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the back of a discount generally isn’t a person that would have joined or stayed at your normal rate. Many people ask whether retention is more important than sales. They’re both vital for a successful business, but think of it like this: if you have 1,000 customers that stay for three months you’d have to sell an additional 3,000 memberships to achieve the same revenue when compared with 1,000 customers that stay 12 months.

Growing secondary spend Developing other revenue streams can help offset the immediate loss of members, while increasing spend-per-member can be especially valuable where there’s resistance to membership price increases. Increasing secondary spend has the added benefit of leading to increased revenues across the board as your membership numbers rebound by making each member more valuable. Upsell existing members with new services, such as weight management programmes, food boxes, coffee club memberships and fitness testing. Doing so will also have the benefit of improving your overall service and driving retention, so the business will do better and members will be happier.   Research carried out with a mid-market chain showed that after seven months’ membership, members were spending up to an additional 50 per cent of their monthly fee on secondary spend within the club.

Drive secondary spend by offering services such as food box deliveries

Play to your strengths It’s important to recognise your strengths and weaknesses. Fitness businesses have a deep understanding of health and wellbeing and the benefits of exercise and provide amazing customer experiences through this knowledge, but you may feel you are light on skills in areas such as customer acquisition. If this is the case, focus your energy on your core strengths. By providing a five-star experience you’ll convert more prospects, get more referrals, encourage more secondary spend, work more efficiently and in doing so, reduce acquisition costs and increase lifetime value, as members will naturally stay longer, due to the excellent service you’re offering.    Outside your core competencies, implement the best systems you can get to help your business function with leaner resources. For example, if it’s beyond your scope, you don’t need to build a digital home workout platform when you could partner with an expert offering the same thing and when it comes to your customer acquisition programme, you may want to outsource this, by selecting the strongest partners. The wise adage says that if you keep doing the same things you’ll keep getting the same results – if you’re lucky. The risk is that you’ll see diminishing returns as other operators become more competitive, so now is the time to embrace new ways of working as you scale-up your business for post-lockdown growth. l

About the authors Paul Bedford is a health club retention specialist, while Jamie Owens is director of fitness partnerships at Hussle

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HCM Issue 5 2021  

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