January is just around the corner, and most clubs are hoping for a windfall of new members. It’s normally the best month for fitness membership sales, but for the last two years, many clubs have missed January due to lockdowns. By just opening your doors to members (fingers crossed), you should have the best January in recent memory. But getting loads of ‘new’ members is relatively easy. How can you maximise revenue and retention, and really put your business on the path to recovery?
You don’t need to go full “Centre Parcs” and double your joining fees in January (although I’ve written about this in the past – read more here). But discounting, waiving joining fees, and offering financial incentives is not a positive business strategy for many reasons. Let’s look at some of them.
Your Overheads Are Up
The cost of running a business has increased and continues to rise. Many clubs have loans, rent deferrals, and VAT arrears following lockdown. Everyone is now facing growing insurance costs and soaring energy bills. Simply getting back to 100% of your pre-pandemic membership levels is not going to help you to break even. On a basic level, you need more members, who stick around longer. On top of that, those members need to pay more, whether for memberships or secondary spend, add-on products and subscriptions.
You don’t have to put your current members’ fees up (although lots of clubs have already done so). However, if your members are loyal, and want your club to survive and thrive, then most will be happy with a price rise. More about how you justify that in a minute.
Don’t Disenfranchise Your Existing Members
You can destroy any member loyalty by reducing prices for new joiners, especially in January, when everyone wants to get fit and healthy again, especially your existing members. Create more loyalty by visibly increasing membership fees in January for new joiners, and freezing prices until April for your existing members. This strategy can often bring in more sales in December too, as prospects join to beat the price increase.
Don’t Race to the Bottom
When low-cost clubs first arrived, lots of independent and public sector clubs learnt a hard lesson by trying to compete on price. They got rid of some great staff, and then lost many of their members too, because they offered a similar product, at a similar price, just not as shiny as the new budget gym, and without the necessary marketing and systems in place.
You cannot compete on price with low-cost gyms. It’s fortunate that members are willing to pay more for service and smiles, customer care and community. Members who are won back from budget clubs always mention customer service, staff and atmosphere as their reasons for returning. It’s never about the equipment or the size of the club.
Low Value Members Don’t Stick Around
It’s a well-researched fact that members who pay less (NoJoinFee, OneMonthFree, etc.) don’t stay as long. They don’t value the membership as much and are not committing properly to their health and fitness journey. At certain clubs, they may not experience the same levels of service, such as a welcome session, class, or programme.
Some of those members who join on a deal are bargain hunters who will naturally jump to the next best offer as soon as it comes along. If you decide to work this churn process at your club, you’ll be constantly working on new offers to beat the competition and running to stand still. Better to focus on building a good strong, loyal membership through value instead.
Add More Value…
Enough of what not to do… what should you do more of to boost your business in January? The headline is simple – add more value, and where possible, charge for it.
New Member Value
For new members, show them the value of your club, through service, staff, community, customer care, etc. as mentioned above. Define and describe your club, staff, or product’s unique selling points. Then go to town on them, with member testimonials and stories. Make sure you’re delivering this added value to as many new members as possible, whether it’s welcome sessions, bespoke programmes, beginner classes, or any other form of hand-holding that gets them hooked on regular visits or other engagement in club or online.
Existing Member Value
Heap on the extra value with your existing members as well – they also need new programmes, exercises, classes, health checks, and body measurements. These could reinforce the value of their existing membership or be an add-on or upgrade to boost the value to them, and therefore to your revenue. If you boost sales and retention, it’s a win-win!
Think Outside the Box
New ways of thinking and working have flourished over the last couple of years, and there are lots of new business models that can bring in new members or subscribers to your club. They don’t all want to work out regularly, or even to exercise as such, but they do want to learn about their health, or be supported in their goals. Health seekers are out there looking for help, and you’re well positioned to add value for them.
Value Scores More Than Free
“FREE is a Four-letter Word” is a mantra that many of you have quoted back to me, and it’s so true. You need to add value to your membership, rather than de-value your products and services.
Any club can hit membership targets with offers and discounts, but it’s not a good sales month for the business, and will be followed by some real retention challenges. Grow for the long term by heaping on the value and charging for it. Your loyal members will be eternally grateful.
How do you add more value to your members? Leave your thoughts in the comments below, or get in touch with your questions or for more detail?
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