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.
May 30, 2019 Beth Cadman
Referrals are not only a great way to boost sales figures but can actually help keep member retention rates high too, and therefore should be part of every gym owner’s retention strategy.
Any smart gym owner knows that no matter how much time, effort and budget they put into their marketing and retention strategies, without loyal members who are so impressed with their service that they are willing to shout about it and encourage their nearest and dearest to join, their retention rates may remain unstable.
Every new gym member is another person who needs nurturing, encouragement and attention to ensure they remain with the gym. This takes work, time and money, and while a gym owners primary focus may well be on finding new members and retaining them once they join, it is also essential to understand how retention links to referrals and why boosting referrals should be an integral part of the retention strategy overall.
According to the Nielsen Global Trust In Advertising Survey, 92% of people trust recommendations from friends. This means gyms are missing a trick if they aren’t gently encouraging members to get their friends to sign up too.
Word of mouth marketing is hugely influential and cannot be underestimated. A person may be mistrustful of a salesperson who evidently has their own agenda, i.e. to close the deal and make the sale. A friend, however, or even a stranger who bothers to write a review or say something positive on social media is more likely to be doing so because they genuinely believe in the quality of the products and services offered. Therefore, people are more likely to trust the opinions they receive this way and be persuaded by what they say. In fact, word of mouth marketing is the primary factor behind 20 to 50 percent of all purchasing decisions. Having a robust strategy to utilise this, and ensure that your current members are not only spreading positive messages about the gym but actively working for you by encouraging new members to join, can have a significant and hugely positive impact on member retention rates.
So why are referred members more likely to remain members?
One of the important factors to consider when devising a member retention strategy is how to keep gym members motivated. One key component that keeps people coming back to the gym is if they feel it is a welcoming space where they can interact with other members, socialise and have fun. According to a 2014 IHRSA Member Retention Report, almost 60 percent of members credit social motivation as one of the main reasons they continue to use the club.
People who refer their friends and relatives to the gym already have an established relationship; they’ll come together, workout together, spot one another, try new classes, and keep one another motivated, this makes them more likely to stay loyal members and, as a by-product, keep retention rates high.
Social influence can also have a profound and exciting effect on member retention rates. Meaning that if members say positive things about the gym and convince others to join, the new member will also feel positive towards the gym, having had their opinion and beliefs already shaped by their social interactions with their friends. As this study on Social Influence and the Collective Dynamics of Opinion Formation states: ‘In many social and biological systems, individuals rely on the observation of others to adapt their behaviors, revise their judgments, or make decisions.’
Customers who are referred come with an already embedded sense of positivity towards your business and brand. While this expectation must be met, the initial positive perception helps get more members onboard (therefore making your sales teams jobs a lot easier) but also carries with them as they begin to use the gym. If you can continue to meet their needs and expectations, they will likely remain and turn into a loyal customer themselves.
It is also important to note that encouraging referrals can have a positive impact on the referrer as well as the referred. By asking your members to refer you are strengthening your relationship, you are doing business together. You are also asking them and in turn reminding them to think of all the things they love about the services you offer. This can help members feel more invested in (and loyal to) a gym.
Referrals are likely to breed more referrals, particularly if you are incentivising your customers to do so. This ‘snowballing effect’ means that if your members have a positive experience they’ll tell others, and if they have a positive experience, they’ll do the same.
At the heart of it all; however, it is crucial for gym owners to remember that these newly referred customers still require the nurturing, the attention and excellent customer service that your current ones do. If you put all your energy into referrals and hugely incentivise your members to help you but do not then match expectations, retention rates will continue to fall and the time and money you put into creating a referral campaign could result in a poor ROI. Incentivising customers for referrals is fine, but encouraging them to do so organically and naturally is better, and you can do this by providing an excellent service. Then appeal to their ego, let them know that their opinion counts and acknowledge that they clearly have influence and are doing you a favour. Flattery will get you everywhere after all.
