The Facts About Customer Retention in the Fitness Industry
Member retention is a critical metric for the long-term success of a gym or fitness facility. Over 80% of the revenue of a health club comes from membership fees, making member fees the sole driver of growth and profit for the business. It’s no wonder that many gym owners strive to bring new people through their doors to seal new memberships, especially considering the average churn rate (member loss) at a gym is 27% annually according to a study by the Association of Fitness Studios. However, according to the Harvard Business Review, acquiring new customers can be up to 25 times more expensive than retaining the existing ones. And a simple 5% increase in existing member retention rate can lead to a 95% increase in profits. With that in mind, how can gyms shift their focus to retaining their members instead of acquiring new ones?
Step 1: Understand Why Customers Cancel Gym Memberships
The first step to increasing your retention rate and growing your business is to understand why your clients cancel their gym memberships. For many people, the energy barrier of finding a gym is high. Once a new member is acquired, the main worry is not that they might leave due to competitive businesses — people simply don’t want to spend more time researching other gyms or the hassle of switching their membership — it is simply about keeping them coming to your facility. Remember, attendance = retention.
As we researched this topic, it became clear that the most common reason a person will cancel their gym membership is a loss of motivation. Some other reasons people list for canceling their memberships include perceived lack of progress, not having enough time, too expensive, or not receiving the right training, which we will also cover. But, if you can keep a client motivated, you can win their loyal membership.
Check out our FREE mobile app to help keep your clients motivated long-term:
Step 2: Help Gym Clients Maintain Motivation
It’s not hard to guess that the majority of new gym members sign on in January (according to IHRSA). However, 80% of gym goers who sign up on a high of ‘New Year New Me’ motivation will quit after only 5 months (reference). Knowing the impact of retention and the cost of acquiring new gym members, there is a huge opportunity to increase revenue during the other 7 months of the year if a gym manager can figure out how to keep those January members motivated.
Several studies have shown that the greatest motivator regarding physical fitness is competition. In fact, studies have shown a 90% increase in activity levels through friendly competition. The key: make the competition something that is attainable by anyone and fun for everyone.
The major reasons people lose motivation are:
- Not keeping track of progress
- Setting unrealistic goals
- Believing that progress isn’t happening
Your goal as a gym manager should be keeping your clients motivated until solid habits are formed. You can do this by helping your members set healthy goals, track their progress, and understand that progress is based on the action of following through (reference).
How? By providing your clients with challenges they can achieve, you are providing them with realistic goals and giving them the framework to track their progress. By providing them with attainable, fun challenges, they have something to work toward other than watching numbers drop (or stagnate) on the scale. If this sounds impossible, this is why we created FytFeed, which is a free social platform that gives gyms a space to easily run challenges without spending extra time or trying to get your members to buy any extra devices. Challenges help boost attendance and usage rates, which are directly tied with increase retention rates (attendance = retention). A new member who visits the gym 3 times per week in the first month is 78% more likely to renew (link). They also begin to form the habit of coming to your facility, which can result in even better retention rates. By having ongoing challenges that set that goal for patrons, they will be much more likely to follow-through.
Step 3: Generate More Community
Humans, by nature, are social creatures. In fact, a sense of community resulted in clients being 56% less likely to cancel their membership, than those who do not feel a sense of community (link). Whether your gym allows members to come and go as they please, or you have multiple locations, for some gyms and fitness facilities, this can be difficult. In these cases, you can create an atmosphere where clients see one another reaching for and achieving goals both in-person and virtually to provide an extra boost to the sense of community. In addition, if members can engage and encourage each other as they progress in their fitness journeys, they will be much more likely to stay motivated. On a platform like FytFeed, your clients and you, as the gym manager or employee, also can engage with member activities and encourage them to reach their challenge goals easily.
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.” (link). The good news is that in today’s world, you can do this online. By providing your members encouragement to keep reaching their goals easily through an online platform or virtual messaging, you can strengthen the bond your client feels with you and the facility. If your clients feel like you are invested in their progress, they will be much more likely to continue their fitness journey with you. The key is to find ways to impact each member that are sustainable for you to maintain. Bonds like this lead to peer-to-peer marketing, which is the most effective form of marketing for obtaining new members.
Retain Your Gym Members!
Remember, finding sustainable ways to retain your gym members is cheaper than bringing in new members and can lead to substantial increases in profits. A 5% increase in member retention can result in a 95% in profits. Obtaining new members can be up to 25 times more expensive than retaining existing clients.
The #1 way of retaining members is keeping them motivated, and the #1 way of keeping people motivated is through sustainable challenges and friendly competition. Challenges also give clients a tool to track their progress, which is another reason people tend to cancel their gym memberships. You can use quick and easy tools like FytFeed to help you create challenges with your clients.
Generating community increases a client’s bond with your facility. Luckily, you can do this in a sustainable way using online tools. You can maintain relationships and encourage motivation by setting up challenges that include online/virtual interactions with apps like FytFeed.
By using these simple tips for increasing your gym member retention rate, not only will you boost your profits but also better serve your members and the community!
Easy Tools to Retain Members
Check out our FREE mobile app to help keep your clients motivated long-term:
Shout Out!
This article was originally published by FytFeed on the Medium group In Fitness & In Health. We want to thank In Fitness & In Health for accepted our submission. They have tons of great authors and resources.