“Stop Running in Place” By Keith Catanzano, Co-founder & Partner, 2 River Consulting Group

No single retention program will keep all your members coming back to Golds Gyms month after month. Real improvements require using your plentiful customer data to design a more personalized and relevant approach. Big data isn’t just for big companies. 2River Consulting Group can make your data work for you. (www.2rcg.com/fitness)

Member attrition is expensive.  Every year many clubs have to replace 30% to 50% of their members just to stay even.  You’re running in place.  Every replacement can cost a few hundred dollars to attract.  You aren’t left with many resources to grow. Improving retention is the only way to break this cycle and start growing. But how?

Well, there’s no magic bullet. No one program will keep all “at risk” members coming back. Members leave for different reasons at different times. A program that is effective at retaining a new member may have no effect on a seasoned user who has decided to explore other options.

But, there’s hope if you let your data be your guide. Fitness clubs have a comparative advantage when it comes to data. You have a wealth of customer information — usage data, membership profiles, billing information, user surveys – right at your fingertips. Your members are all unique individuals. But when you examine this data, you will find they fall into natural segments with other members who react in similar ways often for similar reasons. It is possible to identify, within these groups, member lifecycles and predict at which points on their lifecycles members might quit. It is key to catch members at these points before the urge to leave takes root. And often these groups’ characteristics can help you decide how valuable they are, establish their natural usage level, and identify some of the triggers driving them away.

With this new intelligence on your members, you can improve retention by reaching the right member, at the right time with the right, relevant message.  Rather than one size fits all, your retention program will be directed and nuanced, but still cost effective.  And quite frankly, in the digital marketplace, it is what customers expect. Consider your email inbox last week as the holiday shopping season launched. No doubt it was chock full of emails from retailers who used every scrap of information they have about you — your on-site behavior, past purchases, amount spent, location, age, gender, etc – to craft a personalized, relevant message. In today’s noisy and crowded market, a message with an irrelevant offer is just spam.

So, how might a more personalized approach to retention work? First, remember, every club, including each Golds Gym, will be different.  Your club won’t be exactly like these examples that are composites of several very different clubs.

In some clubs we see a spike in attrition 60-90 days after a member joins. The member started strong…and then life got in the way; perhaps the member joined because of $0 down…but didn’t build a strong habit. Further analysis of these members can uncover different groups.  That allows you act decisively in a targeted fashion.  Here are some steps you can take:

  1. Generate a list of members who have been with you for 90-120 days and whose workout habit degraded after their first month.
  2. If any of these members didn’t complete the free fitness screening you offer during on-boarding, schedule a time with them.
  3. If in their first month they tended to work out Mon-Fri at lunch or before/after work, let them know what programming you have that fits their schedule.
  4. If they used kids club in the first 30-60 days, let them know what new programming you have for kids (make their kids happy and they’ll be happy).

Attrition isn’t just in the first few months.  Our analyses have identified danger points later in the cycle.  Exactly when varies depending on several factors – dues level; club culture; target audiences.  But 12, 18, and 24 months out, some members will get restless.  Again, it is possible to identify and group these people.

Identify groups of members who seem similar in many ways, but one group terminates at a higher rate, can prove particularly helpful.  It turns out that subtle differences between these groups can lead to exciting retention programs. For example, long-term members working out more than once per week tend to have much better retention than those working out only once per week. So, Golds Gyms should create programs to encourage the “once a week” member to become a “twice a week” member.

Although you may have a very large group of long-term members who aren’t using the club at all, we recommend focusing on the members who are working out at least once a month. This is both cheaper than focusing on members who haven’t worked out in months (there are usually lots of those members) and has a better chance of working because you are focused on members already working out. Here are some steps you can take:

  1. Find out what time of day they come in and let them know about other programming at those times on other days.
  2. Let them know about events your club is involved in within the community (races, outdoor classes…).
  3. Ask them to provide input on programming they’d like to see (sometimes simply asking for their opinion helps them engage…and may give you some new ideas).

Remember, this is a long run – not a sprint.  One size does not fit all. But, by taking advantage of your existing data to understand and target the natural segments in your membership, you will have a dramatic impact on retention. Creating programs geared specifically to them will pay off. Combine this with an understanding of your most valuable members will let you create targeted pilots using your scarce resources to the get the greatest benefit for your club and for your members’ health.

Keith C

Keith Catanzano
Co-founder & Partner
2 River Consulting Group
http://www.2rcg.com

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About GGFA

The Gold's Gym Franchisee Association is the independent voice of the Gold's Gym franchisees.
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