A study in the Harvard Business Review showed that bank customers who opened an account from a customer referral were 18 percent more likely to stay with the bank than new customers who weren’t referred. This is because people who refer are kind of like matchmakers. They go out and find people who they think would be a good fit for your gym, who would like what you’re offering. They aren’t just grabbing anyone off the street, and they are finding motivated, interested, engaged people – people who are more likely to remain members and keep your retention rates high — because of this focusing on referrals can be crucial and should be included in every gym owner’s retention strategy.
Book a 30mins demo, to discover more about how you can take back control of member retention with our powerful retention tool.
May 9, 2019 Faith Christine Lai
When it comes to creating a good business strategy those in charge need to look at the different ways their customers can relate to their business. An individual customer can have many unique kinds of relationship with a company, and each one must be nurtured in order to not only maximise revenue but to boost their reputation and reach, increase customer loyalty and improve customer retention.
With 53.5% of all new members terminating their memberships within 12 months, addressing the problem with customer retention has never been more vital. In the world of health and fitness, the levels of retention can be separated into various categories. In this article we explore each one in detail examining how gym owners can tap into them, communicate and resonate with their existing and potential customers, and help ensure that their relationship remains strong and positive, therefore lowering the number of members who may become at-risk.
For any business, getting the branding right is essential. Good branding will ensure that your company’s unique voice is heard, that what your business stands for is clear and that your tone appeals to your target audience. It needs to make a memorable impression and for that impression to be impressive. It gives the company identity and creates a sense of trust within the marketplace.
When creating their branding, gym owners should think about who they are appealing to and what they are trying to say. In the Harvard Business Review’s ‘Elements of Value Pyramid,’ social impact comes top, that means that customers care, perhaps now more than ever, that a brand is socially responsible and holds similar values to their own.
Branding is uniquely powerful in that people can feel they relate to a brand without actually knowing much about it or having any direct contact or experience of that brand. However, in terms of health and fitness, a good branding strategy not only attracts new gym members but also benefits levels of retention and reduces the number of at-risk members by creating a sense of pride in being affiliated with the brand and increasing members sense of loyalty towards it. Gym owners should be alert for anything that might damage their branding and reputation as even a perfectly satisfied member could become at-risk if they no longer feel that their views align with what the business stands for or if a once favorite brand falls from grace and is viewed as unethical or uncool – think the Kendall Jenner Pepsi ad.
How a member associates themselves with the gym as a brand is naturally linked to levels of retention, as while a member can be connected at a product level, i.e. connected to their gym membership, if they are not connected to the brand, the provider of that membership, they won’t feel that sense of loyalty to stick with that particular provider, and are therefore more likely to become at-risk.
People can relate to an industry if it aligns with their interests and beliefs. A person can also be persuaded to take an interest in an industry that they had not previously cared about if their interests dramatically change. For example, a person previously unbothered about health and fitness may have a health scare and suddenly want to know everything about it.
Businesses, therefore, must pay attention to what is happening within the industries in which they operate. For example, new trends in the health and fitness industry, if incorporated into the gym, may impress current members thus increasing member retention rates, as well as attract new ones. Paying attention to the latest news in the industry and communicating this back to members also shows that the gym has a vested interest in their health and has positioned themselves as an expert on such matters, and with over 38,000 fitness centres in the US, it is important to stay ahead of the competition!
Becoming a thought leader and incorporating new trends into the business demonstrates a level of care that goes above and beyond just providing products and services and thus strengthens the relationship gym members have with their gyms. Having an emotional connection is imperative, and the more a member feels looked after on a personal level, the more motivated they are to become part of the community and less likely they are to leave the gym.
The quality of products and services a business offers are naturally linked to how satisfied their customers become. Even if a company has excellent branding and has proven themselves to be experts in their industry none of this will matter if the products and services they offer are not adequate. Nothing is more damaging than negative reviews and the most frequent cause for complaint is if a customer feels short-changed by the quality of products or the level of service a business provides to them.
In terms of a gym membership, this means that owners must continuously review their pricing strategies, the range of services they offer, the quality of their customer service and the standard of gym equipment and facilities provided. Staying competitive in all categories is essential for it is important to note that while a customer can be extremely connected to the services the gym offers if they are not loyal to that particular organisation or it no longer provides them with what they need, they could become at-risk. Members who don’t have to queue for equipment, who are impressed with the standard of equipment and classes, as well as additional facilities such as changing rooms and social spaces, will feel as though they good value for money which is imperative in keeping levels of retention high.
