Show 121 Fitness Business Intensive Paul Brown on Retention 4 of 4
Welcome along to the FBP Intensives brought to you by ABC Financial. I’m your host, Chantal Brodrick. This is a four-part series, where one expert guest will present on one key topic, each week for four weeks. We’re into our final week of the first series. So, if you missed weeks one or two, then hit pause and head over to www.fitnessbusinesspodcast.com. And in the search bar, type “Retention Intensives.” Take a listen to any of the shows you’ve missed and then head straight back. Our first topic for the FBP Intensives is Retention. And our special guest is Paul Brown. In week one, we spoke about what matters most when it comes to retention. Week two, our topic was Trends and Traditions. Week three, we explored Retention in Optional Programs. And this week, we’ll chat about Measures of Success.
Chantal: A very warm welcome back Paul.
Paul: Thank you very much Chantal. It’s great to be here one last time.
Chantal: Paul, can you help your listeners understand some of those important markers for their business, when it comes to retaining clients?
Paul: Absolutely, Chantal. Look, first one that I always go back to is good old IHRSA formula. IHRSA, The International Health, Racquet & Sportsclub Association. Great friends face to face and I’ve worked with them for so many years. The annual retention formula thereof, how many members do you have in a particular month? How many did you have a year later? What was the actual volume of memberships sales you made over that period? So, if you start with the number you had over a year ago in January, you sold a bunch of memberships over that period, add those two numbers together, you’ll end up with the total potential memberships that club should have. Then, you ask yourself the question, what percentage of those members that actually are still financially available? So, if you had a thousand members this time last year? You’ve sold 500 memberships, theoretically, you should have 1,500 members over that twelve-month period. But of course, you lost many. Maybe you’re back to only 1,200 members. So, you’ve lost 300, which is about one-fifth of your membership. Your retention is 80 percent. Eighty, that wouldn’t be a bad number. Because 78 percent tends to be our annual retention Utopia. I must confess, in the current market, there’s a lot more convenience clubs opening up. Clubs kind of edging to each clubs market. Therefore, we’re seeing retention sitting around 70-74 percent in our good clubs. And considerably lower in the clubs that are struggling.
The second thing that we look at for me. More important is the average lifespan of membership. I want to know for the club, what is the average length of membership that every single member has in that club and the cancellation. What is the average lifespan of that cancellation group? So, if you look at all the members who quit your club last month, go back and look at their joined date, look at their expiration date. That will give you how many months they stayed. Average that out. Is it nine months? Is it 15 months? Is it 27 months? Is it five months? Whatever that number is, try to bare it. And then if you could narrow that down to members who had a joined date of inside the last two years. Because clubs have been around for a long time, you could see the numbers being skewed by some of those real legacy members. And then finally, what percent that didn’t last eleven months in your club? That’s a really good question to ask. Those members that you lost last month, how many of them joined and quit inside the same 11-month period. I choose 11 because a lot of clubs still offer 12-month contract memberships. Me personally, I don’t need contracts to keep my wife around. I don’t need contract to keep my members around. They stay because they choose and they want to. But if you do a per-month memberships, skew it up by saying, let’s look at the 11-month attrition rate.
Now, we go to our next favourite one, the early mortality rate. Like for like, month for month, what percentage of our members stay for one month? What percentage of those same people stayed for a second month? What percentage of those same people stayed for third month or fourth month? Look at the percentage drop off. So again, if we go back to May last year, and you might have signed up a hundred members last May. Out of all those same 100 members, how much of those are still financial in June? How many of them were still financial in July? How many were still financial in August? Keep running that and you’ll eventually come across what we call “The Cliff”. Typically, it’s five months after they’ve joined. See, if I’m right. See, if I’m wrong. It might be different in your club. But I guarantee you, there will be a cliff. There will be a point where that number just jumps. It seems like everybody just got off the boat at the same time. We see this five months, let me know how you go. And then of course, you get to the bottom line. When someone does leave, when did they leave? How long were they there? When did they stop attending? What’s the gap between their last visit and their date of quitting? I guarantee you, it would be a couple of months, if they don’t have a contract in place. Why did they leave? What mood were they in? Who did they tell? And what did they tell them was their reason for quitting? They might tell you one thing and tell their friends something very very different. Of course, you want to know, is there anything that you could have done in the beginning or in the past that would have kept them? And finally, could we do anything now to get them back?
So, you know, you could measure things but just remember, you’re talking about people, personalities, lives and souls. Do it if you can to find out why they gave up on you. It might help you save the next member.
