Retaining Members a Month at a Time

Let’s say you’ve got a prospective member who has shown a lot of interest in your facility. You’ve given her a tour, offered her a free day pass to try the place out, and even had the highest-performing member of your sales team sit down with her for a full twenty minutes, chatting like an old friend and answering a slew of questions. Yet, when it comes time for the prospective to sign on the dotted line, she balks—she just doesn’t feel like she can commit to a year-long membership.
Does this sound like a familiar scenario? With members’ increasingly hectic work lives and a tight economy, it’s happening more and more at gyms, health clubs, and fitness centers around the country. Something else is also happening more and more to directly counteract the phenomenon: Clubs are starting to offer month-to-month membership with greater frequency than ever before.
How, you might ask, could a club stay operational with month-to-month memberships? The better question might be: How could a club stay operational without them? As Geoff Dyer, Founder of AussieFIT in Columbus, Ohio, puts it, “Some 25 percent of all members become inactive within six months of joining a club, and that figure doubles, rising to 50 percent, after one year. Unfortunately, one of the black eyes our industry has earned is its reputation for locking inactive members into long-term retail installment contracts.”
Dyer recently discussed month-to-month memberships on IHRSA’s blog. These options are better, Dyer argues, because they allow the industry to focus as much on member retention as it does on new member acquisition. “If our clients can leave at any time,” he says, “simply by providing written notice, then we’ll likely be much more attentive to their level of satisfaction with our service, programs, and facility upkeep.” That is, allowing for month-to-month memberships will force health clubs and similar facilities to improve the services they provide—the incentive for keeping members happy will increase, and therefore the efforts to do so will increase. As a result, more customers will join. In the end, Dyer says, even if members leave the facility at a faster pace, the outcome can still be a net gain.
Jarod Cogswell, Founder of Enterprise Athlete and President of Fit Academy, Inc., agrees. “The challenge for you,” he says, “is to prove your club’s value on a month-to-month basis, which promotes and produces a higher level of services. It motivates your staff to focus on service, cleanliness, and member retention because every visit counts, and there may not be a second chance.” Cogswell acknowledges, this reality places a lot of pressure on the sales process, because if clients can leave at any time there’s a greater chance you’ll lose them. “You therefore need to be selling at the same or higher rate than the rate of your membership losses,” he says.
Nevertheless, Cogswell believes the month-to-month option can reap rewards for a club. “When people understand that they can leave whenever they like,” he explains, joining your club becomes a comfortable decision—both psychologically and financially—that will tend to drive the volume you need to be profitable.”
Another critical factor to consider is what kind of fitness membership software you are currently using to track membership data. The right club management software will supply you with the ability to access robust reporting as well as the ability to set up auto-billing or auto-pay for membership payments.
So maybe it’s time to consider how you could implement month-to-month memberships at your own facility. The key to success with month-to-month is providing your members with the incentive to return, and instituting such a plan could force you to revisit some of your systems and processes. This presents short-term challenges, but the long-term benefits could greatly offset those challenges.