The way a member relates to the gym is also deeply rooted in how connected they feel to it. If a gym dedicates time to nurturing positive relationships with individual members, for example, by motivating employees on the gym floor to talk to members and encourage them, or by organising social events or group exercise sessions, even offering free classes, competitions or discounts they can strengthen the sense of community in the gym. Doing so can increase positivity and encourage members to keep returning to exercise because they view the going to the gym as a positive and sociable experience. This Forbes article discusses why relationships matter as much as products and services in greater detail.
From the above, it is evident that there are different levels of retention and for gym owners to operate at the highest level, they need to devise smart marketing and retention strategies to nurture each one. It is a combination of engaging members across all levels that will lead to minimising the number of at-risk members and improving retention rates overall, as even failing to do so on one level, despite having continual positive engagement through the others, could mean a member decides to cancel their membership regardless.
May 2, 2019 Faith Christine Lai
How can gym owners, fitness coaches and fitness leaders ensure they don’t become redundant when so much information and technology is now available to gym members?
Fitness coaches and leaders are facing new challenges in the changing landscape of the fitness industry. With technology ever improving and the opportunities for members to learn and take charge of their individual fitness goals increasing, they have been forced to adapt their services to provide something fresh, engaging and more valuable to their clients.
The 2018 State of the UK Fitness Industry Report revealed that the fitness industry continues to grow, and now at least 1 in 7 people in the UK are gym members. This growth means fitness coaches have even more potential customers to whom they can market their services. However, the expectation of what a fitness coach should offer has also shifted, and customers who choose to employ their services expect tailored fitness packages that can do something over and above what now can be delivered through an app, wearable technology or even the gym equipment itself.
So how do gym owners guide their fitness coaches and leaders to find their place in this new era?
Previously a fitness coach may have discussed a client’s individual fitness goals, and then developed a workout programme that, if followed, should enable them to reach their targets. In recent times, a different approach is beginning to emerge whereby coaches instead encourage learning through experience. Their position now is rather to inspire members to take a vested interested in their fitness, to improve upon their knowledge, and, ultimately take charge of their workouts. This calls for a more fluid attitude to working out, with the individual modifying and developing their exercises as they become fitter, meet and surpass their original goals and set new ones.
Fitness leaders also have added pressure to increase their knowledge and understanding of fitness in addition to related subjects such as health, sports injuries, nutrition and so on for them to continue to remain valuable to clients. Without such expertise, members, who now have so much health and fitness information now available to them at the click of a button, may not see the benefit in hiring a fitness trainer in the first place.
More knowledgeable clientele further supports the idea that fitness coaches and leaders should use their (inevitably limited) knowledge to promote self-teaching. Doing so would enable them to become part of a cycle that continually encourages people to develop an interest in and understanding of their own fitness and health goals, passing on their wisdom, and then moving onto the next.
A gym member who feels in control of their workouts, who feels knowledgeable about their health and who has a desire to continue to learn and improve has a vested interest in their fitness and is, therefore more likely to remain a gym member in the long term.
Personalising a member’s experience is one of the most successful tried and tested remember retention strategies. At-risk gym members could also be targeted by fitness leaders and coaches who could offer their services to work with them to develop manageable but effective workouts that make them feel empowered, and that their fitness goals are within reach.
One of the main reasons gym members quit the gym is because they don’t feel part of a community. A member who feels welcome and who views going to the gym as a social activity is more likely to remain one.
Encouraging this sense of community has become another responsibility that gym leaders and coaches are taking upon themselves to perform. Where a few years ago, a fitness coach would focus on obtaining as many personal clients as possible. In recent times, gym owners have identified further opportunities for them to act in the capacity of teacher and guide, motivator and moral support – all of which encourage members who are demotivated or uninspired to reconnect with the gym and influence them to become active participants in their fitness, giving them the drive to continue towards their personal goals.
The digital age has also significantly impacted on the way personalised fitness coaching is delivered to gym goers. It is no longer necessary for a fitness coach to be physically present, and employing the services of a coach remotely has meant this once exclusive service is now eminently more affordable and accessible to the masses, and this personalised attention encourages demotivated members to continue using the gym.
