Feel the Burn, Lose the Churn!
What is Churn?
A feared term in any industry– Churn. It happens, but let’s strategize. Let’s keep your clients coming back for more. Make them feel the burn & you will lose the churn. Churn refers to the number of customers a business loses over a given period of time. Members signing up, members going, members not returning, members leaving. Sound familiar? Is this something you’re now preoccupied with? This is an all too familiar tale for the life and business within the fitness industry.
Churn and retention. The issue has been around for as long as people have paid for services. A report in 2017 found that facilities lose approximately 50% of members each year. The majority of these leave within the first 6 months and unfortunately, it is difficult to avoid. Similarly, the same report also found that it can cost you 8 times as much to target new clients as it does to retain.
Though we must not despair, give up, or succumb. With a few small steps of the 3 Cs; Community, Consistency, and Constraints - churn and retention will be a worry off your mind.
To achieve this, we need to understand why clients churn, why clients retain, and what you can do to ensure you spend more time doing the work you love.
How the 3 C's Can Help You Reduce Churn
In the most simplistic definition; churn is the measure of how many customers stop using a service over a period of time. The reasons are multi-faceted, and we all have our own thoughts on why this occurs. We look at our prices, classes that we offer, and even our own equipment… But you can stop looking there as these are more often not the deciding factors of churn. Surprisingly, price is generally not considered an issue for clients. While low prices may lead to high uptake, it does not seem to correlate to high retention rates. Regardless of the price, they are happy to start paying and agree to a contract, but something more is amiss.
The single biggest contributor to churn is an un-personalised service minimising the community aspect.
Next Steps in Reducing Churn
Now you don’t need to know all your client’s birthdays or their pets’ names – but knowing their first name, knowing their targets, and offering to help/review their workout goes a long way. Offering help or reviews goes for everyone too. From the seasoned gym goers to those starting out. Don’t leave anyone out and bring people together – it’s all for the greater good.
This can lead to the creation of group classes either for those at a similar level or those looking only for a social workout. Providing regular classes and ensuring regular interactions provides consistency to your work but also to your clients’ adventure with your business.
Consistency and a community no longer make your facility “just a place” to exercise. It creates an environment of well-being and positivity that is difficult to replicate. This keeps your customers coming back for more and more. This leads to friendships, results and an appetite to keeping coming back. This leads to retention - not churn.
There is 1 last C to focus on – Constraints. Now it’s easy to say “follow the above” but then reality kicks in and makes this more challenging. You cannot remember everyone’s name or targets, sometimes classes are just not possible (Covid restrictions am I right…), and you might have other tasks that negate your chance to view the floor and offer your help. Constraints are part and part of running a business. Understanding what they are and how to overcome them are the next steps to reducing that churn and gaining retention.
Adapt, Overcome, Improvise
Overcoming the constraints leading to churn is now easier than ever but requires consistency… That C word again. While it is great to be active on social media it cannot beat software or technology that is designed to specifically help with automation, consistency, and retention. The options are vast, and many specialise in your niche. The software can seem daunting to many who are not tech-savvy but, find the right one and you have loosened the first part of your constraint.
With this, you can create your weekly classes that your clients will know and love. You can set class limits to not overcrowd and build a small close-knit group for a community characteristic. You will know who is attending the classes, or open space sessions, and you will know something personal with a featured customer/client notes section. With much more ease, and without knowing it, you are building your community and you will find many of these clients not being able to leave.
While keeping the focus on the everyday clients, what this software can also do is help you to easily identify ‘at risk’ members. Those who have stopped turning up or repeatedly cancel sessions. This presents a great opportunity to act with personal outreach. Have the plan and consistency. That 1 call, chat or message could be the difference between churn and retention. Do that a few times and your monthly revenue is secure and growing. Your members are happy and even shouting your name to their friends.
One thing we haven't mentioned is the significant benefit having customers signed up as members can have on reducing your churn. Having all of your customers signed up to to a membership plan greatly increases your ability to measure and track all of the activity within your business, which will lead to better planing and ultimately more money saved. You also have access to their personal information allowing you to market to them with targeted deals increasing your revenue while keeping customer satisfaction high. Using memberships allows you to have an accurate view of your business at all time, manage your business more effectively and save money.
Summary: What You Need to Know
I am sure by now you’re sick to hear the words churn and retention. We know it can be the Bane of management. So, I will end this on this message…
Remember and focus on the 3 Cs - Community, Consistency, and Constraints. Build that community of clients. Be consistent in your classes, client approach, and client interaction. Know and overcome the constraints. Do not underestimate the churn or retention and following these Cs will leave you with more time to grow your community, watch your revenue increase, and leave you to do more of what you love.
If you want to learn more, please book some time in my calendar (I'm Head of Customer Success fyi, not sales 😉)
We can discuss how we can help you or we can place you in the right direction