A myriad of tools and programs can positively affect the member retention rate at your club. Before you implement any of them, take a moment to assess your understanding, implementation and management of the following fundamentals:
1. Have you done the math to know how much it costs to lose a member? To figure out how much you lose when a member leaves, consider the following assumptions, which may be low for your club:
• Joining fee = $75
• Monthly dues = $50
• Average stay of members = 4 years
• Referrals during that time = 4 per member
• Non-dues revenue per member per year = $1,000
If a member cancels at month three, the club has lost:
• Dues = $2,250
• Referrals = $9,900 (joining fee and dues for four members for 4 years)
• Non-dues revenue = $4,000 + $16,000 = $20,000 (Non-dues revenue for primary member plus non-ues revenue for four referred members)
• Total revenue lost = $32,150
These numbers are just for the loss of one member. How much are you losing when you have more than 50 cancellations every month, and what could you do with that revenue if you could keep 10 of those members? This is not information for management eyes and ears only. These numbers should be shared with the entire staff, and you should train staff about their role in minimizing this loss.
2. A pre-emptive approach to retention vs. a reactive approach to retention. Do you begin the retention process the moment the member joins or do you start it after the member has been absent from the club for three to four months? Examine your new member integration process. Is it limited to two orientation sessions, or do you have a new member integration survey? What about a 30-day integration program that is a customized approach to membership success — building relationships and individualized communication and connection for members that consistently builds value?
3. Understand the primary purpose vs. the secondary purpose in every staff member's job. When employees are at work, most of them (not all) are focused on the task of their job rather than on how their job helps keep members. Most of them do not understand that it is part of their job to retain patrons, not just serve their needs. How do you change their mindset? You do what I suggested in a previous column: revise all job descriptions to include the following phrase as the primary purpose of the job: “To create and deepen relationships with members we know and do not yet know that will add value to their membership and enhance their sense of belonging and community within the club.” By adding this phrase as the primary purpose and listing the task of the job, such as being a receptionist, group fitness instructor, tennis pro, membership rep, etc., as the secondary purpose, you help the staff focus more on creating a sense of connection to keep members part of the club. Of course, training the staff on the behaviors that affect this is absolutely necessary, as is giving them the information about how much it costs to lose a member. Have a discussion about what the staff could do with the additional revenue that you save when you keep more members. The connection between the two has to be clear.
4. Do you have a cancellation or a recovery process? When a member wants to cancel at your club, what options can you offer them? Are you being creative about options for them to stay, other than freezing or canceling their memberships? Are you using all your resources to keep them rather than letting them go somewhere else? Have you looked at the cancellation numbers you projected at the beginning of your financial year? If so, did you revise them in the scope of saving five to 10 members each month with creative and practical efforts? If your responses to these questions are “no,” then you are leaving a lot of money on the table by having a cancellation process rather than a recovery process.
If you can give yourself high marks in all four of these retention areas, then you can proceed with other programs. If not, I encourage you to manage these elements well before taking on any other new projects at the club.
Karen Woodard-Chavez is president of Premium Performance Training in Boulder, CO, and Ixtapa, Mexico. She has owned and operated clubs since 1985 and now consults with and trains club staff members throughout the world.