Over the last decade, the group training sessions that were once so popular are being forced to step aside as the demand for more tailored 1:1 training sessions increases. People no longer want to feel lost amongst a crowd of others and are beginning to favour the benefits that personalised training techniques from a certified fitness professional can bring.
However, with growing market competition, it is up to gym owners to encourage fitness coaches to offer something more than just a tailored workout programme. Building close relationships with clients, providing dedicated training options and using technology to incorporate fun and contemporary approaches into workouts, such as gamification will help to see gym member retention rates increase, and ensure members are not lost to those gyms which can offer something more.
Offering specialist training in a particular field such as yoga, boxing or even sports nutrition could also give some gyms the edge over their competitors when it comes to attracting new members and increasing member retention. Similarly creating a USP around coaching where specialists in a particular area of health can offer their expertise to clients could also help gyms to gain an advantage.
It is important to remember, however, that there is nothing more impactful in business than good communication. Employing excellent communication strategies is where any successful fitness coach or leader will take advantage of advances in technology and learn how to use different platforms efficiently to entice new members as well as motivate existing ones. Personalisation is also vital and can increase click through rates by 14% and conversion rates by 10% on average.
However, the power of face to face communication and the ‘human’ touch should never be undervalued, and it is through a combination of embracing technology, developing new services and offering a personalised experience that fitness coaches, leaders, and the gyms that employ them can hope to see continued growth and increased member retention rates in the new ‘knowledge’ era.
April 25, 2019 Faith Christine Lai
One of the best ways to improve your membership retention is to make your members feel valued and important. “But how?”, you might ask. Well, as we’ve discussed a few times already on this blog, customers are increasingly demanding personalised service from brands.
According to the 2018 Accenture Interactive Personalization Pulse Report, an extensive 91% of consumers are more likely to shop with brands who “recognise, remember, and provide them with relevant offers and recommendations”. An important part of what it means to
In our article on risk scoring, we’ve talked about the fact that certain types of customers may be at a greater risk of leaving than others. Once you’ve accurately identified which members are ‘at-risk’, the necessary steps to prevent these ‘at-risk’ customers from leaving can then be taken.
For example, consider a hypothetical member, Jane. Jane signed up for the gym a few months
Do you know how long each of your members has been with your gym? There are two reasons why you should. Firstly, there is strong evidence that rewarding loyal members directly results in a better retention rate – 82.4% of respondents said they would be “more likely” or “much more likely” to shop at stores that offered loyalty programmes. However, you can’t reward your most loyal members if you don’t know who they are in the first place!
Secondly, the sort of correspondence you want to have with a long-term member is going to look very different from a new member. With a new member, your main goal should be ensuring that they are settling in as well as they can. In contrast, a long-term member ought to be acknowledged for their loyalty. They should also be asked for recommendations as to how the gym could improve; long-term members’ experience at the gym over time can yield valuable insights, since they will be able to compare existing gym strategies with old ones.
Even though everyone who buys a gym membership is fundamentally after the same product (gym access), their purpose for wanting that product is likely to differ widely. For example, while some members may be complete beginners to fitness just starting out their health journey, other members may be seasoned athletes looking to develop themselves further in their area of expertise. By differentiating why various members use the gym, you can make your communications strategy more effective.
For example, it would be pointless advertising a coaching certificate course or a high-level personal trainer to someone who’s just started exercising. It would also not be effective to promote a beginner’s kickboxing class to a seasoned MMA fighter. In contrast, imagine targeted communications that acknowledge a member’s purpose at the gym (e.g. lose weight), and make a meaningful suggestion that can help them achieve that goal (e.g. an introductory class to good nutrition). Not only will members feel more supported in their fitness journey, but you may also be more effective at selling add-on purchases — a win-win situation!
Think With Google found that 63% of people expect brands to use their purchase history to provide them with personalized experiences. There’s good reason for this. The services that members have used in the past are a good way to separate one type of customer from another. In the gym context, this could mean distinguishing members that only use the free weights section of the gym from those that only attend group classes. You could even dive deeper into the data, and examine what sorts of classes people are attending.
