If you’ve been following along with this particular blog series, you’ll know that we’ve now arrived at the third of the challenges laid out in our initial post: ‘How Do I Make More Money with My Fitness Studio?’
If you haven’t read the first few posts, click the link to jump back to the start.
In this post, we take a look at one of the single biggest challenges fitness studio owners face when attempting to increase revenue: Not retaining members year after year.
How to Measure Member Retention Rate
More than almost any other industry, customer turnover is a fact of life in the fitness world. You will never keep 100% of your customers coming back each month, but that doesn’t mean you should throw in the towel. There are things you can do to improve your member retention rate – and the first step is knowing how to keep track of it.
One way that many people calculate their retention is by tracking their overall membership count. But if you had 300 members last month and 300 members this month – does that mean your retention rate is 100%? Probably not. It is more likely that you lost some members and found some new ones to replace them. Did you lose 20 members and pick up 20 new ones? Or did you only lose 5? The answer would make a big difference in your growth strategy moving forward.
In order to properly calculate your retention rate, you will need to rely on your studio management software. Go back a few months (or even a year) and find all the new customers who signed up in that period. Then figure out how many of those customers are still with you. Divide the current members by the original membership count and you will get your retention rate.
You can track this number month-by-month, quarter-by-quarter or year-by-year. But once you know it, you can start trying things to improve it. Because there probably isn’t enough money in your marketing budget to grow your business if you are only retaining 10% of your members each year.
How to Improve Member Retention
If your retention rate is low, it means you aren’t delivering on the promise you made to your members when you signed them up. You should do your best to understand why a client has decided to leave and an exit questionnaire is always a good idea when it comes to capturing this important information. But you can also take some steps to encourage your clients to remain loyal before it gets to the breaking point.
These can include:
● Monitoring Attendance – The best time to solve a problem is before it happens. Use your studio management software to target members who aren’t showing up as much anymore.
Perhaps there’s a problem with the way the class is being run? Or maybe these members need an extra incentive to pull on their yoga pants after work? Whatever the issue, reach out to them and figure it out before they send you that cancellation notice.
● Creating a Community – People will come to your studio more often and stay longer if they like the people they are working out with. Host social events such as wine or beer tasting, holiday parties, or couples nights to help create a sense of community among your members.
For group fitness classes, take a few minutes during each class to make sure everyone knows each other. For smaller groups, that could mean introducing first time visitors to all the regulars. For larger groups, find a way for newer members to feel a part of the team.
● Getting Creative with Membership Options – Most studio owners love selling unlimited monthly memberships – but those don’t always work for customers. Instead of losing those members who like to jump from one fitness craze to the next, find a membership option that appeals to them. Create a “limited” package at a lower price point that allows them to be a member of more than one studio. Or consider partnering with another local business that offers different types of fitness classes and offer a joint membership.
In Summary
Member acquisition? Check. Member conversion? Check. Member retention? Check.
That’s it – the three biggest challenges you’ll face as a fitness studio owner – and how to tackle them. And once you know them, you’ll be in a far healthier position to increase your revenue and boost your profit.
Need some help getting started? Our friendly team of experts can point you in the right direction when it comes to monitoring these essential numbers.
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