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Knowing Your Club’s Key Performance Indicators Will Help You Improve Retention

Knowing Your Club’s Key Performance Indicators Will Help You Improve Retention

Fewer than half of all people who make New Year’s resolutions maintain them for more than six months, research shows. Twenty-five percent of people break resolutions after one week, 30 percent give up after two weeks and about 65 percent quit after only one month. Fortunately for the health club industry, our overall attrition rate is not that dismal.

Generally speaking, fitness-only chain clubs tend to have the lowest retention rates, according to the International Health, Racquet and Sportsclub Association’s “2010 Profiles of Success,” released late last year. Clubs with members who use multiple services and amenities typically have higher retention rates. Overall, a 70 percent to 75 percent retention rate on an annualized basis is good.

To get a clear picture of your organization’s health, you should track your club’s key performance indicators. Although most club owners track sales performance, many do not collect enough data related to retention rates. Some of the “must have” monthly statistics include member usage, the average length of membership at your club and monthly cancellations.

Usage, not cost, is the primary driver of a member’s perceived value of membership. Members who use your club at least two to three times per week are more likely to continue their memberships than those who come less frequently.

Monitoring usage patterns gives you insight into how engaged your members are at your facility. Any decline in attendance is a potential warning sign. If over a two-month period you see a drop of 50 percent or more in a member’s typical attendance, that member is at higher risk of quitting your club, according to research by Richard Blacklock for Sport & Health.

Engaging members in the early stages of membership is critical for improved retention. What systems do you have in place to ensure that new members get the attention and feedback they need to be successful at your club? Thank-you notes, orientation sessions and follow-up phone calls are a good start, but to successfully integrate new members into your club community, consider tailoring your introductory offerings to their specific interests and needs. Even more importantly, help new members build their social networks in your club. Connect them with team members and introduce them to other members. Rather than a standard one-hour introductory training session, for instance, consider offering weekly small group training sessions for the first six weeks of membership.

Calculate the average length of membership at your club on a monthly basis. As the months go by, if the numbers trend up, you are likely meeting or exceeding your members’ expectations. If your numbers trend down, you have a problem. With enough historical data, you also will learn which stages of membership are most vulnerable at your club.

One study by the Fitness Industry Association, an organization for UK clubs, showed that new members who come to the club at least once per week during the first 30 days of membership stay on average three months longer than those who come less often. Even small improvements in retention can have a profound impact on company revenues, so set goals to incrementally increase the average length of membership at your club.

The more detailed your cancellation report is, the better. At a minimum, you want to know how many members are leaving and why. In order to gauge how well you are meeting the needs of various populations, look for any patterns in membership and market segment.

Some of the reasons members leave clubs are beyond our control. Home move rates, for example, vary widely in communities across the country.

There is little club owners can do when members are facing injury, illness, divorce or bankruptcy, other than offer flexibility as circumstances warrant to help prevent an outright cancellation.

However, members leaving for reasons such as the quality of programming and facilities or the level of service they receive indicates a failure in the club’s relationship with its members and a missed opportunity to curb the controllable attrition rate. Owners can take steps to correct the factors that are contributing to loss of members, but only if they are aware of them in the first place.


Phil Wendel is founder of ACAC Fitness and Wellness Centers, Charlottesville, VA. The four facilities have an annualized attrition of 25 percent. Christine Thalwitz, ACAC’s director of communications, contributed to this column.

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