills and the ability to order drinks in advance. For a gym, non-monetary incentives like exclusive fitness classes and the use of special facilities like saunas or access to sports therapists could also be extremely effective. One might also consider pricing strategies that directly reward loyalty as another way to signal to loyal members that you value their business.
However, according to The Loyalty Report 2017, the average consumer is involved in 14 loyalty programs but only has the capacity to engage with half of them. Companies lose money on time and effort, and customers get no more value from the businesses to which they are “loyal.” Here are two important things to remember when designing a loyalty rewards scheme:
1. Keep it simple
If you can’t explain your loyalty programme to a customer in two sentences, it’s probably too complicated, and it will probably be ineffective. Keep things simple and easy to understand! For example, one H&M Club has designed their programme so that one point is worth $1. Structuring your rewards scheme in an easy-to-understand way means that customers are more likely to understand what’s in it for them, and subsequently more likely to engage with the loyalty scheme.
2. Offer a personalised experience
Increasingly, customers are demanding personalised services. Think with Google discovered that 63% of people expect brands to use their purchase history to provide them with personalized experiences. Every demographic is different, and you must first know what your customers actually want. If you don’t, there is likely to be a mismatch between the rewards you offer and what would actually incentivise your customer base to stay loyal.
Rewarding loyalty can be an extremely effective way to boost customer loyalty, and consequently, customer retention. Take the time to assess what sort of loyalty rewards scheme will work best for your demographic, keep it as simple as possible, and you’re likely to see great improvements in both loyalty and retention.
March 15, 2019 Tina Ahmed
“The Keepme product captured my full attention from the minute I first heard about the concept. The service delivers on every aspect of members communication, engagement, and retention that I have worked towards over the last fifteen years.”
Nasta comes to Keepme with 15 years of experience in the retention management field. Most recently, Nasta worked as Director of E-Commerce & Marketing for UK gym chain, Xercise4Less, where he helped to drive the gym’s ambitious expansion programme around the region. Previous positions have seen him as COO of Retention Management LLC, and Sales Director for Matrix Fitness.
Nasta combines his expertise in consulting with many other relevant skills, such as public speaking at core fitness industry events (The 2018 IHRSA European Congress & The Scottish Leisure Network Group), implementing effective loyalty/ rewards schemes and improving communications & engagement with health club members. Nasta’s knowledge and commitment to retain members within an industry that faces challenges to achieve a consistent retention strategy, is inspiring. His passion, experience and work ethic will be an asset for Keepme, and we are thrilled to have him on board.
March 7, 2019 Faith Christine Lai
Artificial intelligence (AI) has, in recent years, continued to develop and infiltrate many aspects of the fitness industry and will continue to do so for the foreseeable future. Be it through sales and marketing, customer service, or data collection, the influence of AI is extending its reach and affecting how gym owners and other fitness industry operatives create more meaningful retention strategies to keep existing members renewing their gym membership contracts time and time again.
The Encyclopedia Britannica definition of AI is “the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings.”
However, in reality, the term AI is much more fluid then this and, over time has been adapted and modified to better match the goals that a particular system is designed to achieve.
But how does the fitness industry make use of this technology? And is it necessarily a good thing?
People who join the gym are interested in their health and fitness and self-improvement. For a gym to be invested in AI and to be willing to utilise this new technology to improve their systems, to gather data, to inform them on customer satisfaction, and to tailor their service to better suit the needs of the individual is likely to appeal to gym goers across the board.
The implementation of AI in the fitness industry can not only serve to attract new members with its shiny, hi-tech promises but also convince longer serving members to continue to use the gym as they see it reacting to their ever-evolving needs.
According to Gartner Inc., only 2% of businesses in 2017 used virtual customer assistant (VCA) or chatbot technology for customer service and support, but by 2020, this figure is expected to increase to 25%.
AI can also be used to gather intelligence on messaging interactions, phone conversations, gym attendance records, and other communication between a club and its members. This information enables marketing teams to identify when customers might be at-risk and to act by creating personalised incentives to draw customers back in and keep member retention rates high.
Gyms are also beginning to see how the application of AI could be used to offer virtual personal training programmes to members, lowering the cost for them of hiring an actual personal trainer while giving them a similar option for customised workouts and even individual motivational strategies delivered in a virtual form.
By using a mobile app, gym owners can gather data on how individuals workout – which machines they use and how long for as well as other useful information such as their heart rate. This data can be used to devise bespoke training programmes as well as other nutrition and fitness advice tailored to the individual.
As AI continues to improve members can expect even more specific advice, for example when coupled with motion sensing technology, suggestions on how to improve movement to make the most from a workout are possible. This kind of personalised experience is likely to help members remain motivated and engaged in their workouts and renew their gym membership when the time comes.
Wearable technology and connected fitness machines will allow trainers to get real-time information on gym members activities both inside and outside the gym. This data again can be used to help identify less engaged gym members and to flag up at-risk members thus informing retention strategies to help keep those members motivated.
