Tuesday, 30 April 2013

Do Something Before It’s Too Late

In tough financial times, many businesses concentrate so much on sales, that they often upset or overlook their existing customers. This pattern is particularly apparent in the fitness industry with clubs offering no joining fees, or undercutting each other on price to hit their monthly sales target, while members cancel after a few months.

Many clubs look at how many members cancel each month
too, measuring their attrition or retention rates, but once the member has left, it is too late. It will now be considerably harder (more expensive) to get them back into the club. Some clubs' model is to work on the churning members, know their re-join patterns and get in touch with them at the critical time, but you need a very structured process to do this with any reasonable rate of return.

In fact, once the member has made up their mind to leave, it is tough to keep them. The horse has not quite bolted yet, but it's difficult to shut the barn door. You need to act much sooner, for the member's benefit, and for the club's bottom line!

Deploy your member saving processes earlier in the lifecycle – try these for size:

  • doesn’t make 4 first month visits
  • review is 30 days overdue
  • hasn’t had a review for 6 months
  • hasn’t visited for 21 days

Sending a renewal letter at 11 months to a member who hasn't visited for 7 months is neglectful; you really should have been in touch 6 months ago. You need to spot potential cancellations before they happen. Then do something (anything) to try and stop those members from walking out of the door.

You’ll invest a lot less keeping them now, for a much bigger return.

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