In the world of fitness, the focus often lies on the numbers that are easy to track - gross income, profit margins, and new memberships.
These are undoubtedly important, but some of the missing and crucial pieces of the puzzle that have helped me and other businesses that I have worked with are costing lost members or member attrition. For myself and my clients, this has been a consistently significant factor that impacts our bottom line. Yet it often went unnoticed. According to a report by the International Health, Racquet & Sports-club Association (IHRSA), the average gym loses about 50% of its members every year. That's a staggering number, and it made me think ? Let's say a gym spends £75 on marketing to acquire a new member and that member cancels after one year. The gym then has to spend another £75 to replace them. If the gym could have spent £15 on retention efforts to keep that member for another year, the cost of churn, in this case, would be £60 (£75 for a new member minus £15 to retain the existing member). So, in this example, the gym could have saved £60 per member by focusing on retention efforts rather than acquiring new members. Over hundreds or thousands of members, these savings can add up to a significant amount. Bob Esquerre, working with Faster Health and Fitness, a renowned fitness industry consultant, has often emphasised the importance of member retention. In a recent conversation with Bob he states, "The cost of acquiring a new member is three times more than retaining an existing one." This underscores the financial implications of member attrition and the potential for increased profitability through improved retention. However, let's consider the other side of the coin. Some argue that member attrition is simply a part of the business model for many gyms. They point out that the high turnover allows for a constant influx of new members, often at higher rates than those grandfathered into older, cheaper plans. This perspective suggests that the focus should remain on marketing and sales to continually attract new customers. While this approach may work for some, it's worth considering the potential long-term benefits of investing more in member retention. This could involve investing in staff training to improve customer service, enhancing the gym experience, or offering more personalised fitness programs. According to HRSA’s 2012 edition of Profiles of Success shows that clubs spent a median of $103.50 in sales and marketing costs per new member account in 2011. Although the cost to acquire a new member has never been cheaper, a newly acquired member may not necessarily replace the revenue lost from a member that quits. From a study by the Harvard Business Review found that increasing customer retention rates by 5% increases profits by 25% to 95%. Applying this to the fitness industry, it would seem that even a small improvement in member retention can significantly boost a gym's profitability. More importantly, satisfied members are more likely to refer friends and family, providing a source of new customers that don't require a hefty marketing budget. According to Nielsen, people are four times more likely to buy when referred by a friend. While the traditional metrics of gross income and profit are important, gym businesses may not want to overlook the cost of member attrition. By investing more in staff, experience, and member retention, gyms can potentially increase their repeat business and ultimately, their revenue. Growing any business requires good decisions, however, you measure them. Each gym must consider its unique circumstances and decide where to allocate resources for the greatest return on investment. However, the evidence suggests that focusing on member retention, and the team that delivers customer experience could be a game-changer for many in the fitness industry. Let me know your thoughts in the comments below.
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I want to share with you a simple way to differentiate between opinion and fact in the fitness industry
First I would like to define opinion and fact An opinion is …
A fact is …
It makes me angry to think that personal trainers are exposed to opinions delivered as facts by people that use their position, experience and number of clients to justify their opinion. When I was searching for a solution for my own plantar fasciitis injury, I struggled to differentiate between opinion and fact. I relied on the information I could find from big name gurus in the industry. What I didn’t realise was that these people would often “call to authority” to justify their opinion. To make it more convincing, many of them were saying the same thing, or things that seemed to make sense. “Call to authority” means relying on your own or your guru’s experience, qualifications or status to justify an opinion. Once I became aware of this, I began to notice it everywhere. I’ll go into the specifics on the research I found on plantar fasciitis in another blog. Needless to say, when I stopped following opinions and started following the research, I had a break through with my recovery. I also had a new process that was not emotionally attached to techniques that I now follow with my clients. How the industry makes opinion sound like fact. A simple way to make an opinion sound like fact is to deliver the opinion with a minimum of two facts to support it. Alternatively, begin with the facts and conclude with the opinion. Both are still opinions. You will be surprised how hard it is to find facts without opinion. Here are some examples… FACT: Fascia is a form of connective tissue that wraps and bundles muscle (MYO) together. OPINION: Myofascial adhesions can develop through stress, training, overuse, underuse, movements imbalances and injuries. OPINION: They are essentially points of constant tensioning and addressing them can have a positive effect your workouts. OPINION: Ignoring them can lead to further dysfunction and may perpetuate and/or cause injury. How to rate a fact. In order to rate a fact we look at its relevance and its quality. Here is a list of the things I check to ensure its quality.
Summary In order to check a statement is fact, then look to highlight the opinion and the facts supporting the opinion. Then see if that is a fair reflection of what they meant. Remember an opinion backed by facts is still an opinion.To truly find the answer to the question then it is better that you use your own skills to find research and facts to come to a conclusion, rather than rely on experts and gurus. Hopefully this has given you the tools you need to differentiate between opinion and fact. |