Understanding what services your customer base is using is an important first-step to serving them better. Once you have that knowledge, you can assign more resources to more popular services, improving the quality of the service that you provide. In addition, you can make targeted promotions and incentives, encouraging people to try facilities or services they haven’t used before, but that complement their existing purchases. The more reasons that people have to use your gym, the more value you provide to their life, and the less likely they are to churn.
Finally, categorising your members in terms of their financial situation is an integral part of any personalised communications strategy. One big reasons for customer churn is a lack of sufficient funds.
For members who may be in more precarious financial situations, such as students or contract workers, one engagement strategy would be to offer these customers a flexible payments scheme or to give them the flexibility to ‘downgrade’ their membership to a discounted rate (with perhaps some reduced membership perks) when necessary. After all, many businesses already offer student discounts, so why not take price discrimination one step further? You stand to gain more from retaining a customer at a discounted rate over the long run, rather than losing them altogether. Additionally, by showing that you are able to work flexibly around your customer’s financial circumstances, your customers will feel cared about.
On the flip side, customers who are working professionals or who are otherwise financially comfortable shouldn’t be offered discounts, or monetary incentives (for referral programmes etc.), since they are likely to be more price insensitive. Other engagement methods should be used with them for greater effectiveness.
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 11, 2019 Faith Christine Lai
Understanding the factors which affect a gym member’s experience can help owners refine their retention strategies to ensure customers feel satisfied with the service as well as loyal to the brand.
There are many reasons that a person might feel motivated to join the gym. Most commonly these reasons are related to health and fitness, losing weight, toning up, and getting in shape. Though there are others such as gaining strength after an injury or training for a specific event. These initial desires are what inspires a person to sign up for a gym membership in the first place.
However, it is through a continued positive experience when attending the gym and by developing a relationship with the brand that ensures a customer’s loyalty and prevents them from becoming at-risk.
It is a customer’s satisfaction overall that will safeguard their continued membership and make it easier and more predictable for gym owners to identify those who are unhappy with the service. Focusing on customer experience and identifying any issues means that owners can drive their resources and energy towards improvement and problem solving to address customer need and boost gym member retention rates.
Understanding the customer experience is, however, just as much about focusing on what makes people remain gym members as it is about knowing why people leave, as virtugym succinctly puts it: “People can leave for a manner of reasons but usually, it’s because of something that can be controlled by you.”
From the moment a person begins to consider joining the gym, they start to move down a particular pathway. They will perhaps start to research different gyms and consider factors such as the cost of membership, the convenience of location, and provision of facilities. They may search for gyms that offer trial days; they may book a session to look around the gym and talk with staff members, they may try to find offers or discounts or certain flexibilities that make the membership more appealing.
Gym owners, therefore, have a significant opportunity to provide a positive experience, one that makes their facilities stand out from their competitors even at this early stage. The ease of use of their website, the helpfulness and availability of staff to meet with them or talk to them, and the first impression of the facilities all play a part. These factors can all influence not only a customers decision to join that gym in the first place but also provide a lasting impression that could stick with them as they continue to use it.
When it comes to member satisfaction, there are a number of factors that gym owners and their teams can control to ensure a member has a positive experience from the moment they arrive, to leaving the gym and even beyond.
As soon as a person arrives at the gym, their experience can be affected. Can they park easily? Are they welcomed warmly on arrival? Is it easy and straightforward to get into the gym? Ensuring that as soon as a customer steps foot on the premises, they feel as though they are being given personalised attention and that it is a seamless and hassle-free experience to begin their workout, is essential.
Provision of facilities also plays a significant part in member experience. Clean, contemporary and practical facilities are a must, and the higher the quality, the more likely a customer will be impressed. Standard gym facilities such as changing rooms and showers are essential but to stand out, gym owners should consider what other facilities could make their customers feel more appreciated. Social areas, drinks machines, a shop and cafe all add value. However, it is also important to remember the smaller details such as providing hand soap and towels, and making sure the toilets have toilet roll (!) that will make sure the member’s experience is even better.
