What steps can you take to create happier members and employees, and increase member retention?
Next to membership sales, membership retention is the topic that generates the greatest level of interest among facility management circles. Almost everyone realizes that when a fitness center drives retention, thereby reducing attrition, membership growth in that facility is significantly enhanced. Not only does the facility increase its membership base, it also establishes a business environment where it can charge more for the experience it provides. But how can you enhance membership retention? Read on to find out how to create and sustain a culture of service within your fitness center.
The membership retention profit chain
The membership retention profit chain is a relatively simple process that begins with establishing a strong service culture and ends with higher levels of membership retention. As Figure 1 illustrates, the first step a fitness center should take to affect its membership retention levels is to establish a service culture.
What is a service culture?
A service culture is an interlocking system of customs, habits and conventions emanating from values that help establish an environment where the facility's employees are passionate about and empowered to deliver whatever is needed to create personally relevant and memorable experiences for other employees and members of the facility. Establishing a service culture may possibly be the most challenging business practice that fitness centers face in today's business environment.
The business challenge of creating a service culture
How hard can it be to create a service culture? On the surface, the task may seem relatively straightforward. On the other hand, it is far from that. Creating a service culture requires passion, commitment, discipline, vision, patience and a clear understanding that the business rewards of undertaking such an effort are not immediate. The reason so many businesses talk about great customer service, but can't match their words with their reality, is that they are unwilling to commit to do what it takes to deliver on their "lofty" statements. In a business climate where looking beyond current sales numbers or the next quarter's EBITDA targets is status quo, it takes courage to step back and embrace the need to establish a service culture that can sustain long-term business growth and profitability.
Steps to establishing a service culture
What actions can managers take to create a great service culture and initiate the journey to service excellence and memorable member experiences? The following steps can be particularly helpful: 1. Begin with core values that center on a service heart. The core essence of any culture is its values, whether it is the culture of a group of people or the culture of a business. As such, the heart and soul of any business culture lies in values that drive the behavior of each employee and the organization as a whole. Within any business, particularly a fitness center, these values are the foundation of the service spirit. Countless examples exist of successful club operators that have established values that foster a service heart and spirit. Examples of the service-oriented values that these organizations promote include the following: • Fitcorp: "Quality" and "customers" • Larry North Fitness: "Happy to do it" and "reaching out and fostering relationships" • Red's: "Hello and goodbye" and "do whatever it takes" • Western Athletic Clubs: "We reach out to others" and "we believe in each other" 2. Embrace the commitment to service values starting at the top. In every business culture, values and traditions are sustained by the organization's leaders who embody those values and traditions. Insightful leaders understand a facility's values are only words unless they model those values in their day-to-day leadership style. At Red's, one of the first people to greet members with a "hello," and one of the last to say "goodbye," is Red himself. Not only does Red greet his members, he also greets his employees. Anyone who spends time with Jim Gerber, CEO of Western Athletic Clubs, will immediately notice that he is fully committed to reaching out to his employees and members. His actions underscore his belief in and support for his "people." Larry North Fitness in Highland Park, Texas, is another facility that reflects the service-oriented value structure of the owner. Larry is always espousing the 'happy to do it" attitude with both his employees and the facility's members through his actions. The late founder and long-time chairman of ClubCorp, Robert Dedman, made it a practice to write personal notes to ClubCorp employees on a weekly basis. Why? Because he knew if he wanted his team to treat members and guests like kings, he needed to make sure his employees felt like royalty. 