Membership Retention Strategies: Plan "B" for 2010

Bob and Jolyn Esquerre are business solutions consultants and co-owners of the Esquerre Fitness Group [EFG]. The company, which trains trainers, group exercise instructors and training managers, has consistently pushed the envelope of excellence in challenging our industry to provide exceptional service to our members. Recognized as subject matter experts in personal training, program development, club branding, management development, customer relationship management and membership retention, the Esquerres’ total focus is to create customized business solutions for their customers. You can reach the Esquerres at [email protected].

Why is it that after about 25 years of trying to fix the membership attrition problems within the fitness industry, we are still experiencing a membership attrition rate of 35 percent to 45 percent?

In the International Health, Racquet and Sportsclub Association’s (IHRSA) “2007 Guide to Membership Retention,” John McCarthy, former executive director of IHRSA, writes, “Membership retention for commercial fitness facilities had always been a subordinate objective to these clubs’ primary objective, which is substantial and sustainable profitability … If a commercial club operation could sustain substantial profitability with attrition rates in the 35 percent to 45 percent range, so be it.”

However, the 2009 recession and a slow recovery compounded by a high unemployment rate are forcing our industry to take a much harder look at what hasn’t worked and what is still not working. The recession prompted a need to create a plan B with never-before-tried options.

We believe the fitness industry needs to undertake a major cultural shift. This shift involves moving from a selling-at-all-costs approach to a more focused, customer-centric model. If executed properly, our plan B would reduce membership attrition rates and increase referrals from happy, satisfied club members.

At the end of the day, the fitness industry must have four interrelated objectives in order to achieve sustainable profits and improve attrition rates:

1. To create a valued-added environment that will attract new members.

2. To consistently provide value-added services and/or programs that create member-specific reasons to stay at the club.

3. To hire employees who have a vested interest in managing the member experience so members get results and have a great time.

4. To quantify, package and market the member-specific results which can be used to increase member referrals from happy, satisfied members.

Our plan B involves the concept of programmed training, which we’ve branded as PT4. In order to understand our concept of programmed training, we must clarify, and in some cases, redefine programming. Traditional programming, also known as programming-in-a-box, consists of non-fee-based and non-branded group exercise classes that have no true beginning and end.

Traditional programming also includes personal training services, which involve only approximately 9 percent of most club members, according to the “2009 IHRSA Personal Training Report.” Plus, most training programs do not support their club’s membership retention programs. Our plan B would increase retention and referrals from satisfied members.

As a membership retention concept, PT4 requires repositioning club programming so that it’s a comprehensive business platform that seamlessly supports the member experience. It also requires a club’s fitness team to deliver and manage member experiences.

Under PT4, member experiences should include the following four integrated programming options:

1. Fitness floor programming.

2. Group exercise programming. (This should be non-fee based.)

3. Personal training programming. (This should be fee-based, one-on-one programming.)

4. Small and large group training programs. (Small groups should include two to eight people, while large groups can include eight to 20 people. Both of these options should be fee-based.)

These four programming options have traditionally been kept distinct and segmented. Our plan B is to create a synergistic relationship among these programming options so that members can seamlessly be managed in each program. The ultimate job for the fitness team members, therefore, is to seamlessly move members through each of the club’s four programming centers so they can achieve their individual goals.

These service options traditionally have been mutually exclusive and delivered by two segmented work groups. These work groups tend to represent their own interests instead of the interests of members or of the club.

In the best of times, both group ex and personal training potentially can be successful. Of course, the best of times have been replaced by a slower economic recovery characterized by more cautious, educated consumers looking for and demanding more value.

The question now is how do we bridge the operational and organizational gaps that can make plan B occur? The answer is to create a business platform based on customer service that is carried out by fitness professionals who have incentives to manage the member experience as a core objective of the club’s value proposition, aka the club’s brand.

After the club’s brand has been redefined and the new value propositions have been embedded into employee job descriptions, the following steps should be taken and managed:

Step 1: Successfully integrate members into programming options in which they have an initial interest, as opposed to just trying to sell them personal training.

Step 2: Integrate members into a second programming option that is a natural extension of their initial program.

Step 3: Create and manage a bridge to move members into a comprehensive programming plan that includes all the options that will help them reach their goals.

Adopting our plan B can stimulate the creation, delivery and maintenance of value-added, member-specific programming options (such as PT4). It also would create managed member training outcomes that validate the club’s value propositions. This would, in turn, control, stabilize and eventually reduce the membership attrition rate. If these results take place, membership referrals from happy, satisfied club members will increase.

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