Fitness technology improves member retention and so provision of the latest equipment is important. It is also crucial that gyms provide a sufficient number of each machine, as well as making sure that gym members understand how to use the apparatus to ensure that their workout sessions are constructive and useful.
Self-efficacy is powerful as this study found, so providing instructions and training on how to use gym equipment is a must. Doing so will again reflect well in a customer’s overall experience and feeling of satisfaction, being respected and looked after.
If members have to queue for machines, or if they become frustrated because they can’t work out how to use them they will start to doubt that they are valued as a customer. If the machines are broken or out of order, or if they feel as though the variety or standard of equipment is not adequate these could all be factors which create a poor impression, make members feel less invested in or cared for, and therefore increase the likelihood of them becoming at-risk.
Gym members who feel connected to the gym are more likely to feel loyalty towards it. If they don’t feel welcome, become self-conscious or uncomfortable or find coming to the gym to be an isolating or challenging experience they will be less likely to want to return. Staff members out on the floor communicating with members, motivating them, helping and advising them and giving them personalised attention can help gym members feel as though they are part of a community, creating a sense of connection and lowering the chances of them becoming at-risk.
The above points all tie into the fact that gyms must continually pay attention to the products and facilities they provide, their communication and customer service and how they can make customers feel valued and motivated. 81% of consumers are more likely to give a company repeated business after good service, and companies that prioritise the customer experience generate 60% higher profits than their competitors, so it is certainly well worth including these factors in your retention strategy.
Understanding the specific struggles that gym members face is crucial and gives owners better insight into how to solve their problems. For example, if a member cannot find a parking space, can’t get on a machine they want to use, or can’t book a class because it’s full, combined with more general issues such as feeling demotivated or not enjoying their workout they may struggle to feel positively towards the gym. In fact, it is proven enjoyment of exercise plays a significant role with studies like this one reporting that those who enjoyed exercise at baseline were more likely to stick with it.
These factors should be recognised and addressed to help provide a better service and boost member retention simultaneously.
Of course, while it is not always possible to ensure that a gym member leaves the gym in a positive mindset, there are plenty of things that gym owners can do and strategies that can be put in place to help make coming to and working out at the gym more of a pleasure than a chore.
Attending the gym should be a fantastic experience from start to finish, one where customers feel as though they are being cared for, looked after, and invested in. It’s not just about the obvious things; it’s the details that count and trying to help customers leave the gym in a positive frame of mind and reflect that the experience was a good one will encourage them to return time and time again. Being able to analyse and identify patterns that could lead members to have either a positive or negative experience is an essential way to help gym owners and their teams recognise when a member may become at-risk and improve that experience before it is too late.
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 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.
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.
January 25, 2019 Faith Christine Lai
With the average person checking their phone 80 times a day, it is not surprising that an increasing number of gym owners are implementing strategies to utilise this kind of technology in their clubs.
The potential for wearable technology to motivate, challenge and ignite a competitive spirit in gym goers is extensive, and the use of such devices could lead to a notable increase in member retention. Not only that, but the opportunity to capture data and use it to identify and target at-risk customers is also considerable.
Studies have shown that 50% of new members on monthly contracts end their gym membership within eight months of signing up. This equates to around a $6 billion loss of revenue for the fitness industry each year. If gyms, therefore, can better understand what makes previously engaged members lose interest and ultimately leave the gym, the financial benefits are significant.
Now, more than ever, customers are results-driven, and impatient too. They don’t want to wait to find out their progress. They call for instant information on demand, whenever and wherever they are.
Health clubs are in a particularly favourable position to explore the possibilities of wearable technology and offering the use of wearables or tracking apps during workouts and classes could see customer retention rates soar.
In this article, we explore the potential that wearable technology and tracking apps could have on member retention and why club owners should seriously consider implementing the use of these devices as part of their member retention strategy.
A gym member who is accountable for their workouts and motivation needs to be able to assess their performance. Wearable technology can track progress during exercise, summarise post-workout performance and can compare this with historical performance data. This enables gym goers to take responsibility for their own fitness goals, to feel a sense of accountability, and to compete with themselves. They become active and involved in their own fitness and, as a by-product more engaged and motivated to continue.
