We all have heard time and time again that it’s easier to keep an existing customer, client, or gym member than it is to go and get a new one. But did you know it’s also much less expensive? Industry experts say that it costs 5X more to attract a new customer than it does to keep an existing one. The good news is that you can easily do the right things before you have a problem, so you’ll be able to avoid the really hard work of trying to win members back after there’s a problem. To help you stay in front of any gym membership retention issues, we’ve compiled the following five tips that will make it a heck of a lot easier to keep the members you’ve worked so hard to win.
Know the Numbers
One of my favorite take-a-ways from business school is this: what gets measured gets managed. If you don’t pay attention to retention metrics, you’ll never know how you’re doing. You can read this blog to learn more about the importance of metrics and using them to stay in control of your business. To calculate one of our favorite retention metrics, annualized churn, see the footnotes.
Incentivize the Outcome You Want
It’s fascinating to me that when things seem to happen unexpectedly, we can later look back and see the outcome was somehow encouraged. Proactive business owners know the value of incentivizing for the wanted outcome. When it comes to retention, the MadLab Business Group does a good job of working retention incentives into instructor pay. This means that the longer a member stays in the community, the more income the instructor makes. You can bet an incentive like this motivates employees to do all it takes to keep members happy and in the community. To learn more, see the MadLab Business Group website.
Nurture a Sense of Community
No matter where we look, we find evidence that the communities found in fitness businesses have become a place we find our sense of belonging. We’ve written about it here, as have countless others who are considered industry experts. The takeaway is that gyms that do not provide a good sense of community will lose members to gyms that do.
Know Your Members
Genuinely knowing your members does two things for you-
1. You know what they want, and you know if they are getting it.
2. You reinforce the sense of community.
When a business owner cares enough to ask about members and their family/interests/progress, members are far more likely to stick things out if times get tough.
Listen to Your Team
Your team often knows what’s happening before you do. As managers and business owners, we’d like to think that isn’t the case. But it always is. Of course, as one of my former bosses used to tell me, the key is knowing which bits of information you should act on and which you shouldn’t. You find the real value in having your finger on the pulse like this when you combine the subtle bits of information your team picks up and the high-level information only you have. Doing this will give you a more comprehensive picture of what’s happening, and you’ll make the best decisions possible.
Weekly and monthly, it is important to look at your gross and net customer gains. Understanding the gained and lost customers is a good indicator of the overall experience your members are getting at your gym. Even if you’re growing due to new member on boarding, losing high quantities of customers or key influencers dramatically reduces the sense of community that members want. The best metric to track this is annualized churn, which is calculated this way: 12X(Total Customers Lost This month/ ((beginning customers + ending customers)/2))
To read more on the cost to keep a customer instead of replacing one, see the Influitive website.
Still looking for additional ways to help prevent member churn? Get your copy of our free Member Churn Prevention & Warning Signs guide.