retention series
Health & Leisure
“IT IS REASONABLE TO ASSERT THAT FITNESS STAFF INTERACTIONS ARE CONSIDERABLY SHORTER THAN THE SALES PROCESS”
Figure 4. Monthly risk of cancelling by total number of fitness staff interactions
18% 16% 14% 12% 10% 8% 6% 4% 2% 0%
No interaction 1-3 interactions 4+ interactions
risk of them cancelling in the subsequent month is roughly halved if they are spoken to at least once. Speaking to them at least four times (which means they must have been in at least four times) virtually eliminates the risk of them cancelling in the next month compared to if they visit and don’t get spoken to at all. The added benefi t of reduced attrition
is of course less demand on sales staff to replenish lost members.
staff-member interaction But is it cost-effective to speak to members more frequently? This is an argument put forward by many clubs – that they simply can’t afford the man- hours required to talk to each member. Many sales staff are paid a commission
for each sale they make as an incentive to make more sales. If fi tness staff interactions can increase membership yield, should they receive a fi nancial incentive to do this more, especially as the interaction rate is now so low?
www.gladstonemrm.com 01491 201010
To illustrate why this might be
fi nancially benefi cial, we present a case study based on 1,000 members over three years, using actual retention data from one ‘typical’ club. For illustrative purposes, analysis is restricted to members who pay monthly, did not pay a joining fee and are not signed to a minimum-term contract. In our sample of 1,000 members, the average length of membership is 11 months (a range of one to 36 months) including both live and cancelled members. We can estimate the fi nancial benefi t
of sales staff by taking the average length of membership among members who
Table 1. Membership yield by average length of membership
Interactions
None 1 to 3 4+
Average length of membership in months
4.2 9.9
27.3
Total income from dues
£188 £444
£1,229 july 2011 © cybertrek 2011
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