The development and refinement of AI opens up a whole wealth of possibilities in the fitness industry increasing productivity, gathering and analysing unprecedented amounts of data and taking over routine tasks which could free up gym owners and their employees to spend more time improving customer experience.
However, there are some drawbacks. For a start implementing AI doesn’t come cheap, and for low-budget gyms purchasing the necessary equipment and systems to apply any meaningful AI into their club may, for now, be out of reach.
It is also important to note that humans crave human contact, communication, and company and the importance of face-to-face interaction with customers cannot be underestimated. As Mina Chang writes for Forbes: “you do business with people, not entities. The beauty of communication is found in the nuance that’s only felt in face-to-face conversations.”
This sentiment rings true for gym members who rate having no gym buddy, lack of guidance and feeling out of place as their top three reasons for wanting to quit, problems that are hard to rectify without human contact.
AI certainly has its place in the fitness industry, and it is up to health club operators to strategise how they can implement the technology available to them to best effect.
If they can successfully implement AI systems to automate the more routine conversations or demands that take up employees valuable time, while simultaneously gathering data to improve facilities and offer personalised experiences they could have the best of both worlds. Intelligent, productive systems that inform sales and retention strategies in addition to a team with more time to be out there communicating, motivating and engaging with customers and providing that irreplaceable ‘human touch.’
February 4, 2019 Faith Christine Lai
The verdict is out – anyone who wants to run a successful and sustainable business should be focusing on retention. 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%. Poor retention is a particular problem for enterprises in the health and fitness industry. In this article, we’ll discuss the practice of risk scoring. Risk scoring is the act of
Some customers or customers segments are inherently more prone to churn than others. This is expressed in patterns of customer behaviour, with some patterns indicating a higher probability to churn than others. However, without a risk scoring system, it is extremely difficult to identify these behaviours, and who high-risk customers might be. It is even harder to proactively take the necessary steps to prevent these ‘high-risk’ customers from leaving. An effective risk scoring system will not only identify who high-risk customers are, but will also be able to do it in a timely fashion for your to make the necessary changes before it is too late.
The practice of risk scoring assesses the probability (or risk) that a given customer or segment of customers will churn, ceasing to do business with you. There are a variety of factors that come into play in determining the risk of a particular customer or segment of customers churning. While the specifics will vary between contexts, some factors that are likely to be important include how often they attend the gym, their purchase history, and how long they have been a member of the gym.
Risk scores can also be aggregated. Aggregating risk scores is particularly helpful for individuals who run several clubs or facilities at the same time. By comparing clubs’ overall risk scores, it is easy to tell at a glance which clubs are doing better than others at retaining their members and to swiftly respond to that information.
In addition, most risk scoring systems will also be able to segment your customer base based on their risk scores, and provide you with a visualisation of the composition of your demographic relative to these segments. Here’s an example of two personas that you may see in your gym:
With insights into the profile of your customers, you will be able to develop marketing and communications strategies that effectively meet your demographic.
One of the best ways to utilise risk scoring in retention management strategy is through the practice of micro-segmentation marketing and communication. Micro-segmentation refers to the practice where customers are divided into niche personas or ‘segments’ based on several specific characteristics such as demographic information or behavioural attributes.
Micro-segmentation marketing, in turn, refers to a marketing strategy that creates “hyper-focused campaigns” to accurately satisfy the needs of each of these varying types of customers. This strategy is incredibly effective because one of the best ways to retain high-risk customers is to meaningfully engage them and help them to understand the value of what your business offers. Remember ‘John’ and ‘Jane’? Here’s an example of how two different types of strategic communication could be developed based on their risk scores:
In this article, we’ve discussed two simplified examples how risk scoring can work to improve your membership retention rate. However, in reality, the various personas you find in a given facility are bound to be more numerous, and the precise communications strategy required more nuanced and sophisticated. Indeed, risk scoring is a very complicated, and potentially tedious process for human hands. The work necessary to carry out accurate and effective risk scoring as a part of retention strategy is exorbitant, and unfeasible for most businesses.
Fortunately, predictive analytics, big data, and other sophisticated technologies have been shown to be effective at risk scoring in some industries. Should a business in the health and fitness industry implement a fitness-specific risk scoring technology, they are bound to see their retention rates quickly improve.
It is crucial to understand how effectively you are (or are not) retaining your client base. In their 2018 NPS and CX Benchmarks Report, CustomerGauge discovered that “a shockingly high” number of companies can’t report how many customers they are losing annually, with 44% of respondents and 32% of senior management not knowing their retention rate. This is unacceptable. Tracking and managing member activity is a vital component of managing a business and sustaining membership retention in the health and fitness industry. Risk scoring, which we’ve discussed today, is an important part of getting to grips with your member demographics and, accordingly, improving your business’ membership retention.
October 25, 2018 Faith Christine Lai
So, you’ve got the fitness company of your dreams. You’ve pushed through hours of conceptualising your brand and business model, creating the best facilities, hiring the best employees. You’ve even been successful at getting customers in the door. All the hard work is over now, right?
