Looking to boost your gym's member retention rates? Look no further! Our game-changing strategies are here to help you take your gym to the next level. Dive in and discover the secrets to success:
- Understand the landscape of member retention: Gain a deep understanding of the factors that influence gym member retention. From analyzing industry trends to identifying common challenges, this knowledge will be your guiding light.
- Gather insights on member behavior: Get to know your members inside and out. Dive into their preferences, motivations, and habits to create personalized experiences that keep them coming back for more. Uncover what makes them tick and tailor your strategies accordingly.
- Develop strategies for member retention: Armed with a wealth of insights, it's time to craft winning strategies. From creating engaging classes and programs to offering exclusive perks and incentives, we'll guide you in designing retention-focused initiatives that will keep your members loyal and satisfied.
- Monitor retention performance: Don't just set it and forget it! Continuously track and measure your retention efforts to ensure they deliver the desired results. Our comprehensive monitoring tools will empower you to make data-driven decisions and fine-tune your strategies for maximum impact.
With our expert guidance and these game-changing strategies, you'll be equipped to conquer the world of member retention. Elevate your gym's performance and watch your member base thrive like never before. Let's dive in and make retention a top priority today!
The Landscape of Member Retention
Many things impact member retention for gyms. Trends in competition, consumer behavior, how companies market, and more are all specks on the landscape. Read on to see what’s evolving in the industry.
Gym Revenue and Club Member Trends
The revenue pot for the industry has continued to shrink. The estimated value of health and gym companies in the U.S. for 2023 was $30.8 billion, which is much smaller than its peak in 2019 at $45.4 billion. Industry projections show a growth trajectory of a 12 percent compounded annual growth rate (CAGR) through 2028 worldwide with the U.S. as the largest market.
Looking deeper into growth and retraction, the IHRSA’s Health Club Consumer Report offers insights. The number of health club consumers grew to a record 76.5 million in 2021, and that group is very diverse in age, gender, income, and interests.
Industry Membership Retention Rates
The Fitness Business Association (FBA), formerly the Association of Fitness Studios, stated that the average studio retention rate is 75.9 percent. Personal training studios have an even greater rate of 80 percent, and traditional health clubs earn a 71 percent retention rate.
These numbers appear to be a great benchmark to aspire to and are much higher than other industries. Many businesses believe they can backfill those losses and see growth.
There’s a fallacy in the belief that adding new members is sufficient to mitigate the financial impact of churn. This misconception doesn’t take into account the high costs of customer acquisition and the velocity at which you’d need to add members.
For example, If your annual retention rate is 75 percent, and you started the year with 1,500 members, that would equal a loss of 375 members. Thus, you’d need to add that many back in the following year just to stay even.
Trends Impacting Member Retention
Several new and emerging trends affect member retention, including the following.
Member Retention vs. New Member Acquisition
When gyms look at revenue streams, they often focus dollars and effort on new member acquisition. This is essential to growth—but it often gets too much attention. It is more expensive and resource-intensive to acquire than to retain, and only 18 percent of businesses concentrate on retention. Without strategies for retention efforts, 9 percent of companies lose customers to competitors.
Knowing that the pool of consumers is smaller and competition now includes traditional and digital options, your gym will have its best chance at profitability by targeting retention. The best way to do that is to practice customer lifecycle marketing, which involves understanding customer motivations and personalizing messaging to them.
Using Data to Understand Customer Behavior
The new age of customer retention runs on data. Tracking members’ activity and engagement, both in-person and virtually, enables more insights and personalization. By analyzing this data and acting on it, you can, for example, trigger a re-engagement email series for those who haven’t interacted in the last 30 days. Remind them of the value of their membership and incentivize them to visit.
