There is nothing that ruins our collective mood quicker than a flood of cancellation requests. And man, have we been in a bad mood lately.
Because we take the vast majority of our cancellation requests via our website, we receive them in our email inboxes in real time. It's bad enough when a family of five submits their requests overnight and we wake up to that in our email. At least as the morning fog lifts and the caffeine hits the blood, we realize it was all one family. It's much worse when our inboxes are full of requests that are unrelated. All of those people wanted to cancel at the same time? How is that possible?
Certainly, we see spikes of cancellation requests from time to time, but the last eight weeks have been abnormal. So, as we often do when we're perplexed about what the heck is going on with our business, we dug into our data and hoped it would shed some light.
Forty percent of our recent cancellations have been the result of relocations. The percentage is actually in line with our history, but the sheer number is much higher than normal. This could be a reflection of our local economy. Our area is still plagued by unemployment at over 10 percent, which is higher than our state and national averages. If local residents are finding opportunities elsewhere but a corresponding number of new workers are not coming into our area, this will hurt in the long term. So far, our new membership sales are holding up OK, but the trend is a concern.
• Ten percent of our cancellations were for medical issues, either something that the member is dealing with or something a family member is dealing with. Surprisingly, the vast majority of these cancellations were due to the latter, and these members quit in order to care for their loved ones. There isn't much we can do about these cancellations.
• Six percent were for financial reasons, either their finances ("I lost my job and can't afford anything") or our cost ("too expensive to continue"). We actually thought this percentage would be higher, considering our concerns about our local economy, but it seems that we don't need to worry about our prices.
• Fourteen percent provided no reason. In most cases, these people provided instructions - "My year is up, do not renew me." They could likely be combined with the next group...??Thirty percent who we categorized as "Other." The consistent thing was that these folks cited time-related or value-related issues. Our facilities were too inconvenient, a new local job was taking them too far away each day, they had purchased home equipment so they didn't need to come to us anymore, work had gotten too busy - or they cited the dreaded and generic "non-use."
What are we taking away from this analysis? In terms of the percentages, there was nothing shocking when compared to our looks at previous data. Medical was a bit high, and financial was a bit low, but nothing crazy. And there's nothing we can do about relocations.
So, then, what of the spike in the raw numbers in the last two categories, which is where we can have the most impact?
Last October, we started seeing nice membership growth, so some increase in cancellations 12 months later is to be expected, but not at this rate. It's likely that we have let members slip through the cracks, despite our best efforts to run an organized and efficient retention program. We try to focus on our missing members and our less engaged members, but somewhere in those last groups of cancellations, we have surely let slip away a few who might still be members today.
So, it seems we have to get back to our basic blocking and tackling. Of the last two groups, how long did they go from last visit to cancelation? Were they getting our regular email communications and aware of activities at our clubs? Did they take advantage of our services when they were new members?
Once we know more about the members who have canceled, we need to dive into where we are with members who fit the same profile and could be at risk. It's tedious, time consuming and challenging, but our only other choice is to stop reading our email.
