Clearly, retention should be both preemptive and, when our preemptive measures have not worked, reactive. My experience shows that most clubs do not have enough clarity with either approach.
To better assess your clarity, I suggest looking at the following preemptive and reactive measures:
1. Do you have clear “save” goals for cancellations? Save goals are not the same as cancellation goals. The difference is that every month you know you will have a certain number of members cancel, but do you also have a projected number of those who you will save?
2. Have you calculated how much you will lose or gain each month by losing or saving members who want to cancel?
3. Do you have a new member integration program that highly integrates members into the club during their first 30 days with an incentive to complete the program?
4. Do you have a new member integration survey that allows members to tell you their preferred method of communication?
5. Do you contact members who have not used the club in the past 30 days? This is critical. We are not talking about 60, 90 or 120 days, but the past 30 days.
6. Do you have a retention manager who manages the above points?
If you do not have a person who is responsible for managing elements one through five, you probably are losing money unnecessarily. I'd suggest that you hire a retention manager who reports to the club manager.
The primary purpose for this position would be to create and deepen relationships with current and future members that will add value to their membership and enhance their sense of belonging to the club community.
The secondary purpose of the position would be to manage the member retention function at the club through preemptive and reactive solutions with the intention of adding a minimum of $500,000 to the club's annual bottom line.
The retention manager's job duties would include the following:
1. Coordinate and track the new member integration program.
2. Manage and track all program elements and staff.
3. Make the monthly non-usage calls to members who have not been in the club for the past 30 days to ensure that they come in the club within the next 30 days.
4. Handle all initial cancellation conversations with the goal of member recovery, not cancellation.
5. Enroll non-usage cancellation prospects in a 30-Day Make It Fit Program.
6. Enroll qualified members into a monthly member assistance program.
7. Manage and track all program participants using weekly and monthly communications with the intention of recovery, not cancellation.
8. Manage and implement a 90-day alumni member promotion each month to bring back a minimum of five members to the club.
9. Collaborate with other departments to host monthly social functions.
10. Calculate, analyze and report to the manager on a monthly basis all saved and lost revenue caused by cancellations.
So how do you evaluate whether a retention manager is a valuable position for you? You need to look at the compensation of that employee versus the percentage of revenue that that employee could provide your club.
You'll need to figure out the following: monthly salary, the percent of revenue that a retention manager could save you by keeping members, the commission on a 90-day member promotion, insurance coverage cost for the retention manager, how much you're willing to spend to educate the retention manager, and the amount of vacation and personal time you'll provide to him or her.
You might think that you can't afford to add any new positions or payroll to your budget, but I encourage you to take a look at the potential revenue that could be added or kept with this position versus what you lose now by not having this position. Most clubs have far too much cash flying out the doors because of incomplete retention efforts. Take a look at how some of these suggestions can put more cash into your business.
Karen Woodard-Chavez is president of Premium Performance Training in Boulder, CO, and Ixtapa, Mexico. She has owned and operated clubs since 1985 and now consults with and trains club staff members throughout the world.