Klaviyo’s Mindbody integration gives gyms access to lots of member data to drive personalization. Features include:
- Confirmations for appointments or classes
- "Thank yous" to members for visiting
- Invitations to rebook
- Promotion of memberships to repeat clients
- Location-specific content to relevant members
- Booking reminders for repeat services
“To gain a true understanding of every member, you need to know how they engage with your business across all channels — digital and in-person. Klaviyo’s Mindbody integration provides a unified view of all your client’s actions and preferences. You can use this data and your marketing channels to build meaningful connections with every member.” - Kelly Fontaine, Product Marketing at Klaviyo
Emphasizing What’s Popular: Personal Training
As noted, gyms with personal training have the highest retention rates. If you offer personal training, you should use it as a tool for retention. Make sure members are aware of the service through communications. For those who have used personal training before but activity has slowed, offer them a free session to get them back in the gym.
Other Factors Impacting Gym Turnover Rates
The most crucial time frame for attrition is within the first six months. Half of members cancel during this period. After a year, the attrition percentage decreases to 8 percent for males and 16 percent for females.
Why are the first six months so critical? Some of this relates to forming a habit; the six-month mark is enough time for something to become part of a routine. The top member satisfaction factors are:
- Opening hours
To understand how these factors impact turnover rate, look at data you have from exit surveys of churned members to identify connections and opportunities to improve. This intelligence supports customer lifecycle marketing communications, helping members move from simply making transactions to becoming loyal fans of your business.
Some things you can’t change, such as someone moving to another part of your city and creating an unreasonable commute to your location. However, other things that could be detractors—such as your opening hours—are adjustable.
Understanding Member Behavior
The landscape of member retention is complex, but it’s easier to navigate when you understand member behavior.
Data related to your members’ behavior provides great value. Analyzing this data can give you an objective view of customer usage and satisfaction. It also provides actionable insights you can execute to minimize the risk of churn.
Analyze Member Engagement Patterns
Several engagement metrics are indicators of retention. Those include:
- Check-in frequency: How often are members visiting facilities? What are their usage patterns? Measuring this metric will help you understand how “sticky” your business is to members. If these numbers drop off, it’s time to launch re-engagement communications.
- Average length of membership: How long do most members stay? Knowing this about your average member will help you be on the lookout for when turnover is most likely, so you can proactively begin retention strategies.
- Digital engagement: Another set of numbers to view is how often a member engages with you digitally, from reading SMS to opening emails to engaging with posts on social media. This information gives more context for a member’s satisfaction and loyalty.
Identify Churn Indicators
A customer data platform (CDP) is an excellent tool for gyms. A platform such as Klaviyo makes it easy to store, manage, and analyze customer data at scale. A CDP can integrate data from multiple sources, including Mindbody, giving you visibility into churn indicators. Klaviyo has gym- and fitness-specific CDP features to support retention, including tailored segmentation for more personalized messaging.
As you monitor your members’ data, you’ll have a clear view of what indicates churn. In turn, you can counter these elements with personalized engagement that ensures you continue to influence them positively as they move through the customer lifecycle.
Measure Satisfaction with Member Feedback and Surveys
The best way to know if members are satisfied is to simply ask them. Using the Klaviyo platform, you can streamline and automate surveys via SMS or email to capture more member feedback. The responses from members provide useful information regarding their journey, behaviors, motivations, and preferences. Learning what members love—and what they don’t—can help you create more optimized experiences.
"Your members want to know that you care about their opinions. Using Klaviyo’s Mindbody integration, you can trigger a timely follow-up after a client visits your gym or achieves an important milestone to ask for their feedback. Plus, you can sync your survey responses into Klaviyo to capture and activate even more valuable data about each member.” - Kelly Fontaine, Product Marketing at Klaviyo
8 Strategies for Member Retention
Customer retention strategies should remind members why they chose your gym. A consumer’s relationship with their gym typically comes with more emotional ties than their relationship with, say, their post office. After all, the choice to belong to a gym is about their health. To capitalize on these close ties, apply customer lifecycle marketing to member retention, which requires unified data, deep personalization, multi-channel functionality, and analytics.
These eight tactics will ensure you maximize your opportunity to retain members.