Shawn Potocki, the owner of UFIT Personal Training in Hamilton, New Jersey, agrees that the use of technology keeps clients more interested in their workouts:
“My clients definitely feel more accountable when wearing a heart rate monitor or another forms of wearable technology. This is especially true when they are doing workouts on their own. The technology helps them keep track of their progress.”
Technology that allows members to set goals and track progress gives them ultimate control and means they actively participate in their workouts rather than being a passive bystander – and doing so naturally has a positive effect on member retention as more engaged members are less likely to feel demotivated, stop going to the gym and eventually end their contracts.
The number of people using social media increased from 0.97 billion in 2010 to 2.62 billion in 2018 and is set to rise even further in the future. Fitness clubs have realised that combining social media and wearable technology creates digital communities, increases socialisation, and encourages members to view workouts as something social, enjoyable and fun.
Gamification is the use of game elements and game-design techniques in non-game contexts to engage people and solve problems. Enabling gym goers to communicate with one another and compete with one another via wearable technology gamifies the process and encourages friendships to form.
People who feel that they are part of a community when attending the gym, and who view going to the gym as a social activity are less likely to leave, so encouraging these communities to develop as well as a sense of friendly competition can see member retention rates increase.
Gyms can promote communication and competition via the use of social media, apps and wearable technology pitting members against one another, creating virtual leadership boards and even setting competitions themselves such as ‘who can burn the most calories’, ‘who has come to the most sessions’ and so on. Seeing other members engaged in such a way could also influence those who are less engaged and encourage them to become more involved.
Wearable fitness trackers that can be linked up to gym equipment can turn both individual workouts and group exercises classes into a game, not only motivating members to push themselves harder but simultaneously increasing the sense of community at the gym. This feeling of belonging coupled with an increase in engagement in their workouts means members are also more likely to reach their personal fitness goals, increasing levels of satisfaction, motivation, and desire to continue.
According to Soreon research, the use of wearable technology in the healthcare sector is only going to extend, with a predicted increase of investments into the healthcare sector from $2 billion in 2014 to $41 billion in 2020.
The vast amounts of data gathered from apps and wearables can provide gym owners and their team’s crucial information that can help influence membership retention strategies and can be key to answering the problem of how to improve customer retention.
The information gathered from these devices can indicate which members are at higher risk of cancelling their membership, enabling staff to intervene and influence with measures to try and turn them around, be that through 1:1 attention and motivation techniques or through offering an incentive to stay such as free classes or personal training sessions.
Sending out reminders for classes that might interest members based on the data collected from wearables, as well as training tips and push notifications could also help to encourage at-risk members to continue using the gym. Using apps that inspire people to set their goals and track their progress when not at the gym such as inputting meals or additional workouts can also provide valuable insights into whether members are having trouble sticking to their goals – and if they are offering advice and support could help them get back on track.
Whether the gym is part of a multinational chain or a small local business, club owners are beginning to realise that improving member retention rates is key to their continued success, and the benefits of using wearable technology can play a meaningful part in this. Be it attendance, in-club spending, workout progress and fulfilment, or rating the facilities and customer satisfaction overall, all this data can be collected, analysed and used to improve customer experience from every angle.
Integrating wearables and tracking apps into the fitness experience and using this technology to gather individual membership data provides a powerful insight into how engaged customers are. This gives gyms the opportunity to become an essential part of members lives, improve their experience, increase motivation and offer them incentives, all of which will inevitably result in higher member retention rates and steady, sustainable growth.
October 30, 2018 Faith Christine Lai
Low-cost gyms are dominating the fitness industry. In 2015, the number of members at “budget club(s)” grew 69%, while the growth rate of “mid-market clubs” stagnated. As of June 2017, there were more than 500 low-cost gyms in the United Kingdom alone, accounting for an estimated 35% of all gym memberships, and offering membership rates from as low as £8.99 per month.
Besides cheap membership rates, low-costs gyms often share more than one common characteristic. Fernandez et. al. (2017) discovered that many low-cost gyms shared multiple characteristics, like running on very little manpower and offering a “gym-only proposition”.
