There are many reasons to focus on member retention, starting from the very onset of the business. You may be thinking since you are a brand new business, you should strictly focus on getting new members and worry about retaining them down the road. However, keeping your current members is arguably even more important. The following are the top 5 reasons of why you should focus on member retention now, and some helpful tips to reach that goal.
According to ClubIndustry.com, “the cost of acquiring a new member is anywhere from five to 20 times more expensive than retaining an existing member.” New members are important, but are more expensive to acquire than taking care of your current members. The fact that new members are more expensive than current members should be reason enough. Expense is not the only reason to focus on member retention.
Establishing a great reputation comes from members being satisfied with the services provided. If members are leaving, the reason why is just a Google search away for prospective new members. While certain reasons like relocation are unavoidable, concerns like customer service and billing issues should be somewhat preventable and resolved quickly if they do occur. Additionally, waiting too long to respond to an issue can throw fuel on the fire, leading to an even angrier ex-member ready to take to Yelp. Be proactive and learn to avoid this type of concerns, then have a specific action plan in place to resolve them fully.
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3. Cash Flow
Keeping current members is less expensive, but your cash flow may also be directly impacted with poor retention numbers. Your monthly draft is one of the main appeals of a membership based business. The entire business can be impacted if this number does not reach certain benchmarks. When you can’t rely on the draft and cash combination to cover expenses, your marketing budget suffers. In turn, little to no marketing means fewer new members as well. Getting out of this snowball of events can be tricky since the monthly revenue is one of the main items examined if you consider bringing on new investors or taking on additional loans. You can avoid all of this when retention is a top priority.
A proper focus on retention leads to happier members, which in turn leads to positive reviews and more referrals! When people love what you are doing and are getting results, they post about it on social media, discuss it with their co-workers, and invite their friends and family to join them. Satisfied members combined with the right marketing efforts is the magic potion to fuel your flow of new members.
Perhaps you got into this business strictly for the money, but there is a good chance your fitness business has some deeper meaning to you than that. Take a look at your mission statement. Are you striving to truly help people live healthier lives? By creating a culture of loyal long term members, you are giving them a home away from home to make their health a priority. Of course you want to reach as many people as possible, but you do not want a revolving door where new members are coming in as fast as the old ones are leaving.
Tips for Success
Now that it’s clear keeping current members is a top priority, you may wonder what is the best approach. One helpful tip for great retention rates is to have clear tracking systems of any cancellations, and a regular process to review them like automated reports.
Some gym owners find it beneficial that only managers perform cancellations, giving your best staff the best chance at retention. You could also offer an incentive for these soon to be ex-members to engage and motivate them all over again — like a free session with a personal trainer. However, most often when a member wants to cancel, there is little that can change their mind. Focusing on member satisfaction is a better approach to expend your energy on. Ask your staff to focus in on as well.
You can work on various ways to keep members engaged throughout their term, and make their onboarding process go smoothly. Many will offer some free time with a personal trainer to help meet their fitness goals. It’s important to leave the member feeling more knowledgeable and empowered, not strictly attempting to close a personal training package. A private Facebook group is another idea for keeping members involved and feeling like part of an important group.
Finally, turn to your staff to help support retention. This is important in scenarios where they are the main point of contact. Create a financial incentive, like a small commission when a member stays past a certain marker (beyond 6 months). You could also structure a manager’s bonus on total members versus strictly new members added, or “net adds”. This is where you calculate the number added minus the number lost.
Ultimately, you want to strive to never lose sight of individual happy members being the priority. Hold this at as high of a regard as marketing for new members. Keep your member satisfaction as a top priority will put you and your new studio on a pathway leading to positive member retention numbers.
We understand change can be difficult. How can OneFitStop help your boutique fitness studio? Request a Demo to learn more.