1. Personalized Communication Through Email and SMS
Personalizing outreach to members allows you to send relevant messaging that drives engagement and satisfaction. Using email and SMS as channels offers one-to-one opportunities to inform and delight members. These are proven techniques that don’t require considerable manual effort when you have an automation and segmentation tool like Klaviyo.
Email continues to be a highly favored tactic with high ROI. For every $1 you spend, you could see a return of $36. When you take the step to personalize emails, opens and clicks grow. In terms of member retention, email offers versatile ways to re-engage and remind members of all the perks of their membership.
SMS marketing is another option for personalization, and consumers are happy to engage in this way, with 93 percent interested in receiving texts from businesses. SMS also offers two-way communication features, so you can invite recipients to confirm attendance or ask questions. Including SMS in your retention strategy offers a unique way to engage. It is not a saturated channel, has high engagement rates, and is easy for users to respond to.
Here are a few examples of how personalized email and SMS marketing can influence member retention:
Start with a welcome series.
Once someone becomes a member, begin the relationship with a welcome series. In doing so, you make sure they know they’re important, moving them closer to reaching loyalty in the customer lifecycle marketing spectrum.
Welcome emails that hit the mark spur adoption and engagement. They are also a great way to deliver content and information about schedules, policies, contact details, and more tips for a great member experience.
Congratulate members on milestones and special days.
Send personalized emails to members and praise their success when they reach a certain number of visits or a yearly mark. Birthday messages with a special promo also show you’re there to commemorate special moments in members’ lives.
Follow up with a personalized note after a first class or session.
After a member completes a personal training session or their first class, email them to celebrate this first step. Then, include links for them to book another session.
Send satisfaction surveys.
Feedback is essential for member retention, and you can launch these surveys quickly and often via email and SMS. Answers will allow you to learn more about members, helping you fine-tune the personalization of offers.
Re-engage when activity decreases.
A drop in activity could be a sign of impending churn. Set triggers on this data point to disperse email and SMS campaigns that feature a blurb about a new class, a link to calendars, a personal training promo, or other retention content that you’ve seen re-engage members in the past.
Create a gym newsletter.
A newsletter lets you distribute curated content to all members. You can highlight new equipment, calendars, personal training opportunities, promotions, fitness challenges, and helpful content about wellness and healthy eating. A newsletter is another way to reiterate all the value people receive for their membership dollars. Make sure to embed links to pages to sign up for classes or join fitness challenges.
In developing your plan for more personalized marketing, you’ll need a way to collect zero- and first-party customer data. With this information, you can make data-driven decisions about personalization versus general assumptions.
Personalization doesn’t apply just to email and SMS. It’s a big part of another retention strategy: loyalty programs.
2. Loyalty Programs
Is your loyalty program actually creating loyal members? These programs can be an excellent way to foster more loyalty—yet U.S. consumers only actively use less than half of the 16+ programs they subscribe to. A key tactic for making your loyalty program stand out is—you guessed it—personalization. Members will engage with your loyalty program if they feel like it’s really for them. Every time they interact, you gather more crucial data, which you can use to hone your personalization—and so on.
Here are some other best practices to use to make your loyalty program a driver of member retention.
Define rewards for members and ensure they are clear.
One complaint consumers have about loyalty programs is that they don’t know how they work. Make yours simple, with members gaining points for attendance, goal attainment, dollars spent, referrals, or other activities. Then, explain how points translate to rewards. It doesn’t need to be overly complicated; you should be able to explain it in a few sentences.
If you want to make your gym part of someone’s daily routine, give them props for showing up. For example, if someone attends at least 15 classes a month, they automatically get entered into a drawing for a fun giveaway. Offering this encouragement creates loyalty.
Pre-register people when they sign up for a membership.
Make this part of the implementation process so everyone joins. People should receive an email confirmation with a link to sign into their account to see their balance. Incentivize members by offering bonus points if they complete their member profile or attend a class their first week. Doing this creates engagement from the beginning.
Promote the loyalty program in every channel.
