When I ask fitness club owners whether they focus more on membership sales or retention, they usually answer, "both". There is often a reluctance to make one more important than the other. Today I'm going to encourage you to pick just one. My advice is to make member retention your number one priority, and the reason for this is very simple: good retention practices will lead to increased sales, but good sales practices will not necessarily lead to increased retention.
Many sales focused fitness clubs have learned this lesson the hard way. They have made promises in the sales process in order to meet quotas. Sales people do whatever they have to do to get as many people to join before the end of the month. The fitness staff often does not meet the promises made by the sales staff, and the result is disappointed members who quit.
Then the cycle starts all over again. Marketing costs are high, large sales staffs are required, employee and member satisfaction is low, and the reputation of the business suffers. Sometimes it seems that the fitness club is working very hard just to get enough members in the front door to compensate for the ones that are going out the back door.
"Good retention practices will lead to increased sales, but good sales practices will not necessarily lead to increased retention."
Deliver on the Promises
Good News: Fitness clubs can break this cycle while still making the same kinds of promises in the sales process. All they have to do is deliver on the promises. Sales rates will continue to be good and the number of people who get disappointed and leave will be reduced.
By doing a better job of meeting the needs of members, it is possible to have the best of both worlds: get more members and keep more of them. For such a strategy to work, the cost of providing the additional support to members need only be less than the benefits of keeping more members.
To justify the cost, one needs to look no further than the most obvious benefit: increased revenue. How much revenue are you losing due to members quitting???
The Cost of Lost Members
|a. number of lost members/month
|b. dues revenue/member/month
|c. non dues revenue/member/month
|d. total revenue/member/month (b + c)
|e. monthly cost of lost members (a x d)
|f. annual cost of lost members (e x 12)
It does not take long to realize that even a small improvement in member retention will have an immediate and significant positive impact on membership and non-membership revenue. If your fitness club were keeping more of its members, to make the same amount of profit you would actually need to do less marketing and could have a smaller sales staff.
But I'm not suggesting that you reduce what you do in the area of sales; in fact I recommend using your focus on retention as a specific sales strategy. Tell people how much you do for your members - it will lead to more sales. Sell more, keep more, sell more, keep more…pretty soon your biggest problem will be what to do with the excess profits!
Sell more, keep more, sell more, keep more…pretty soon your biggest problem will be what to do with the excess profits!
A Story of the Oakwood Athletic Club
The Oakwood Athletic Club in Lafayette, California has found themselves in a situation many club owners dream of. The job of their membership sales department is to manage the waiting list of people who want to join the fitness club.
When I was given a tour of this amazing facility, their situation did not surprise me. Yes, it's a beautiful facility, they have all the latest equipment, and their staff has all of the necessary expertise, but what struck me more than any of that was how the staff at Oakwood are actually doing the things many fitness clubs only talk about when it comes to retention:
The Oakwood Athletic Club simply take great care of their members. They identify what the members' needs are, and they fill them! The benefits the club receives for doing all of this are enormous. The staff is relaxed, enjoying their interactions with the members. The fitness club is able to charge a premium for dues with minimal complaints, the building is busy but not overcrowded.
- they know the members by name
- they pay attention to the members
- they help the members (even if it's "not their job")
- they keep the facility meticulously clean
- they communicate with members they have not seen in a while
Ownership, members and staff all seem to be very happy, and why wouldn't they be? Together they have created a family environment where anyone would enjoy working or "playing". This is just one example of an organization reaping the benefits of being primarily focused on member retention.
"A fitness club can get at least an additional three months of membership by getting people into the club at least once a week in their first 30, 60 and 90 days".
In order to effectively improve performance in the area of retention, a fitness club must be able to identify which of their members are most at risk of quitting. The best way to do this appears to be by tracking facility usage of newer members.
The Fitness Industry Association's "Winning the Retention Battle" report shows that a fitness club can get at least an additional three months of membership by getting people into the club at least once a week in their first 30, 60 and 90 days of membership. What is alarming is that without any kind of intervention 30-40% of these new members are not using their fitness club at least once a week. Clubs like Oakwood are obviously doing much better than this.
Deliver What Members Really Want
Like it or not, our industry has a reputation. When we tell our prospects that, "we really want to help you reach your health and fitness goals", many still hear, "we want to sell you a membership". The only way to get beyond this is to prove that we are serious about helping our members be healthy and fit. By identifying what the member really wants and needs and delivering it.
When enough health clubs are using that approach, clubs will be more profitable and the reputation of the entire industry will finally change.
About Robert MacPhee
Robert MacPhee is the Founder and President of Heart Set on Fitness. His company's programs are designed to help members and prospects reach their fitness goals through learning a mental approach that gets them more of the results they want.
Mr. MacPhee believes that the next major trend in the fitness industry will be created by effectively addressing the reasons why more people do not exercise regularly even though they know the benefits of doing so.
Go to author's contact page.
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