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Dec032012

The IHRSA Member Retention Report

The newest installment explains how clubs can use e-mail to increase member retention 

Since the dawn of the modern health club industry, approximately 40-or-so years ago, club operators have relied on the telephone and direct mail to communicate with their customers outside of the club. However, for the past 10 to 15 years, club managers have been able to take advantage of a newer form of member corre- spondence: e-mail. E-mail is faster, cheaper, and, in many ways, more versatile than the phone or direct mail. It can expedite a personal, one-to-one conversation or a mass mailing to every member of a club.

Now, a new IHRSA report confirms what many operators have long suspected—that e-mail not only is a valuable communication tool, but can actually help increase retention rates. According to the second 2012 edition of The IHRSA Member Retention Report, a study of more than 100,000 club members, those members who are at a high risk of quitting are the ones who profit the most from receiving a club e-mail. These members had significantly fewer cancellations and higher participation levels than members in a control group.

The study was conducted in partnership with The Retention People (TRP), a U.K.-based club consulting firm. 

“It’s no surprise that e-mail is a low-cost marketing tool for club operators,” notes Jay Ablondi, IHRSA’s executive vice president of global products. “However, the impact of e-mail on member retention and atten- dance isn’t always clear. This report explores the frequency and content type of member e-mails, as well as their impact on membership.”

The report discovered that not all e-mails are equally effective. It identified three member segments that demonstrated the greatest positive response to them. They are new members who joined within the previous three months, members who’ve been identified as being at a high risk of quitting, and ones who haven’t made use of the club within the past 7 to 14 days. 

Breaking the ice

As the report points out, it’s important to begin e-mailing members early on, so that they’ll come to expect to be contacted via the Internet, and will accept it as one way of interacting with club staff. It also represents an effective way to “break the ice” with some of the more nervous prospects or new members who, otherwise, might hesitate to step through the club’s doors.

Mark Miller, the vice president of the Merritt Athletic Clubs, a multiclub chain based in Baltimore, Maryland, uses e-mail to welcome new members and to encourage prospects to come in for a trial visit. “Approaching them initially through e-mail makes them feel more comfortable,” explains Miller.

E-mailing new members and individuals identified as those who are most likely to drop out, the report notes, also tends to increase the number of visits they pay to the club, and reduces the likelihood that they’ll cancel their membership. According to the study, motivational e-mails sent to these members can reduce their risk of quitting by 52%.

Vaughn Marxhausen, the area director for four down- town Houstonian clubs in Houston, Texas, attests that e-mail is the easiest and fastest method for a club to welcome new members and keep them interested in the club. “You have to start, from the very beginning, to build a relationship with members, while they’re still excited about their membership,” he says. “Otherwise, three months might go by, and the only personal contact they’ll have had is a ‘Hi, nice to see you’ from the front desk staff.”

Other high-risk members

In addition to new members, other clients who could benefit from more attention are those who have frequented the club less than twice a week during the first 60 days of membership, or those who, while they once frequented it, haven’t made much use of it during the past year.

E-mails can remind them about the reasons that prompted them to join, and can describe a lot of activi- ties and services that they could be enjoying. In some cases, of course, an e-mail can actually trigger a cancel- lation. For example, that can happen when the recipient has been considering quitting, but just hasn’t gotten around to it. That’s why Merritt Athletic doesn’t allow members to cancel a membership over the phone or via e-mail; they have to come in and talk with staff before they’re permitted to do so.

“We have a ‘Save’ program that’s a reverse needs assessment,” says Miller. “We go over their original goals, discuss whether they met them, inquire whether they were able to come in regularly, or if they had a problem finding time in the day, etc.” The goal, obviously, is to get them to reconsider their decision.

Targeted messages

The best type of e-mail, according to The IHRSA Member Retention Report, is an upbeat, motivational message that’s timed to avoid high-traffic times of the day, such as at 8 a.m. on Monday morning, when a deluge of store advertisements, e-mail newsletters, and company announcements flood people’s inboxes. It should also be directed at those individuals who are most likely to be interested in the information or offer. A well-targeted e-mail would not be one for 20% off a senior’s weight loss program that’s been sent to a young couple or to a senior who competes in marathons. 

“Generic e-mail blasts of the same message to an entire database of people will deliver fewer opens (of the e-mail) and far fewer click-throughs,” observes Phil Bonomo, the director of TRP North America.

Intelligent targeting reduces the number of e-mails sent—and received—which, in turn, keeps members from becoming frustrated about excess messages. For example, while Merritt Athletic e-mails some announce- ments to its entire membership, most are targeted at select audiences.

“We wouldn’t e-mail information about our new Brain Fitness program to 25-year-olds—they’re not old enough to worry about memory loss,” notes Miller. “But we would send it to 45-year-olds, who might have elderly parents with Alzheimer’s, and who might be starting to worry about the condition themselves.”

Marxhausen’s Houstonian Clubs categorize members by their interests—e.g., golf, nutrition, group exercise, personal training—and send out e-mails that appeal to their preferences. The company generally doesn’t send out more than two e-mails per month, so some of them may combine several related items in one dispatch—e.g., describing new equipment and new fitness program- ming, or introducing a new club employee and a new personal trainer. That helps avoid “information over- load,” and makes it more likely that members will open and read each e-mail.

“No one will read it if it’s not meaningful,” warns Marxhausen.

Face-to-face is best

While sending the right e-mail, at the right time, to the right person, can produce rewarding results, the best form of contact, according to the IHRSA report, remains person-to-person. Based on the research that TRP conducted on how members react to both e-mail and in-person contacts from club staff, the report concludes, “As an industry, our use of e-mail has a long way to go to catch up.”

Bonomo recommends regular in-club conversations as one way to deal with high-risk members who haven’t been making use of the club. For instance, they might be flagged as an irregular member in the club’s management system so, when they check in at the front desk, that infor- mation would pop up, alerting the staff. Or it could be employed each week to generate a list of at-risk members that member-retention staff would call.

“Everything should be aimed at adding months to the member’s journey,” stresses Bonomo. “For every month that’s added—more revenues go onto the club’s bottom line.” 

– Sue Hildreth, Sue.Hildreth@comcast.net    

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