Why member engagement can make or break your operation

  • Andy Hall
  • Aug 14, 2020
  • 8 Min Read

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Retention, retention, retention… it’s often what keeps us all awake at night.  A stat you’ll be all too familiar with is that it costs five times as much to attract a new member compared to keeping an existing one; it’s obvious why retention is a key driver of long-term profitability. As further evidence of this, Frederick Reichheld (Inventor of the Net Promoter Score) found that increasing member retention rates by 5% increased profits by between 25% and 95%!

With research showing that the UK fitness industry loses about 3.9 million users every year, and 50% of a club’s members quit within that time according to IHRSA – not to mention the 80% of members that join in January and quit within the first five months – retention has always been a constant battle. 

With the unique circumstances surrounding Covid-19, it’s become an even greater challenge. In fact, just 30% of people feel comfortable about returning to their gyms, according to a YouGov survey, so what can operators do to re-engage and retain the rather staggering 70%? 

Increasing referrals  

Everyone knows that referrals are a chief mode of acquisition for fitness clubs, but with Covid-19 giving rise to a new set of behaviours, fears and expectations, they are going to be even more vital in this next chapter for the sector. Personal recommendations could be the reassurance that prospects need and a key avenue for generating new memberships. 

According to a report by Nielsen, “83% of consumers say they trust the recommendations of friends and family.” Added to that, “66% say they trust consumer opinions posted online.” This shows that not only does the ‘power of referrals’ stretch outside a person’s inner circle, but having a virtual strategy for referrals is essential. 

In terms of the effect on revenue, “people are four times more likely to buy when referred by a friend” and “customers referred by loyal customers have a 37% higher retention rate,” so it makes complete business sense to dial in on referrals, both one and offline.   

Capitalising on an engaged audience

A recent survey found that “62% of adults in England say it’s more important to be active now, compared to before coronavirus.” And with 44% of people doing a home-based activity, including 23% doing online workouts (which is 7.4% higher than gym membership penetration) it’s going to pay to ensure you’re engaging with your members.

What systems do you have in place that encourage and incentivise your members to refer your facility to their social communities? 

Upselling and secondary spend 

By using technology, we can create a more ‘certain’ future. Using a virtual system to understand who is having a good experience and a bad experience (online and offline) allows you to target members to upsell and create a secondary spend. Members having a good experience are more likely to spend additional money. As well as boosting in-facility spending, this can also help to reduce a club’s reliance on offline income. This will be important as we transition through the phases of Covid-19, considering that we’re yet to find out how many members will return immediately once gyms reopen this summer. 

Increasing lifetime value

Despite the challenges we face, operators have a great opportunity to engage their members and increase lifetime value (LTV). Because many gyms are operating digitally, it’s opened up countless new possibilities for staying ‘connected’ with members, which were limited with the ‘bricks and mortar’ model. The good news is that tracking this doesn’t have to be any more difficult; in fact, it can be even simpler – and more empowering – for the facility.

Using a virtual hub, an operator can see the ‘full picture’ of how members are interacting with their business (both physically and digitally). Through data, it becomes clear how your online and offline offer can work together to deliver a more ‘joined-up’ member experience that drives engagement and retention – perfect as we enter the era of the ‘hybrid’ gym, combining a virtual and physical presence. And with a central dashboard, an operator can see the length of stay for each product or service (online and offline) their facility offers, all in one place – making it easy to be proactive and make smart business decisions. Here’s just one example…

Research by IHRSA showed that “the risk of cancelling is 56% higher in gym-only members compared to group exercisers.” whilst another study found that members who take part in just one group exercise class per week are “20% more likely to be loyal members than those who visit three times per week and only workout on the gym floor”. So, you would anticipate that members involved in group exercise would remain with your club for longer. And if not, why not? What needs to change to make sure your group exercise classes are performing in the right way? If you can turn this around, it’s going to make a BIG difference to your facility’s bottom line. Once again, data holds the key…

Using member usage statistics, you can identify which classes and PTs have the highest and lowest attendance levels. You can then adjust your offering to give members more of what they want, creating a positive uplift in club attendance, member engagement and LTV. This type of data also allows you to identify the best routes to take to help your members develop long-lasting habits with your brand and club. The data will show you which type of fitness and fitness products your members need to consume, and when, in order to form those habits. Once a habit loop is formed, retention becomes much easier and cheaper.

Don’t miss the boat (examples of proactive brands)…

Anytime Fitness is a great example of a brand that has been quick to react to the changing landscape. Following the news that each of their 120+ on-site locations in the Philippines would temporarily shut because of Covid-19, Anytime Fitness selected Volution to design a virtual platform and mobile application that allowed it to deliver first-class personal training sessions from any location. With the new platform in place, members can log in to a personalised portal to book virtual PT sessions, join live or pre-recorded classes or create their own at-home workouts, all within just a few clicks. This has kept revenue flowing and engagement high, even when members couldn’t physically visit their local gym. 

Ryan Cheal, from Anytime Fitness, said: “One of the biggest advantages that came with integrating this digital system is the ability to generate proprietary data insights. As soon as the solution launched, Anytime we were able to monitor data visualisations of each of our selected KPIs in real-time from a central dashboard.

This enabled senior managers to track key trends in user engagement, how many PT sessions had been sold, where penetration rates were high, which classes were proving more popular and how much revenue had been generated. Shift managers also benefited directly by giving them a clear view of staff availability, which has since led to fewer complications in scheduling and far less risk of double-bookings.

Of the members currently using the Anytime Fitness platform, around 50% of those hadn’t interacted with an ‘assisted product’ before – meaning a large proportion of ‘high risk’ members are now engaging more actively with the brand, which should lead to improved retention.

The shrewd decision taken by Anytime Fitness to integrate a remote module has ultimately allowed them to stay operational and sustain revenue throughout the most challenging crisis of our time – although the impact of this project goes much further than that. By taking this opportunity now, Anytime Fitness has opened a new revenue stream that will continue to support the growth of their business for years to come.

Another brand quick to up its virtual game was boutique operator, Frame. At the end of March, just weeks after the UK entered lockdown, the Frame Online platform was launched. Designed to keep members engaged, it offers three genres of workouts – Sweat, Sculpt and Party – with a “class to suit every mood”. Particularly interesting considering the range of emotion people are going through during lockdown. 

Consisting of 18 classes in total, these three genres are said to “transport users from their home straight into the Frame studio”. In addition to Frame Online, members also have the option of personalised, one-to-one, virtual training with their favourite instructors. 

Also worth noting is that Frame Online is available free of charge to NHS staff, police and teachers. By supporting the country’s key workers in this way, Frame has made its members feel proud to be associated with the brand. Not to mention that after the pandemic, all of these key workers may well sign up as members because of the care and generosity that’s been shown towards them.

Having a purpose-built, bespoke digital platform means you won’t get left behind by the crowd. Instead, you’ll have new ways to engage members by connecting the dots between home and gym, new opportunities to develop additional revenue streams and secondary spend, and an overview of your business that you’ve never had before, enabling you to increase member acquisition and retention. Is it time you grew your virtual capabilities?