Retain Your Base Membership

Taxes cut into your bottom line. Like taxes, when members cancel their memberships, it comes right off the top. According to Michael Treacy in his book Double-Digit Growth, "when a customer leaves your company, it is like a tax on growth." If your fitness center grows 20 percent annually, but you lose 15 percent of your existing members, three-quarters of your growth does nothing but replace the business you are losing. In this example, you would essentially be working until October just to make up the deficit, and only end up growing by a net of 5 percent for the year. The difference between your success and the success of the competing facility down the street likely comes down to base retention. To retain your member base, you not only have to sell memberships, but you have to continually "sell" to your existing members. Work on implementing or improving the following four base retention strategies.

Make your services sticky

The first big step toward base retention is enticing your members into complex relationships. Members will be reluctant to go through the hassle of undoing this type of relationship in order to leave. Offer relevant, in-facility educational programs and innovative classes. Get members into personal training, massage therapy, nutritional counseling, incentive programs, or running or triathlon training programs. Promote repeat health assessments to track development and help members update their fitness routines. The goal is to entangle your members enough to create immediate economic value so no competitor will be able to come up with a big enough offer to outweigh the switching costs to your member.

Tailor your offerings

Information is cheap, and you likely already have a substantial amount of it. Use information from sources like health assessments, customer surveys and member applications to develop programs and services that members want and need. Create an offering for each member that will be difficult to find elsewhere. Customize the overall health and fitness experience.

Preempt defections

Wouldn't it be great if you could predict when a customer was about to cancel a membership? What if you could know why it was happening and how to create just the right response to prevent it from happening? You can and are able to do this. In some part of your fitness center, employees know a member who is disgruntled about a service gone awry, a price that is not perceived as being competitive or a service that has not been performed as expected. It may be the front desk or housekeeping staff, personal trainers or fitness instructors who hear about member dissatisfaction. The problem may be that employees who hear about a problem are not able to do anything to solve it. Perhaps the issue is not communicated to the person or department that can do something about it. Or, maybe the problem does get reported to the right person, but it's not acted on. To anticipate a member defection, use the information you have, and put procedures in place to predict the event with some accuracy. Then, develop effective responses that overcome the cause of the potential defection, and execute those responses effectively.

Bond with customers

Emotion plays a role in a member's decision to remain a member. Whether large or small, positive or negative, members' decisions to stay or go elsewhere is influenced by the relationship they have with your staff. From relationships with the front desk staff to the housekeeping employees to the fitness instructors and personal trainers, they're all important. Interpersonal relationships and emotional bonds can be used to overcome a weakness in value or a competing fitness center's offer. Emotional power cannot make up for everything, but it does play a significant role in retaining members and keeping them happy. All of the base retention strategies in the world cannot help you keep members if you are not constantly improving your facility's value to them. In addition to implementing these four base retention strategies, always strive to meet and exceed your members' ever-rising expectations.

Reference Treacy, M. Double-Digit Growth. Portfolio: New York, N.Y., 2003.