December 29, 2018 Category: Retention
As Kotler stated in his 1994 article, “The key to customer retention is customer satisfaction.” The core of any effective membership retention strategy is creating a positive experience of your brand for your customer. Such a positive experience often entails two main components.
The first component involves providing excellent customer service. It was found that 73% of consumers would consider purchasing from a brand again if they had a superior customer service. The second component is creating a sense of community. Humans are social creatures, who desire a sense of belonging. At gyms, members who’ve made a friend at the gym in the last three months are 40% less likely to cancel than those who haven’t.
Some common ways that gyms attempt to improve customer service and create a sense of community in a gym include group classes, the gamification of member experiences, and strategic communication. However, there is one commonly overlooked aspect of gym management that, if well-managed, can drastically improve both customer service and customer’s sense of belonging in a gym – its employees. In this article, I’ll explore the important role that gym employees play in customer satisfaction and customer retention strategy.
The experience that gym staff have of the company that they work for, from higher management to the brand itself, has a strong impact on the membership retention rate of that company. Besides your customers, the best advocates for your business are your employees themselves.
It was discovered that leads from employee advocacy are 7 times more likely to close, and customers referred by an employee advocate have a 37% higher retention rate. In addition, brand messages get re-shared 24 times more frequently when shared by an employee as opposed to the brand. This phenomenon is bound to be further magnified as the Internet grows in popularity as a source for recommendations, and more websites like Glassdoor (a website where employees and former employees can anonymously review companies and their management) emerge.
This means that how your employees feel about your brand has an influential impact on how your customers feel about it. Studies have found that studies have found that companies with high employee engagement scores had twice the customer loyalty than companies with average employee engagement levels. It should be no surprise, therefore, that according to a Hay Group study, engaged employees can cause companies to grow revenues twice as much as companies with lower engagement levels.
However, one cannot assume that their employees are reflecting their brand in a positive light. A startling close to 50% of employees in North America are actively discouraging those they communicate with from purchasing from or working for their employer.
Thus, in order to achieve healthy membership retention rates, employees of the company must first be engaged and motivated. Here are some ways that you might go about doing that.
The most straightforward way to find out what would motivate and encourage your employees is, simply, to just ask them. Never underestimate the power of creating an open channel of communication between employees and managers, particularly in organisations such as gyms, where gym owners and upper management rarely interact with gym staff on a day-to-day basis.
Find out what your employees enjoy most about their jobs, and what they enjoy least. If there are complaints that come up again and again, consider making some organisational changes. This process doesn’t have to be impractical or time-consuming. It could take the form of something as simple as feedback forms for employees to anonymously submit their thoughts about the company. If your employees feel heard, they’re more likely to feel valued by the organisation, which will, in turn, make them feel more connected to the company, and motivated to work hard.
It may seem tempting to ‘incentivise’ greater employee productivity through measures such as forcing employees to work for commission or to ‘incentivise’ better employee-customer engagement by mandating that employees engage with a certain number of customers every work day.
However, such strategies are fundamentally misguided, and will harm, rather than help, employee motivation. Dr. Paul Marciano, a Ph.D. from Yale University, found that the typical reward-and-punishment model is extremely ineffective at motivating employees. Instead, a whole variety of other factors including supportive feedback, respect, and empowerment are much more effective.
So, instead of constructing rigid organisational structures intending to compel employees to be more motivated and provide better customer service, how about investing in them instead? For example, employees of the health and fitness industry like personal trainers and group fitness instructors often have to invest large amounts of money into getting the necessary fitness qualifications to teach and improve in their career. A gym who wishes to invest in their employees could consider starting a ‘talent development fund’ to subsidise some of these training costs. This not only will make staff immediately feel valued, acknowledged, and supported, but will also improve the quality of service that they (and consequently, your gym) can provide to customers.
Once you’ve succeeded in winning over your employees, don’t forget to connect them with your clients. 70% of customer perception of a brand is determined by experiences with people. For example, encourage your employees to interact with your clients on social media once they’ve left the gym, or create fun social events in the gym space that are open to both clients and employees. This will not only link up your strongest brand advocates (employees) with your customers, but will also foster a sense of community for both customers and employees alike.
In this article, we’ve explored the importance of the role that employees play in ensuring high levels of customer satisfaction and customer retention. So, the next time you’re looking for brand ambassadors, don’t forget – they’re right under your nose!