However, the characteristics that make low-cost gyms so successful also create unique challenges with respect to membership retention. This article uncovers the challenges low-cost gyms face in retaining customers, and suggests that the right technology can meet these challenges head-on.
The business model of low-cost gym facilities can be summed up with one phrase: the essentials. Besides doing away with rarely-used facilities like cafés and saunas to maximise workout space, many low-cost gyms also allow gym members to access the facility without requiring a staff member to let them in. For example, the U.K.’s largest low-cost gym chain, PureGym, has an access system in which each member has a unique PIN code, and international gym giant Anytime Fitness provides members with electronic key fobs for around-the-clock access.
Since low-cost gym facilities depend on a low-manpower business model, they observe substantially lower recurring operational costs than traditional gyms, which depend heavily on staff members being present on-site. These cost savings can then be passed on to the consumer through attractively low membership fees.
However, the same systems and operations that make it possible for low-cost gyms to offer cheap memberships also present severe challenges in terms of membership retention. We know that gym memberships are often cancelled when members experience low engagement, lack in motivation, or lack sufficient funds to continue with the membership. Members of low-cost gyms are unlikely to drop-out due to not being able to afford the membership fee, but they are particularly prone to experience both low engagement and low motivation.
Consider the average new member at a low-cost gym. This member is likely to sign up, make payment, and receive their gym access information through the Internet. When they visit the gym for the first time, they may not encounter a single staff member, since, as previously mentioned, most low-cost gyms have enabled staff-free access. Finally, since many low-cost gyms also tend to have non-binding membership contracts, that same member could cancel their membership as easily and as quickly as they signed up – all without meeting a single member of staff face-to-face. This lack of meaningful engagement between customer and company inhibits the sort of community-building that we know improves member retention rates, and transforms the gym into a mere physical location, entirely substitutable for the next best option. In addition, a lack of member engagement also means that the gym is deprived of an avenue to find out their customer bases’ sentiments and needs. This makes it almost impossible to identify which members are at risk of terminating their membership.
Members of low-cost gyms are also prone to experience low motivation to exercise, which in turn makes them more likely to terminate their membership. Because it costs so little to join a low-cost gym, the sunk cost (incurred costs that cannot be recovered) for the average member is very low in comparison to a mid-range or luxury gym. A member of a mid-range or luxury gym may, in the absence of all other motivation, continue working out as a result of sunk-cost effect; they’ve spent a lot on their gym membership and want to get their money’s worth. However, the sunk-cost effect is negligible in cases of low-cost gyms. The aforementioned lack of engagement that members of low-cost gyms experience also hampers motivation because it results in a lack of accountability for the average gym member. After all, if a member at a low-cost gym stops turning up, it is unlikely that anyone would notice.
It is obvious, therefore, that many traditional strategies or gateways to improve membership retention inherently conflict with the low-budget gym’s business model. For example, on-boarding new members can drastically improve both short-term and long-term membership retention rates, but on-boarding every new member entails a sizable team of staff that many low-cost gyms lack. Similarly, strategic communication with at-risk members, and creating a personalised member experience seem unrealistic low-cost gyms.
That is, until you fully consider the power of technology.
Many low-cost gyms already incorporate technology in their operations. After all, the automated member access systems at most low-cost gyms run on fairly sophisticated data and technology. In fact, these automated access systems may already hold substantial amounts of crucial member data, such as the number of times a particular member has attended the gym in the past month. This sort of information is powerful, particularly when harnessed by the right technology.
For example, Machine Learning and Artificial Intelligence (AI) can utilise existing data to identify which members are at higher risk of terminating their membership, which locations (if a gym owns several) are more likely to see member attrition than others, and even provide custom class or product recommendations to members based on their gym activity. In fact, online fitness marketplace PayAsUGym has recently taken a step in this direction, signing a partnership deal with customer data expert InfoSum to gain greater insight into their customer base and to improve their customer retention rate.
With the right technology, a low-cost gym can generate a member experience as personalised as that at a luxury gym by acting as an intermediary between client and company – a role typically filled by staff. Technology might even be able to be more effective in understanding customer’s needs than staff members, since it is free from human error and available around-the-clock. Bye, bye, low 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!