Wrong. The key to real, sustained success in the fitness industry is not member attraction, but member retention. This article will explore why this is the case, why it’s not necessarily easy to achieve a healthy membership retention rate, and why you should make improving membership retention a top priority, starting right now.
You probably don’t need to look at your bank book to know that a strong membership base is really important for any health and fitness business. However, if you do, you’re likely to see that membership fees account for around 80% of overall revenue, as Helen Watts discovered was the case for a significant proportion of businesses studied in her paper “A Psychological Approach to Predicting Membership Retention in the Fitness Industry” (2012). This means that member fees are a vital component of revenue (and consequently, profit) generation for fitness businesses. And yet, according to the Fitness Industry Association’s figures in 2002, the average retention rate for a fitness club is 60.6%. This means that each year, a club loses approximately 40% of its members! It is unsurprising, therefore, that the IHRSA has referred to membership retention as the “Achilles Heel” of the fitness industry.
“But who cares?” You might question. “Even if people leave, new members will just come in and replace them.” However, the statistics indicate that this may not necessarily be true. The 2018 State of the UK Fitness Industry Report shows that the rate of growth of the fitness industry is slowing – during the 12 months to March 2018, the number of fitness facilities increased by 4.6 percent, as compared to increases of more than 5 percent in the previously recorded period (March 2016 to March 2017). IBISWorld, an international market research company, has made a similar warning, recently predicting that Australia’s gym market may reach saturation in the next five years. This means that there is no guarantee that there will always be new members to make up for the revenue (and love) lost if your current members leave.
Additionally, apart from ensuring the longevity of your business, there are also inherent benefits to higher membership retention rates. Firstly, focusing business strategy on retaining existing members rather than attracting new members is likely to result in some real costs savings, since, as the Harvard Business Review notes, the acquisition of new customers entails unique costs. For example, the costs associated with advertising, new member discounts, and the practice of giving ‘free trials’. These costs are not incurred with the retention of existing customers. Thus, a shift in business focus towards retention will bring about costs savings, and accordingly, higher profits.
Secondly, improving your membership retention rate can also improve your rate of growth. With a more consistent consumer base, meaningful relationships between these regular members (and even between staff and members) are more likely to develop. This sense of belonging can drastically improve the member experience. As Phillip Mills once said, “people join to get results and motivation, but they stay because they make friends”. When people enjoy and have confidence in your business, they are more likely to recommend your business to others, bringing new customers to your door! Retained customers, therefore, could also be a valuable form of word-of-mouth advertising for your business.
In the first part of this article, I showed that membership retention is really, really important for any successful health and fitness business, and that it is often a problem for businesses within the fitness industry. Why might this be the case? I suggest three reasons.
Firstly, fitness culture is changing. The concept of holistic fitness is becoming more popular, people are demanding greater variety in their fitness regimes, and companies such as ClassPass and GuavaPass are stepping up to meet that demand. This means that the idea of long-term commitment to just one type of fitness facility or workout is becoming increasingly unattractive to consumers. In the Internet age, there are also an increasing number of resources available for free online that allow people to work out from the comfort of their homes, without spending any money!
Secondly, staying fit isn’t easy. At almost every point of one’s fitness journey, there is the temptation to quit. At the beginning, fitness is difficult because one hasn’t yet developed the habit of regularly turning up to the gym and working out. Even when that has been overcome, the motivation to keep exercising diminishes as one becomes more experienced, and session-to-session progress slows down. In addition, people often undergo life changes that make it difficult to keep up with their fitness routine – people go away to college, start demanding new jobs, or have babies. There are many exogenous factors that can make someone leave a fitness gym or facility, membership retention strategies aside.
Thirdly, and most importantly, health and fitness businesses simply aren’t doing enough to ensure that their members stay in the long-run. If businesses don’t actively prioritise membership retention, they won’t account for it in their business and resource allocation strategy. Many businesses even actively divert energy and resources into attracting new members rather than retaining existing ones. As has already been discussed, this is a big mistake, and is likely to be a significant source of the retention problem in the industry.
If you’re reading this article, you’re probably interested in improving your health & fitness business’ retention rate. Although every situation is unique, one thing to be mindful of is the existence of ‘first-mover advantage’. First-mover advantage is the advantage gained by the initial significant occupant of a market segment. Although this phenomenon usually refers to the gaining of technological leadership or resources, it is also applicable when a business emphasises membership retention amidst an industry that does not. As illustrated earlier on in the article, low membership retention is a striking problem throughout the health and fitness industry as a whole, and businesses haven’t caught on yet. But you have.
So, start thinking about your membership retention today. Look closely at your demographics, the people behind your profit line. Think about how to make them feel happier, more included, and more engaged. Think about developing relationships with them for the long-run, not just for the now, and start considering the resources you may need to do so. Start today, get that first-mover advantage, start retaining your members, and watch your business grow!