|Originally Posted: 07/07/09
Retention in the fitness industry is like your Uncle Bob, the one who comes to the family gatherings with a bottle of Canadian Club, terrifies the little kids with his bad breath, falls asleep in the living room, farts loudly whenever he can then giggles, and generally embarrasses the entire family. Like retention, you know he is there but no one wants to deal with him since he only surfaces once a year or so.
Most owners define the word "retention” as, "What ever happened to that guy, you know, he joined in January and was always on treadmill three at about 4:00?” Retention is not proactive to most us but rather reactive in that we assess the damage but fail to do anything to prevent it. Your jeans are too tight, you're just getting fatter, but it is easier to eat that next donut than it is to adjust your life. You live with the fat rolling over the top of your pants just like most owners live with large membership losses.
First of all, let's start with what is real when it comes to retention. Owners who claim they renew, or retain, 85 percent of their members on a year-to-year basis, always amaze me because I know they are lying but they feel the need to exaggerate their numbers for personal gain. If you want to be the president of some organization, and you're a local club owner reaching for national fame, then you stretch the facts to build the case that you are indeed legendary at retention.
Retention is what happens after you adjust for losses. For example, let's look at a club who signs up a 100 new members in a month, uses 12-month memberships and a strong, third party financial service company. Losses for 12-month memberships as a tool are about one percent per month (12% annual) and most clubs will lose about one percent per month from members who simply move away or have permanent physical issues (12% annual). The total for these two categories is 24 percent losses as reflected by the .76 collection rate below. Every club should target 60 percent of possible renewals as its goal:
(100 x .76) x .60 = 45.6
This represents a good club with low losses, a strong collection effort and a higher than industry average renewal rate and it still only retains about 46 members out of every 100 new at the end of 12 months. This single fact is what makes the fitness industry so difficult but it is our own fault. We have built failure into almost everything we do, from our training systems to the quality and dumbass level of our front counter kids.
A few things any fitness fool can do to help increase retention over time
Here are a few things any person crazy enough to own a fitness business can do now, cheaply, to increase retention over the next 12 months. Remember, everyone you save is one you don't have to pay a lot more to buy new in the market.
1. Thank every member every time they buy something or when they leave the club: Yes, I have mentioned this before and it still makes me angry. I support your business through my membership and through purchases made on site. Say thank you each time I leave. Be grateful. Be kind. And whatever you do, don't tell me to have a nice day.
2. Contact me once a week: Email me some motivating articles to inspire me. Take me to You Tube or Facebook for something to get me excited about fitness when I am sitting at my desk thinking about a beer rather than a workout. Let me know I belong to something bigger and that the club cares that I come and sends me stuff that makes me want to stay involved.
3. Twitter me: If I work with a trainer or nutrition person, send me something a few times a week to keep me involved with that department and person. Short sweet and learn to tweet.
4. Start a boot camp if you can: Going to a gym sucks when it is nice out. Offer a boot camp outside every Tuesday and Friday morning in a park near the club. Let members go for free. Charge guests $10 to do it for one workout. Advertise to secondary ad sources, such as church flyers or the shoppers. Remember that a guest paying a daily fee is nothing more than someone willing to pay to get pitched by my sales force. Keep the camp going year round. Use props and have adventures in fitness. Do anything to keep me from getting bored. Think of it as fitness without borders.
5. Every year validate the sale: I paid you for a year so send me a gift. If you are using open end, auto renewals, send me something I can use in the club, such as a smoothie card or usage package for something like tanning. If you are using closed ended 12-month renewals, which you should be using, then give a cool messenger bag or other gift that lets me know that my business was noticed and appreciated for the year.
6. When I sign up at least give me a stinking tee shirt: I drove past four gyms to get to yours. When I choose you give me something that proves I made the right choice and that you appreciate my business. If you can, give me a tee shirt, workout bag, water bottles and other goodies. My decision to stay at the end of my membership might be determined by how much you appreciate my business in the beginning.
7. If you want my guests, pay me: We will pay $5000 per month in the hopes that we get guests through the door. Buy 50 IPods instead and give one to everyone who brings a new member in that month. Don't give me a stupid ball cap to me to buy my guests. You want my friends, pay me; which again proves you love me and appreciate my support of your business.
8. If I last three years, make me even more special: It is an old idea, but revisit the VIP card program. Give every person who finishes three years with you a black VIP card that allows me to get anything in the club for 10 percent off and also allows me to bring in a guest who can sign up with no membership fee. I paid you for three years. Doesn't that merit some recognition in your business?
9. Clean and paint your place: Your club should be the best part of my day but most likely spend more time there than you do at home so you stop seeing what the club has become. Clean it every day and clean it while I am in the club, expect for the vacuum. Bring in a big crew annually and take it back to the way it was the day you opened it. Paint something every month to give me the impression that you reinvesting and that you are into details. Don't assume new equipment buys me off as service, as most lousy owners do. New programs are more important and that fact that what you do reflects real world fitness and not fitness that is 10 years out of date and based upon going around in circles on fixed equipment.
10. Answer the phone live and with three rings: Nothing, and I mean nothing, pisses off the customers off more, and especially the members at the club, then calling for help and getting dumped into an automated hell by electronics. No matter how small, or how big, your business is pick up the phone and answer live and within three rings. We have people paying us so treat them with respect and answer the phone with courtesy and energy.
This list could go on and on but the foundational element is the same. They pay so we should show them respect. Visit other clubs in your area where you aren't emotionally attached and hang near the front as you fake your workout. How many of their members walk by the counter without getting acknowledged as they enter and how many get ignored as they leave? The difference between your business and theirs is how you treat the people who are paying and the difference between high retention rates and lousy retention stems upon those same actions.