Now then, we go to proactive measures. I want to talk about measuring Client Independence. Making sure that clients fall in love with your club because they love to exercise and they’d rather do it with you than anywhere else. Now, we have our face-to-face retention program. In U.K. we call it Empower with our partners there. But bottom line is you need an on-boarding program, whatever you call it, however you structure it. There needs to be a program to get members from joining you club into falling in love with it. Now, that should be a multiple one-on-one coaching session program. It should have systematic communications. I recommend paper-based and digital educational content. We are still mad fans of paper because paper is physical and tangible. But of course, you would want to be able to email or have digital content to show we are indeed in the current age. You got to be able to guarantee the results. If you can’t be certain that people who go through your programs will get benefits, then there’s no benefit of doing it at all. We can look at people in the eye and say, you’ll be a different person at the back end of this four to six-week journey. Just trust us and go through the process. And I strongly recommend it’s included in your membership. We’ve done several experiments around the world with some very good partners, with very good intentions. And when we’ve offered the client an option to buy in or buy out, almost always the uptake is never high enough to really impact on the group-wide retention. It’s when it’s included in the membership that people go, “Well, I’m paying for a membership. This is part of what I do. I’ll give it a crack.” We get the maximum uptake and therefore, we have the maximum impact on the lifespan of our clients.
And the final thing with about guaranteeing results is you’d got to be able to not just show the physical benefits because they take much longer. The best thing about coming to our clubs isn’t how you great you look, it’s how great you feel. And I’ll talk about some of those results pretty shortly. Then, with that, you’ve got program KPI’s. What are your enrolment rates? We typically get around 85-90 percent of all our members around the world taking up our program. We then look at appointment show rates. We’ve got clubs that will do six, seven hundred appointments in a month. We need to know that people are taking advantage of these appointments. Our benchmark is 85 percent. People right there right now shaking their heads saying, impossible, can’t be done. I’ll give you a list of a hundred clubs right now that will tell you, they are doing it on a daily, monthly, and weekly basis. Because when you’ve got reason to show up, you’ll find a way. When it’s valuable to you, you’ll find a way. When it’s important to you, you’ll find a way. Now, every program needs to have a graduation, a finalization, an achievement date. We monitor the graduation rates. Not everybody who starts this journey is going to finish it. Some people get to a point and they say, “You know what, I’ve got as much help as I need, thanks very much.” And after two to three weeks, they feel that they’ve achieved that level of independence. Some will go all the way through the program, which in our case takes around four to six weeks. So, again, you want to track how successful you are at getting people all the way through. And that’s what we call, stages complete report. We know, on average, on every club we work with, the average member gets 3.5 appointments. Some are taking five, six, seven, eight over the year. Some are only taking one or two at the beginning. But we know that we get three and a half appointments per member, which are only 30 minutes by the way. We have a significant impact on the engagement level of their clients, their confidence, their exercise working out habits, the way they feel about the club. And that gives us an opportunity now to measure workout adherence. We set them workout targets and we track and make sure that they stick to those targets. That good old FITT principle. Frequency, Intensity, Time and Type. Well, frequency is how often you’re doing your cardio and how often you’re doing your weights each week. We set our clients a goal. It could be twice a week for the weights, two to three times a week for cardio including their sports outdoors. So, maybe they’re only in the club only 2-3 times a week. The get value from that. And then we hold them accountable to achieve that frequency target. We monitor with them. Of course you’ve got software that could do that. We have other means as well within the club to instantly identify our clients. And if you don’t monitor frequency, it’s truly hard to monitor the next critical number, change in frequency. So Chantal, if you’re working out at an average four times a week, five months in a row and that suddenly drops to once a week for a month, we know straight away there’s something wrong. Or if you’re a three times a week person and that drops to once a week, we know there’s something wrong. Anytime we see a major change in frequency of attendance, we tag that as an early warning sign that there might be something about this client’s happiness or success in the club. We want to find out what we can do about it. So, that’s just a few of the proactive measures that we believe you can do to predict and enhance the longevity of the client by engaging, getting them comfortable and getting them related into the club.
Chantal: Okay, Paul, so marker number one was Reactive Measures. Number two was Proactive Measures, what’s number three?