3. Establish courses of action that reinforce the appropriate values and service culture. Creating and then sustaining a service culture requires a team of competent, committed employees. By the same token, a culture involves a compelling mix of artifacts, myths, legends, heroes and storytellers. In the business world, to foster a great service culture, a fitness center must have people and stories that embody the facility's values and cultural practices. Examples of various steps that can be undertaken to help establish and/or reinforce a service culture within a facility include the following: • Sharing stories about employees who embody the culture and values. • Creating recognition for employees who embody living the facility's service culture. • Empowering people to act on the culture by eliminating political and positional hurdles. The underlying concept is to allow people to innately deliver the desired culture, rather than having to ask permission to do so. • Avoiding making business decisions that are counter to the club's service culture. One counter-productive decision can do more to harm an organization's culture than 10 well-aligned decisions. • Educating continuously. The core of a fitness center's educational and orientation programs should be grounded in teaching and acting out the values and service culture practices. A service-oriented culture requires continual reinforcement, given the fact that even the best employees will occasionally fall out of line if the facility doesn't have the right process in place to teach the service culture. • Documenting the culture. Facility management should identify specific ways to communicate service values and cultural practices. Whether it's through wallet cards, such as those used at Red's, or the posters and handbooks used at Larry North Fitness, a facility needs to keep its service culture visible. 4. Encourage communication. A properly focused service culture involves an open-door policy by management. Management must be willing to listen to and respond to feedback from its employees and members. Management should foster a trusting environment that encourages and allows for open and honest feedback to be shared with management, employees and affected members. It is also essential that management take appropriate actions concerning such feedback. Among the examples of how management can facilitate the process of soliciting feedback include the following: • Walk the floor and leave the office door open. Management needs to spend time interacting with employees and members. • Conduct focus groups. On a quarterly basis, focus groups should be arranged for employee and member groups. This time should be used to initiate and encourage dialogue that involves qualitative discussions revolving around either the employees' or the members' experiences. • Use a real-time member feedback system. A system should be provided, such as comment cards, that enables employees and members to share their feelings about an experience when it happens. Furthermore, management should provide real-time follow-through, so that everyone knows the feedback was received and an appropriate action was taken. 5. Eliminate the sacrifices. If a facility truly wants to have a great service culture, it constantly needs to ask itself, "What sacrifices do its employees have to make to work for the facility?" and "What sacrifices do the members have to make to experience the fitness center?" In this context, "sacrifice" refers to the practices and policies that a club enacts that causes its employees and/or members extra time, less convenience, less comfort, etc. A service-oriented facility has everyone looking for ways to reduce the inherent sacrifices, rather than finding ways to increase the level of sacrifices. If something takes extra time, if it requires an extra step, if it requires seeing one more person, then it is creating sacrifices. All factors considered, the more a fitness center eliminates such sacrifices, the stronger its service culture will be. 6. Create a service recovery process to patch the leaks. Mistakes happen even in the best service culture, and people have less-than-desirable experiences. According to information shared by Dr. Leonard Schlesinger in an article he wrote for Harvard Business Review entitled The Service Profit Chain, customers who have a bad experience can be turned around and even converted into business apostles with the proper service-recovery process. Data exists that indicates that 95 percent of customers will make a repeat purchase if their "poor" experience is dealt with promptly and correctly. The underlying keys of a great service-recovery process include the following: • Listen. A fitness center should have a process in place that ensures that its employees and members are listened to whenever they have an unfavorable experience. • Empathize. When management listens, they should not take a position other than one that considers the feedback from the employee's or member's perspective. Empathy requires that preconceived notions do not interrupt or otherwise cloud the listening process. • Apologize. It is imperative that whoever is doing the listening also apologizes, both personally and on behalf of the club, if appropriate. • Respond. Management should be proactive once the first three steps are taken. As a general rule, not only will the initial management action be to correct the issue, but also to let the person who had the unfavorable experience know that the issue will be addressed as soon as possible. • Communicate the response. Management, regardless of whatever action they ultimately decide to take, should personally inform the individual who brought the issue to their attention about what steps they decided to take. • Follow up. Following a response, appropriate feedback should be provided to everyone involved.
More than worth the effort
Creating a service culture that fosters memorable and lasting member experiences is one of the greatest, yet rewarding, challenges to operating a successful fitness center. At a minimum, the process of creating a service culture takes passion, commitment, patience and vision. Fortunately, the energy and resources required to establish and sustain a service culture in fitness centers will be worth the effort for everyone involved.