Members who make a friend at the gym are less likely to cancel
W
hat will your club do differently when it comes to member retention this year, and how might this
impact your bottom line? During 2014, Health Club Management
published a number of articles reporting on the results of the TRP 10,000 study – a longitudinal study of 10,000 members, conducted by myself in conjunction with The Retention People, which was designed to understand member behaviour at all points of the member journey, and how different factors infl uence retention. In the HCM series, we highlighted a range of factors that are positively associated with membership retention – including motivation, progress, group exercise, hassles and uplifts, and communication. In this article, we’ll pull together the
lessons learned so far into a strategy for 2015. The focus will be on the fi nancial gain from improved member retention and potential memberships saved.
Data and analysis To estimate income from member dues, we’ll model the effect of retention on 1,000 members over the first eight months of membership (the follow-up period of TRP 10,000). To standardise fees, we will assume all members pay a monthly fee of £50. All members pay
January 2015 © Cybertrek 2015
FIGURE 1 Estimated income over eight months based on TRP 10,000 retention data, from a sample of 1,000 members paying £50 a month
£52,000 £50,000 £48,000 £46,000 £44,000 £42,000 £40,000 £38,000
£50,000 Total income = £366,165
£48,500 £47,115 £46,190 £45,050 £44,090 £42,720 £42,500
1 2 3 4 5 6 7 8 Months since joining
the first monthly payment, yielding £50,000 (1,000 x £50), and from then on we can plot the income for every other month by multiplying the £50 monthly fee by 1,000 and then by the proportion of members still paying in the given month. So if 90 per cent of members survive the second month, the yield from membership dues would be £50 x 1,000 x 0.9 = £45,000.
Overall yield from 1,000 TRP members? Eighty five per cent of TRP 10,000 members retain their membership for at least eight months. Figure 1 shows that the total yield from a sample of 1,000 members over the first eight months of their membership, based on the TRP 10,000 retention rate, would be £366,165. So how can this be improved?
Read Health Club Management online at
healthclubmanagement.co.uk/digital 51
Income per month
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