Minimize Health Club Memberships Cancellations And Grow the Bottom Line


Over the last three financial quarters, cancellations at clubs have increased. Unfortunately, many club owners are not doing anything about it, but it's time for a change, and here's how.

Observation: When staff is at work, most of them are focused on their jobs rather than on how their jobs keep members.

To do: Revise job descriptions to include the following phrase as the primary purpose of the job: “To create and deepen relationships with members that will add value to their membership and enhance their sense of belonging and community within the club.” By making this their primary purpose and making their job task their secondary purpose, you help them focus on creating a connection that will keep members.

Observation: Calculating retention, the cost of a lost member, the cost to get a new member and the time it takes to recoup the initial cost of a member is done inconsistently, if at all. These need to be calculated and shared with all staff so they have a retention awareness.

To do: Analytically measure outcomes monthly and manage retention behaviors daily so you can improve these numbers.

Observation: Most clubs have a member cancellation policy rather than a member recovery program. The front desk staff handles the cancellations at most clubs, but they are too busy multi-tasking to have the kind of conversation that can save a member. Instead, the desk person should immediately contact the club manager to handle the situation, giving the manager the member's name and location in the lobby.

Before speaking with the member, the manager should access his or her file to see when the member joined, check club usage and see how much the member is paying. The manager should then greet the member and say in a genuine, concerned tone, “I understand you would like to discuss cancelling your membership. I am sorry to hear that. We don't want to lose you. Let's go into my office and discuss the options.”

The manager should then ask the following questions in a concerned, non-defensive manner: Why do you want to leave? Why did you join the club? Did you get what you expected from your membership? What could we do differently that would make you want to stay? If we were able to do something specifically for you, would you reconsider cancelling?

After the first question is answered, the manager will know what direction to take the conversation. If the member is moving to another state, then this member more than likely cannot be saved. However, if the member responds with, “I have not been using the club,” then the manager should proceed with the rest of the questions and be prepared to offer substantial services or accommodations. Knowing how much a lost member costs will help you define what your manager can afford to offer.

To do: Turn your cancellation process into a recovery process, and revamp your cancellation projections to set a goal to save a minimum of five members per month who are cancelling. E-mail me to get a form that shows how much revenue a net 60 members adds to your bottom line.

Observation: Retention awareness has to be translated into behaviors that create a definable difference and a compelling competitive advantage.

To do: Create an in-house service skills program that gives new and veteran staff the tools to provide consistently gracious, seamless service.

This is a perfect time to examine both your strategic and reactive approaches to retention and make the necessary changes that allow you to affect the number of members who leave your club in 2009.

Karen Woodard-Chavez is president of Premium Performance Training, Boulder, CO, and Ixtapa, Mexico. Woodard consults and trains clubs throughout the world. She can be reached at 303-417-0653 or at [email protected].

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