There’s no such thing as talking about your loyalty program too much. Be sure it’s part of emails and SMS channels and front and center in the gym. When promoting the program, use real member quotes about rewards they earned so others can see the program’s value.
Gamify loyalty programs with challenges and contests.
Adults like games and gold stars as much as kids do. When you have a gamification component that ties activities to loyalty, it can increase participation.
Contests or challenges can vary depending on your gym. For example, you may have a 30-day challenge to complete at least 15 classes. After every class, members get to add a star to their profile. At the end of the contest, host a celebration for all those who succeeded and add points to their loyalty accounts.
3. Birthday Specials
Everyone wants to feel special on their birthday, and making that happen is one more way to foster a relationship and boost member loyalty. When you take the time to make a big deal about a member’s birthday, they’ll feel the love. Some ways to do this include:
- Sending a personalized email or SMS wishing them a fantastic day and offering a promotion such as a discount at your store or a free water bottle with your logo
- Acknowledging their birthday when they come into the gym by giving them a happy birthday sash or crown
- Mailing them a card signed by staff with encouragement and best wishes
These small gestures can go a long way in cultivating an emotional attachment to your gym, making them far more likely to remain members.
4. Renewal Incentives
Membership renewal is even more important than the initial acquisition of members. Most gyms have annual memberships, and sending an incentive for someone to renew early can be an excellent strategy for getting them to sign up for another year. Start at the 60-day mark and advise that they can save if they recommit in the next 30 days.
When planning renewal incentive strategies, you want to look back at any data you have about churn. Determine if any patterns are hurting renewal chances. Often, gym members churn because of cost; starting with a discount offer can solve this challenge.
The pursuit of renewal begins right after someone joins. Within your membership retention strategy, define all the touchpoints and actions that will make each member feel appreciated and valued. All the tactics discussed are part of this renewal push.
Another element of renewal incentives can be the anticipation factor. It doesn’t have to be a discount. Rather, it can be a preview of what’s to come, such as new classes, upgraded equipment, expanded hours, and other members-only benefits.
Renewal communications should also be multichannel—email, SMS, and in-person. Using many tactics increases awareness and action.
5. Exclusive Member Events
The next member retention approach is all about exclusivity. What can members gain from staying with your gym?
Partnering with other local businesses is a smart way to offer these events. Gym members are likely interested in all areas of wellness—and, thanks to your strategic data collection, you know what they’re most interested in and can cater certain events to specific member segments.
Some ideas to consider are:
- Physical therapy seminars through a partnership with a local PT provider
- Discounts on 5K fun runs like Turkey Trots
- Healthy eating sessions with dieticians or local meal kit companies
- Skincare demonstrations from estheticians and dermatologists
- Talks and presentations from local authors who’ve written books on fitness and health
You’ll need to develop a partnership plan for who to approach and why. Then, you’ll need to promote and coordinate these events to maximize their success. Members who attend will see that their continued investment in your gym gets them more than just access to machines and classes.
6. Training Teams and Community Building
People love forming communities with those who have similar interests and goals. Group training is a form of community many seek out when they exercise, with 40 percent of regular exercisers attending these classes.
People like the idea of working out as a team and not having to fly solo because it’s a chance to socialize and gain support. Everyone will be at different levels of proficiency, so those just starting off won’t feel embarrassed.
There’s even science to back up the benefits of group exercise, with one study finding it lowers stress by 26 percent. Over time, as people regularly work out together, they grow bonds with each other and instructors. These bonds are the glue of member retention.
Training teams deliver on four key components:
- Social outlets and working on fitness goals together
- Motivation and inspiration from the group
- Accountability, because people are less likely to flake on group classes than solo workouts
- Confidence boosts that come from gaining skills
No matter what type of gym you operate, there are plenty of opportunities for team training and group classes. One thing to keep in mind is that flexible scheduling matters because people all have different routines.
Adding new classes and changing things up also keeps members from getting bored. You can get insight from member surveys on what classes people would most like to see on the schedule. This info, along with attendance data, lets you plan out calendars that will appeal to members and keep them coming back.
