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Loyalty Programs Are Popular, But Do They Really Work?

Loyalty Programs Are Popular, But Do They Really Work?

Maria Parrella-Turco is senior partner at consulting firm New Paradigm Partners. She has worked in the fitness industry since 1993 and has been consulting since 2000. During that time, she has assisted more than 65 centers in conception, business plan development, finance, facility development, management and staff training. She and New Paradigm also own and operate a highly profitable and successful 20,000-plus-square-foot consulting model health club that is used as a testing and university center for the firm. Parrella-Turco also is a facilitator and a lead trainer for the NPP University and Franklin Coveys 7 Habits of Highly Effective Health Club Managers. She can be reached at

More than 85 percent of the American population is involved in one or more loyalty programs, which means that loyalty programs are now a price of doing business.

Given the popularity of loyalty programs, they can be surprisingly ineffective. That’s right, ineffective. A loyalty program, like any program, is only as good as its ability to engage and drive behavior.

To stand the best chance of success in tough market conditions, programs must enhance the overall value of the club or service and motivate members to make their next purchase, participate in an event or activity, or inspire a friend to enroll. Good loyalty programs also should motivate members to stay members.

Here are eight steps for implementing a good loyalty program in your facility:

1. Put a program in place. Most clubs do not have a have a program in place. Start by making a list of behaviors you want to drive in your club. Next, determine what will motivate members to participate in those behaviors. What will the rewards be?

2. Stick with it. Give a program at least six to 12 months before evaluating the overall impact. Consistency is a key factor in getting the word out and building momentum.

3. Dangle the carrot. Although a direct reward is great, leave room for something more to be attained. Point programs work well in accomplishing this. Members will look for ways to earn more.

4. Create a scoreboard. What is it that you would like to affect? If you want more referrals, then find out how many referrals you are getting now. How many do you want to attain this month and going forward each month thereafter?

5. Keep score. Most clubs forget to keep score. Once the metrics have been set, it’s important to keep score.

6. Involve the staff. Usually a club’s most successful program is the one that the staff participates in. Make sure that your staff can also participate in the program.

7. Market. The loyalty program must be layered into multiple marketing messages. All member communication should drive members back to your loyalty program. If you do not layer your loyalty program into most of your member marketing, it won’t stick.

8. Recognize. Most clubs do not reward and recognize their top spenders and good users of events and programs. By visually and verbally recognizing members who are top users of your loyalty program, you will ultimately create more users.

Getting the penny out of our eyes to see the dollar is usually the more challenging part. A good program costs only a few hundred dollars a month. If you’re following the pointers above, you will succeed in developing a successful program for your club. Successful loyalty programs provide a return on investment.

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