For 20 years we've been telling people and writing about how there are two kinds of gyms — those that are "sales" focused and those that are "retention" focused. We put ourselves squarely in the second camp since we've never had salespeople, we use no high-pressure sales techniques and our entire business model is based on the premise that we need our members to actually use our clubs and thus continue their memberships.
So, guess what we've figured out after all of these years? We've been wrong. Members who need or want to cancel are going to do so when the time is right for them, and there's almost nothing we can do about that.
We know that you're not allowed to say that in 2015. We're supposed to do everything we can to retain our members, and the much-discussed statistic that "it costs five times as much to get a new member than to keep an existing one" has been so engrained in the psychology of our industry that we know we are speaking heresy.
Let us explain.
We have always had a problem with the idea that "retention programs" at health clubs are discreet activities. We would argue that everything you do and every dollar you spend on your staff, facilities and programming constitutes your retention program. Consider:
✅ Is your club clean?
✅ Are people greeted properly?
✅ Are members well-integrated into your facility with training programs, group fitness classes, seminars and other offerings?
✅ Do your childcare providers make things fun for the kids?
✅ Do you build community among your members with social media, special events and contests?
✅ Do you communicate regularly with your members and reach out to those who have gone missing?
We could go on and on, and we would argue that running your business in such a way that people want to come in, want to work out, want to see their friends and your staff, and want to get results is what constitutes your "retention program." No discreet program can be a substitute for having the kind of facility that makes people want to visit regularly.
So, what has changed for us? It's really our mindset. Most people cancel for reasons that are beyond our control — relocation, financial reasons, work conflicts. And while reasons such as "no time" might be shorthand for "I don't want to be a member anymore," it's clear to us that once someone has crossed that threshold, we are not going to bring them back.
You could argue that the important point is to stop them from ever reaching that threshold, and we try to do that every day. To be sure, we're going to keep doing the kinds of things that we believe will get new members integrated, and all members excited about coming in regularly, working out and getting results. We'll keep doing all of the things that demonstrate value and hopefully make our gyms a long-lasting part of our members' lives. But while "long-lasting" is a worthy and reasonable goal, we have to accept the fact that eventually members are going to cancel, either because they must (relocation) or because of other life factors that will compel them to do so (work conflicts, finances, or they just don't want to go to the gym).
That's why we're shifting our focus. If we continue to think, "We need to stop people from cancelling," then our history would indicate, "Why bother? They're going to quit anyway!" Our point isn't to give up. It's to focus on something we think we can more directly impact and to some degree control, while at the same time leveraging those healthy relationships that we have with existing members. Our efforts toward retention are going to be shifted toward sales.
Please don't think we've ever ignored sales. We've always trained our staff regarding how to take phone calls, conduct tours and ask for memberships. We have scripts for them to learn and follow for almost every scenario we can imagine. We have occasional sales contests, and we offer lots of membership specials. Our shift is that we are going to do more training, watch more closely, and offer more incentives and excitement to prospects, members and staff.
If we had a high-powered sales team, we'd be thinking of ways to turn them loose on our community — but we don't. So we need to turn our members loose as our ambassadors. We've always offered referral prizes and had "bring a friend" events, and many have been quite successful. But most of our events have been around keeping members happy and engaged, and if a few referrals came from those events then that was a bonus. With our new thinking, the purpose of events will be to acquire new members.
That won't be a big shift, but it may, say, impact how many guest slots we reserve in a big group fitness class when we do a special event. Whereas we'd previously never want to turn away a member if we were doing a special class, we might have to if we are trying to maximize new member sales.
Certainly, the shift we are describing is subtle. After all, if we don't do all of the things we've always done to try to keep our members happy and engaged, why would they refer anyone? If we don't get new members to be successful in their first 90 days, why would they excitedly bring a friend with them? If our members don't believe we offer great value, why would they encourage a colleague or family member to come in with them? The only way for us to be "sales focused" is to have lots of happy members — "raving fans" as they are often called these days — who hopefully stay with us for as long as we can possibly keep them.
So, you want friendly? There's nobody nicer than our staff, and you'll want your friends to know about it. You want excitement? We'll offer free bootcamps for a month — and bring as many guests as you'd like! You want to trust your gym? We'll have the simplest membership pricing with no hidden fees, an easy cancellation policy and a flexible freeze policy. You need babysitting service? Your kids will drag you in because they enjoy it so much.
The real difference will be this: When a member who has sent us 10 referrals suddenly cancels, we're not going to stress about it anymore. Everyone eventually cancels. That's just the way it is. We've been wrong for 20 years thinking we can significantly impact that reality. The trick is to have a gym full of happy members, regardless of how long they are with us.
This article originally appeared in the October 2015 issue of Athletic Business with the title "Round-the-Clock Retention"