7. Referral Programs
Another strategy to add to your list is referral programs. People are more likely to join if a trusted friend suggests it because of their positive experience. This exchange can even bolster a new member’s future retention, as referred customers are often more loyal because of how they find out about you. Eighty-two percent of small businesses cite referrals as the primary source of new customers.
The key to a referral program supporting both retention and acquisition is that it has to benefit both parties. When a member tells a friend about your gym and the friend becomes a member, reward both with discounts, promotions, free gifts, or extra loyalty points.
You have to know what your members want based on all those data points that live in your CRM. A CRM can be an effective customer retention tool when it aggregates data and informs you of preferences and behaviors.
For example, say one member is a regular class participant, whereas others spend money at your juice bar. You could personalize members’ offers based on what you know about them. Offering relevant incentives for each member will be more work, but it will make them more likely to refer friends and family.
8. Personalized Wellness Plans
Finally, we’re circling back to personalization and how data from your CDP and CRM drive it. You know that every member is unique in their goals, abilities, mindsets, and needs. You can collect data about all these things based on members’ interactions, feedback, activity, and engagement.
Now, put it all together to deliver personalized wellness plans. These can be part of your email and SMS efforts. They can also be offline from instructors and coaches. Examples include:
- A free one-on-one coaching session
- A workout plan from a personal trainer with machines and reps
- Nutrition guides to help with healthy weight loss
- Exercise recommendations that align with member health issues, such as good activities for those with limited mobility or chronic diseases like diabetes
When you take the time to develop personalized wellness plans, your members realize you value them as much more than revenue generators. Continuing to refine these as you learn about your members keeps them topical and practical.
Monitoring Your Retention Performance
Once you have member retention strategies, you must monitor and measure their performance. Each of your tactics will involve different kinds of engagement and action, so start by establishing your key performance indicators (KPIs). In other words, what metrics prove you are on the right track to increasing member retention? And what demonstrates that members have moved to loyalists in the customer lifecycle?
Top KPIs include these formulas:
Member Retention Rate
This measures the percentage of members who remain with you over a given time period.
Member retention rate = ((Number of members at the end of a period - number of members acquired during that period)/Total number of members at the beginning of the period) * 100
Monthly Recurring Revenue (MRR)
MRR refers to the revenue you generate in a month through membership fees.
MRR = Average monthly revenue per membership * number of members
Customer Lifetime Value (CLV)
This number measures the revenue you can expect from a member over the lifespan of the relationship.
CLV = Average purchase value * average customer lifespan
This measurement defines how “sticky” your product (the membership) is to a person by looking at their rate of return.
Stickiness = Daily active users/monthly active users
Customer Satisfaction Score (CSAT)
This score measures how satisfied members are with your gym. In order to get the numbers needed for this equation, you need to send out CSAT surveys like mentioned in Chapter 2.
CSAT = (Number of satisfied members/number of respondents) * 100
This measures the percentage of members who cancel or don’t renew during a given time period.
Churn rate = (Lost members/total members at the start of the time period) * 100
Keeping track of all these metrics can be daunting, but Klaviyo makes it easy with its reporting and analytics capabilities, which offer contextual analytics that feed you insights. What you learn from these KPIs will inform your retention strategies. You may emphasize some tactics more than others based on what the data tells you.
Gym Member Retention: Understanding Customers, Applying the Right Strategies, and Continuous Improvement
Each gym and each member is unique, but all people want to feel connected to the places where they spend time and money. You have the opportunity to make your gym such a place.
Member retention is a dynamic concept that changes based on internal and external factors. One thing is clear: Retention is critical to long-term success and profitability. You should put considerable thought, care, and action into retention because loyal customers deliver the most revenue in the long term.
You will never stop tweaking your retention strategies, and ongoing data collection to drive decisions is essential. You’ll need a robust CDP and CRM to support segmenting and personalization. Streamlining these processes with automation ensures you can scale.
Make your member retention marketing strategy a priority so you can gain all the benefits of having happy customers.