Tuesday, 5 January 2016

Double your joining fees in January

January rolls round again, and the gym campaigns start with banners, flyers, emails, and text messages. The airwaves are buzzing with the same old hackneyed offers of no join fee, join for £1, half price first month, first month free, all during the busiest month of the year. But could you make more money in the short and long term by breaking the mould and charging more?

Any other industry would double the joining/start-up fee in their busiest month, check out the handy “when’s school half-term” service provided by a well-known family holiday provider below. We’re not saying it’s morally right, but they know when people want to visit, and they make the most of it.
When's school half-term?

Here’s 3 reasons why January offers make no sense:

  1. Members don’t join in January because of the offer, they join to help New Year resolutions, to make a new start, perhaps to offset the over-indulgence of Christmas, or to try to lose the extra winter pounds and start to get beach body ready. The offer is very rarely the reason.
  2. Smaller up-front fees mean shorter length of membership. All the analysis we’ve run for budget clubs, leisure centres and private/premium clubs show that reducing joining fees reduces the number of months that members stay for. The differences vary widely between clubs, offers, and regions, but the overall trend is that reduced joining fees mean lower lifetime value.
  3. Members who don’t pay for their first month don’t stick around as long either. Whether they don’t value the membership as much and therefore don’t visit and build up the habit, or they perhaps don’t get proper attention from staff, it has a clear effect. In some areas, we see some members joining on a free membership offer, visiting regularly then cancelling or defaulting on the first payment.

So double your on-boarding fees in January if you have the belief in your offering. You could ramp up the fees to full joining fee at the end of the month to encourage people to make a start now (if your pricing is dynamic enough).

Pay attention to your competition of course, but don’t match them on price… You might lose a handful of sales to their no-join fee offer, but you’ll get a few extra months out of your joiners, and more income in January. Check out the big budget clubs January joining deals – most are charging joining fees from £5 to £25.

What’s your January offer – anything innovative for 2016? Please comment below...

1 comment:

Colin Scott said...

I always found the offering 1st and 12th month free was the best way to ensure the offer was enticing, but with an eye on member retention.

You do need to offer something in January because if you don't all the competition will and you'll lose a lot of sales to them.

If people manage to stay the year, then they should be less likely to leave, especially if they are getting a free month around Jan next year when the renewed resolutions appear.

We did get the odd person cancelling in month 13, but when we put all the savings at the beginning, we found they were leaving after 3-6 months, so quickly went back to the 1st and 12th month free model.