What the Best Clubs do to Retain Members?

For more than 20 years, I have been intensely studying health club operators and member behaviour in order to understand what can be done to increase member retention and reduce attrition.

This required me to look internally at our industry for examples of best practice as well as externally at some of the world’s most affective customer experience strategies developed by organisations as larger as, Apple, Amazon, and McLaren Cars and as small as my local coffee shop.

My observation and investigation into the thoughts and process that developed these customer experiences reveals common patterns that can be adopted and replicated within the health club business. For this article I want to describe the operating behaviours of health clubs who are able to keep more than 70% for twelve months , and 50% of their members for more than two years.

Regardless of whether you are a small, medium or large organisation you will be able to apply some, if not all, within your business today, to begin growing tomorrow.

In a market where we are increasingly seeing duplications of products and service it is important that health club operators find ways to deliver the service and experience that the member expects. At one end of the spectrum budget operators were able to separate themselves form the traditional clubs on price. This however is becoming increasing difficult when there are three, four or more in close proximity. Even they are now looking to offer something that their competitors are not and differentiate themselves.

Space Shanghai taken by Paul Bedford

Experience by design

The first is the owners of the business want to be known for the quality of the experience they provide as well as making money.

Flying below the radar are the boutique and niche business. These have been growing steadily in number for the past few years. What distinguishes them from the majority of operators is passion to deliver a quality product and service each and every time.

The best operators all believe their business begins and ends with their member experience. By delivering a memorable service experience they put their members first. As of late, member experience has been a hot topic for businesses of all sizes, leading most to scramble to develop their member experience strategies and programs. The operators that in-bed the philosophy reap huge rewards and it becomes more than this quarters new project.

These operators have something about them that separate them from their competition, and the common thing is that they have mapped out the way in which the member is going to engage with the business. Not just the process, but the experience. Yes an on-line booking page needs to be functional but, what does it look like. It’s as much about how the member feels as what they do.

These operators that have created their businesses with the members experience in mind  and they have been reaping the financial benefits for years. You can’t fake a member centric culture. This type of culture needs to be genuine.

Retention is planned for

Operator’s simple can't just focus on upping the member experience at certain times of the year. Each quarter you must have a strategic plan of what you are going to deliver and how that fit with your bigger member retention strategy.

The best time to test and measure the quality of service delivery is when the clubs are at their busiest, Monday nights towards the end of January. This is when you really get to see what’s going on. Test and evaluate under the toughest conditions.

Results will be in months not weeks.

One reason why the health club business is so sales focused and less retention focused is because of the gap between action and results. Run a new sales campaign and you can check daily to see the results. Add an extra month or two to a membership and it could take six, nine or twelve months to see an impact. Health club operators are not used to operating in these time frames. Not great if you board or manager wants to know the return on investment at the next quarterly meeting.

Space Shanghai taken by Paul Bedford

Train the process

Coming up with a process and feeling map for your member experience is one thing. Delivering it is another. Cascading the experience you want needs training. Every member of staff needs to know what part they play in delivering the member experience. Having a general set of guidelines, bullet points and KPI’s that tell staff what is expected is one thing, teaching them  how it is to be delivered is another.

Your frontline staff are brand advocates or brand terrorists. How we invest in them will determine whether your business flourishes to its potential or progresses slower than we anticipate. Because as a leader your team understands that an investment in your people is an investment in growth.

Unfortunately many operators see staff as a cost and equipment as an investment. Its interesting to see how little equipment you see in the boutique and niche clubs and how much emphasis is placed on having the right staff.

It’s simple: happy staff produce happy members. The happiest staff are ones that have had proper training before being handed their responsibilities, and they are recognised as individuals, not solely as a member of a department.

I was recently invited to speak to some of the largest heath club chains in the US. I asked them what was the major source of their income and unexpectedly they said member dues. I then asked what was the second largest source of income, the response personal training. I then investigated how many staff they had focused on personal training, the numbers were staggering. When I returned to the topic of member retention the room fell silent. It appears that business have either decided that member retention isn’t worth the effort or don’t know where to start. Yet the income generated form additional length of stay far exceeds that of additional spend. You also cant sell anything to member that have left.

Meeting focus

In those business where member retention is high, retention is mentioned in every meeting. Its up their with sales targets and completions. It has a process measures and actions for the staff to follow. Median length of stay is measured and discussed. Development projects include the impact on member retention and the income forecast as a result of the added length of stay. New member promotions are designed around attracting the most profitable members, not just the easiest to sell to.

Delivery of the experience

What separates those clubs that have high member retention and the also ran’s is the way in which they deliver their member experience. They take the member experience and brand it. Every staff member can describe the member journey, what is going to happen when they first join, how that evolves and what they can expect long term. They take the process, create a product and then deliver it as an experience.

The employ the right people.

When employing staff clubs look for the characteristics that help deliver the member experience and re-enforce the brands values, rather than another body or even on technical qualifications. 

I’d take a passionate, high energy, personality filled candidate over a highly skilled applicant any day of the week.

When it comes to member service, you can’t train someone to care, and caring is key to delivering amazing service. You can’t expect to pay minimum wage and have that member of staff treat the business as if it were their own. Recruiting the right person is important because something that is often overlooked in business is the cost that goes into hiring and firing. That’s the cost if your using recruitment agencies, advertising and managers time spent interviewing.

They retain their staff

Clubs with the highest member retention appear to have loyal member focused staff that have been with the business for more than 18 months and commonly years. Having longer tenure also creates an environment where delivering service becomes the norm and anyone entering that environment adopts that as the behaviour to be delivered.

There you have it not as overly complicated as you may have imagined. With   a return on investment that is very apparent and appealing to owners and investors. I love working with operators that want to develop and improve member retention. Particularly where it requires very little investment and it is actionable. The health club business can’t grow without sales, but wont survive without repeat business.