One of the biggest concerns for gyms and leisure centres around the world is customer loyalty. A sharp and sudden drop in membership numbers is common during specific times of the year, such as the New Year when resolutions start to fade and people slowly lose the habits they want to build. It’s a difficult time of year especially for gym and leisure industries because business comes and goes depending on the time of year or the season and it’s important to build your business model around making customers stick.
If you want to inspire loyalty in your services, then it’s important to start building a business model around it. You need to think about things such as who you consider to be your ideal customer or the methods you use in order to reach out to them. What you invest your resources into can also drastically change the way your business works.
Many leisure centres and gyms find that it’s cheaper to keep their members loyal than spending money on finding new ones. This is usually because new members have access to special deals and discounts in order to entice them into joining. However, it’s not common to see those new members stay for longer than their trial or discount period. In fact, after attending your gym or leisure centre for a few days or weeks, they may disappear entirely.
By increasing your retention rates by as little as 5%, you’ll increase your profits a significant amount compared to aiming for new memberships. If your business model focuses on flexible memberships and drawing in customers with no-commitment deals, then you may find more success by offering long-term deals such as a 12-month contract or discounts on longer membership periods.
Since you’ll have fewer people coming and going, you’ll hold onto your loyal customers and this means you’ll spend less on administration fees or maintenance and more time on growing your business. Long-term membership deals also guarantee profits for a longer period of time, reducing the fluctuations in profit that many gyms and leisure centres are subjected to due to the nature of their audience.
Another advantage of focusing on retention is that you’ll have an easier time managing your cash flow, especially if you use Direct Debit to collect payments from your audience. Direct Debit payments are easy to implement and offer a great deal of convenience for your audience as well as your own business. It’s also much cheaper than other methods, and this helps you make room for discounts and loyalty incentives.
So to conclude, if your gym or leisure centre business suffers from seasonal fluctuations in memberships (and thus profit) change your business model to target long-term loyalty, not short-term convenience for your customers.