Why Health Club Retention Requires a Technology Solution

Here’s how you can arm yourself with today’s top digital tools.

Retention is a highly charged word in the health club space. Member attrition is a serious threat to the viability of long-term financial health. The entire health club model is based on improving people’s lives over a period of time. Having customers return to your club on a regular basis is the whole point of the business.

As the 2018 IHRSA Health Club Consumer Report states: “For many years, fitness industry research has held that there’s a direct correlation between the level of member usage and member retention. In essence: the more frequently a member uses their facility, the more likely they are to remain a member.”

In industries of all types, the costs of attrition are significant. The research firm Invesp released these figures from a recent survey:

  • Acquiring a new customer is five times more costly than retaining an existing member;
  • There is a 60%-70% success rate of selling to a customer you already have compared to selling to a new customer;
  • Increasing retention rates by 5% increases profits from 25%-95%.

These statistics tell it all. Retaining current members delivers numerous benefits to the bottom line, from upselling to money saved on costly acquisition strategies. You need a retention game plan.

Know Your Attrition Rates

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First, you need to understand your attrition rates and why some members quit. The average health club has an annual attrition rate of 28.6%, according to IHRSA’s Profiles of Success. You need to determine your club’s attrition rate.

According to IHRSA’s e-book: Maximize Your Revenue With These Powerful Retention Tactics, measuring your club’s member attrition numbers by a percentage is limiting, because the percentage does not take into account how long each member has been retained.

To understand how to improve retention, you need to determine the retention rate (the proportion of members who stay for a predefined period of time) and the customer lifetime value (the average length of time members stay and therefore how much they pay in membership fees, training sessions, and classes).

Next, make sure you’re doing the basics to create an environment that promotes member satisfaction. IHRSA research and industry experts have discovered a few evergreen ways to increase retention rates, including:

  • Encourage social interaction. As many as 70% of club members who had made new friends through their membership self-identified as club promoters rather than club detractors.
  • Direct staff to interact with members. Almost 90% of club members say they value communication from staff members. Every two interactions staff have with members in a given month results in an extra visit the following month.
  • Identify likely dropouts and reach out to them. The members at the highest risk for quitting your club are those who have not attended for more than a week but have attended within the last two weeks.
  • Place a priority on recruiting members for group exercise. Risk of cancellation among members who don’t exercise in groups is 56% higher than those who exercise in groups.
  • Focus on the little things. Think of the friction points that may sour members on your club. These include parking convenience, cleanliness, policing problem members, equipment maintenance, and having friendly front desk staffers. Cumulatively, these minor issues can make a huge difference.

All of these fundamentals of quality club management are important, but with today’s technology, you have more tools for increasing retention than you’ve ever had before. You need to take advantage of them.

Engagement Is Key

As evidenced by the list above, a common feature of successful retention is engagement and communication. It’s all about touch points.

As the IHRSA Consumer Report referenced earlier says, “Success with member retention and member monetization are highly dependent upon the frequency of interaction between the business and the member; the more frequent the interactions, the greater the likelihood of success in monetizing and retaining members.”

Increasing member engagement can be challenging. Facilities are now experiencing fewer in-person interactions with their members, and those members are exposed to alternative experiences. In other words, members are much more likely to belong to more than one club at a time than in years past.

This doesn’t have to be a disadvantage. You no longer have to rely on personal interactions to increase member retention. Connection with members by push notifications, email, and text messaging doubles the likelihood that they will be committed customers.

In the IHRSA webinar, Create a Member Journey that Drives Legendary Loyalty, Dustin Schnee, regional fitness director of Merritt Clubs, mentions “The Rule of Seven” in marketing. The idea is that people need to see your marketing message seven times before they take action. As a result, it’s important to connect with new members right away, then create a plan to maintain the relationship.

“Create an immediate welcome email or video presentation that will introduce the new member to your club’s offering,” suggests Schnee. “New member emails have a 59% open rate compared to 15% of normal emails.”

You need the tools to initiate and maintain these mobile communications. And the messaging needs to be targeted, meaningful, and, if possible, personalized.

Using SMS, Email, and Push Notifications for Retention

Most likely, your existing CRM doesn’t have all the digital muscle you need to effectively engage with members via messaging apps and social media. Gleantap does. Gleantap is a customer engagement platform that creates powerful digital strategies for health clubs using analytics, SMS, email, and push notifications.

Gleantap is focused on pushing the boundaries of what mobile messaging can do for businesses. Their multi-channel customer engagement model uses the most up-to-date strategies in analytics and segmentation to deliver potent targeted marketing.

Some customer-engagement companies generalize their outreach services, saturating customers with too many messages that fail to have an impact on consumer habits. Gleantap uses smart analytics, such as churn predictions, behavioral analytics, personalization, and retention cohort analysis to deliver scalpel-like precision to communicate with new and existing customers.

Every club is different. Gleantap can work closely with yours to develop the ideal retention game plan for you. These systems can be complicated, but Gleantap will walk you through the strategic approach that fits your needs. Their full-service account manager will set-up and run campaigns for you, so you’re free to do what you do best as a club owner.

Gleantap’s technology works with most existing CRM systems in the health club industry, so integration isn’t an issue. They can come in and work with your current platform to help you get the most out of your retention strategy.

To learn more about Gleantap’s solutions for retention and engagement, visit their website and schedule a demo so you can see their applications in action.

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Jim Schmaltz

Jim Schmaltz is a contributor to IHRSA.org