Membership Retention: A Further Look

Without members, our clubs wouldn't even exist. Members are our hearts and souls, and keeping them is just as important, if not more important than selling to new members because the greater the number of existing members, the fewer new sales need to be made. In order to retain our members, we want their gym experience to be engaging, to provide them with an experience that makes them want to come back for more. 

The IHRSA Profiles of Success has shown us over and over again that our industry is getting better and better at retaining its members. Of course, if we intend to grow as an industry, it will be essential to continue to increase our sales, and thereby increase our retention rates. The universal definition for member retention and member attrition is as follows:

It is the business outcome of a club keeping its existing members after the initial membership sale, and subsequent enrollment of the new members. Successful membership retention means retaining the highest number of members for the longest period of time possible. Because members are at the heart of our industry, membership retention is a more important business goal than in other industry. Member attrition, on the other hand, is defined as the cancellation of a membership. It is therefore the opposite of retention. While attrition is inevitable, we want to delay and minimize it to the extent that we possibly can. 

If you're curious as to how a club calculates member retention and member attrition, the IHRSA gives us a formula for doing so. It looks like this:

  • You start by counting the number of members you have at the end of each month.
  • You then take the numbers you have at the end of each month, add them all together and divide by twelve. You now have your average member count for the entire year. 
  • Now add up the number of members who cancelled their memberships during the year. 
  • Next, divide your average member count number by the total number of cancellations. This gives you your annual attrition rate. 
  • Last, subtract your annual attrition percentage from the integer "one," which gives you your annual retention rate.

The value of a member and the value of member retention in our industry cannot be emphasized enough. The earlier a member cancels his/her membership, the greater the negative impact there is on profitability. Research done by the IHRSA, as well as the Fitness Industry Association of England found a number of reasons as to why members leave. After all the research done, one outcome remained certain:

A member bases his/her decision to stay at a club or leave a club largely on social aspects. Is there a partner to work out with? Do I feel as if I fit in? Am I getting the attention from the staff I think I need? Do I feel motivated? In previous blogs we've looked at the many factors that influence member retention. However, we've not yet explored the many strategies proven to improve member retention. At the end of the day, it's all about delivering excellent service that fulfills the needs of an individual member. Research has shown over and over again that the following approaches are what successfully drive member retention:

  • First off, don't sell the initial club membership short. Research shows that members who pay the initial enrollment fee typically stay longer than members who do not. What's more, research has also shown that the higher that fee is, the longer the member stays. 
  • Determine exactly what the individual member's fitness needs are and make it your focus to help them attain those goals. Making sure there is a program in place for a member to achieve his/her health and fitness goals is a surefire way to keep them around.
  • Make sure your members are socially connected to one another, as well as to your staff. We are pack animals and we naturally want to belong. When your members feel like they are part of a family, they are much less likely to leave.
  • Make certain your members stay active. Introduce your members to club activities and keep them engaged and interested. Members who are engaged in activities and projects at the club are far less likely to walk away.
  • Keep an open dialogue with your members. Continually checking in to see how your members needs change and grow is a huge part of retaining them. Set up a feedback system to ensure your members are being heard.
  • Make sure your club is clean and aesthetically pleasing. A beautiful and clean environment is a big part of member retention. No one wants to belong to a gym that lacks cleanliness. 
  • Make member retention a part of every staff member's job description. When the entire staff views member retention as part of their job, the energy involved in retaining members will expound. 

Join us next week to learn about how to create memorable experiences for your members!

Resources:

  1. Fitness Management by Stephen J. Tharrett and James A Peterson
  2. IHRSA Profiles of Success
  3. Fitness Industry Association of England