(This is a guest post from Greg Mitchell)
It would seem that all franchise business owners and managers would relate to idea of how important it is not just to acquire new customers, but also how essential it is to retain them. Retention is important, and it’s backed by the data. It costs nine times as much to acquire a new member as it does to retain an existing one and according to a Harvard Business School study, if a company can increase retention rates by 5% their profits can increase from up to 25% – 75%.
No industry understands the importance of retaining customers better than the gym industry who make the majority of their revenue through returning monthly customers. Due to this importance and focus on customer retention here are five surefire ways to tackle the issue of member retention at gyms.
How to Greatly Improve Membership Retention Rates in a Fitness Franchise
1. Have A Robust Member Induction/Longer On-Boarding
The first step in a long term customer retention strategy is to create a comprehensive induction plan with a member focused on-boarding process.
Data suggests that more than half of new members in exercise programs drop out in their first six months of membership. This suggests that the induction period and starting few months of a new member are essential in retaining that member. To combat this issue we’d like to point out a member retention report written by a leading data scientist, Dr Paul Bedford. Dr Bedford’s report showed that increasing on-boarding activity increases the likelihood of retention. With two control groups, it was clear, the members with a more comprehensive on-boarding process were way more likely to remain active (87% on-boarding plus vs 60% regular on-boarding).
A more comprehensive on-boarding process would include, four or more on-boarding sessions (that may also help with point #3) which may include; offering body composition analysis, meeting with a personal trainer to discuss fitness goals, tracking the first 90 days of progress or offering a free class etc. An increased focus on fitness goals and a more active social presence during the first 6 months of membership is much more likely to keep your customers returning.
This brings us to the point of social interactions and providing your members with a sense of belonging.
2. Increase Customer-Staff Interaction
A study from ReAim (Retention and Attrition Management) demonstrates that the more interactions between customers and staff in fitness centers then the higher the likelihood of increasing the customers visits and, in turn, retention rates. The study indicates that if there are above 4 interactions of customers with staff members during their visits, customers are 80% more likely to visit again.
Member-Employee Interaction grid:
(ReAim- retention and attrition management- report)
From this data we can deduce that it is essential for all gym employees to not only be present at work but to be actively need interacting with as many members as possible. In effect this will decrease the amount of disinterest in coming to the gym and will increases retention rates.
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This brings us to interactions away from the gym and the idea of providing your members with a sense of belonging.
3. Give Your Customers a Sense of Belonging
This can be done in multiple ways. We need to ensure that when the customer leaves the gym they know that the gym itself is “in it with them” through their fitness journey.
Tracy Johanson founder and owner of Cuecd.com suggests that employees can create a personal or somewhat personal relationship with the members. In this scenario using the daily logs that a gym keeps, employees can keep track of gym members who are coming regularly and if a member is not present in the gym, messages will be sent to the members through internet or mobile messaging acknowledging the fact that these members are not present and the Gym “misses” these individual’s as they have stopped coming to the gym.
This form of communication is not only subject to the fact when customers are not coming to gym, it can be administered in any case such as new equipment arriving in the gym, new services that are being provided or new promotions which would be beneficial for the customer. Other more aggressive methods could be communicating to customers on special events for e.g. birthdays, anniversaries or provide expert opinion when customers have shown interest and devotion to a special program such as losing weight or muscle growth. Specialist feedback though has to be dependent on the customer you would want to make your customers as comfortable as possible, thus only when the customer has shown enthusiasm and thought to attain more feedback in regards to their workout etc., only then should the staff of any gym give special consideration to these customers.
Keep Your Members Happy!
4. Focus on peak hours to maximize customer satisfaction
According to the report by the IHRSA, many individuals choose stay at their gym because of the quality and variety of equipment, thus all gyms should be marketing the quality and variety found in their gym. They should also, more importantly, provide great customer service and proper maintenance of gym equipment.
Factors such as clean machinery and a clean gym environment will ensure that the service the customers/ potential customers are paying or will pay for is worth it. A recent research paper suggests peak times of gyms are 6am-8am, 12pm-2pm, 5pm-7pm from this information it can be formulated that all gyms should focus their resource’s on the cleanliness and physical presentation of its gym especially during these peak hours in which most customers are likely to come to the gym thus a strong physical presence in coordination with other factors will in turn help in retaining customers.
5. Look At Your Cancellation Data
Every gym generally has their own process when a member cancels their gym membership. However, this cancellation data can be essential in developing a full blown strategy of how to retain customers. In one example we have seen, we saw that customers are sometimes very willing to share why they cancelled the membership. The reason may be price, or moving away or even troubles with paying the membership. It is essential to understand what a gym can change i.e. a Planet Fitness franchisee wouldn’t be able to change it’s price, but the management could change “Not the best fit”, “Not Enough Equipment” and so on.
You can also find this type of feedback on social platforms, like Yelp, Facebook and Google. These reviewers have what is called the “The online disinhibition effect” thus they are more likely to be their true selves on the internet which translates into more honest reviews. Reviews that can help you retain your customers.
Bonus Tip: Your Membership, Your Choice – Flexible Payment Plans
Here’s one last bonus tip that you may be able to administer depending on the type of gym in question.
Yearly contracts prove to be more effective in retaining more gym members, however recently trends showcase a move toward month to month contracts as Gen Z and millennial crave flexibility.
Depending on the type of fitness center your run, either it be a big box gym or a group based fitness studio you would have to weigh the pros and cons for their specific tip. One can also look at cancellation data to develop a better sense of membership cancellations (i.e. higher ‘no reason’ might lend itself to a younger gym hopping clientele).
However one aspect any fitness center can consider is provide flexibility within payment plans. Weekly, monthly or yearly, provide your members with flexibility in the way they pay, if you can not provide them flexibility in their membership contracts.
(Greg Mitchell is the Customer Relationship Marketing Director for Petra-1, a company that has been servicing gyms, fitness centers and health clubs with textiles and gym amenities for over 25 years.)