Paul: Number three is the one that gets the clients the most excited. And that is the Results and Feedback. You know when I give my talks around the world, I love to ask the audience, “Did you measure any type of fitness evaluation on your members when they joined in January?” They all joined up with this new year’s resolutions, these promises to do this and become this. Did you measure any of their starting points? And almost always, the audience very enthusiastically raises their hands and say, “Yes we did. We do evaluations. We have personal trainers doing assessments and so forth. And they ask the very same question, “Did you reach it?” How many are those since January, what we’re now, maybe four or five, six, seven months later, how many of those members have actually those same measurements, those same benchmarks, revisited to show the before and after. And unfortunately, the room usually goes very quiet at that point because they know it’s just not happening. They know that’s not their main objective, which is kind of weird because it’s the client’s main objective. It’s the whole motivation for the client to come in not to know how unfit they were at the beginning but to know what they’ve achieved after their efforts. So, we’re massive on results. So, the first measure that we go for is we want to do the mindset of the client. And I call this the Savvy Scale. You might remember my first presentation with you guys, we talked about checks. The confidence level of a club. Are they confident enough to train in the club without feeling intimidated? Habit. Do they workout often enough to see results and see value for money? Enjoyment, do they like it? Not avoid it and not get bored? Challenge. Do they know how to push themselves with just the right intensity level to not risk any injury but at the same time, get those results. Knowledge. Do they not just know what to do but why they do it? Why, in a way that motivates them to keep pushing through even if they kind wish they could be elsewhere. And Social; does it feel like the place to be. We measured this. We’ve learned over the years on these scales, there’s a certain tipping point. If we could get them to a certain level on a scaling, we know that they are most likely going to be here for months or years. Here’s an interesting fact, forty one percent of their new members in all their clubs that we’ve benchmark this on, only forty one percent fall above that savvy threshold when they first joined. Four to five weeks later, when we go to the same benchmarks again, that number’s gone up to 78 percent. That’s kind of like saying, of all the teenagers in this town, only forty percent know how to drive a car. We put them on through a driving course and now, nearly 80 percent can. We’ve reduced the risk of accidents tremendously. Still not a good idea to get on the road when those other 20 odd percent are out there but you get the idea.
Right, the next measurement that we do are the Anthropometrical measurements. These of course are the ones that we most talk about with our clients in our marketing. You know, looking good, trimming up, building those biceps and so forth. We don’t necessarily make a massive deal about it but I do believe you’ve got to appeal to the vanity goals of our clients initially. They come for vanity, they stay for health. So, let’s measure them. Let’s measure their waist, let’s measure their arms, let’s measure their thighs, it’s interesting to note that we lose one inch or two and a half centimetres of their waist in around 30 days. That’s a significant improvement. That’s at least one notch at the belt buckle. Certainly worth knowing. We see even greater measurements on those with greater need but that’s the average. Then we get into the feel good factor, Best thing about our gym is not about how great our members look, it’s how great we help them feel. We’ve seen an average improvement of 65 percent across the five benchmarks of energy levels, coping with stress, quality of sleep, body image and just feeling good about yourself. Typically, scores of three out of ten become a seven. Typically, scores of a five become an eight. And typically, scores of seven become a nine or ten. It completely changes the focus of why they train. When they made that connection between how they feel, and their new active lifestyle, you’re getting them into that identity. You’re getting them at that point when they go, “I am thin. I am active because I feel like this and always want to.” And then, you start to get the feedback from the clients. So the next thing we benchmark is our 30-day feedback sheet covers, are you happy with the cleanliness of the club? Are we friendly enough? Do we have the right equipment for you? We’re you happy with your program? Were the classes right for you? Were we punctual with our services? And what do you think with the information resources we gave you digitally, and also in paper-based?” And then, which of the stages that we offered you so far in our programs that you’ve enjoyed the most? And which ones have you maybe known you enjoyed the most? Which one did you enjoy the least? So, we can do a better job at being better at it. Work from what we are saying here Chantal is whatever program you’re offering, you get an opportunity for the client to give you feedback when they’ve been at the club long enough to know what they’re talking about. Way too often, we ask these clients questions on their first day. Hey, are you likely to refer us to your friends and family so we can get us some more business straight away? How about we earn that business. How about we earn that right. And we do. We ask the question.
Way back in 2003, I was in Milan, Italy with the great John McCarthy. You’ve heard he’s a friend of mine, a founding executive secretary of IHRSA. John told me, he said, “Paul, I’m doing research for a book I’m going to write for IHRSA. And I’m trying to understand as much about Retention as possible.” So he interviewed me. And at the same time, he shared with me, that it come across a question that he believed was a defining question you need to know the answer to; whether a client is going to stick around or not. And guess what, that was the question we now know as the Net Promoter Score. It is how likely are you to refer as to your friend or family on a scale of zero to ten. And there’s all sorts of formulas that come out of that. We’ve been asking that question in our program ever since 2003. Ever since my friend John introduce me to it. And I’m telling you Chantal, get the program right, you’ll almost always get a ten. Almost always get a ten.
Chantal: Paul, over the last four weeks, you have been tremendously generous in sharing this information with us. To finish off today with our very last episode, can you give us a quick summary that we’ve gone through over the past four weeks?
Paul: Well in week one, we’ve talked about Trends and Traditions. We’ve talked about what we knew and where we’ve come from. And it kind of turns out, we’ve come full circle. It seems like in the beginning it was all about people buddying up and training with one another. Then we go a little bit technical and start to be specific about the style of coaching being offered. Then the clubs grew and became the battle of the big box. Then we started to shrink them. We started to make smaller clubs and make them more accessible and convenient and some people have actually got to the point of taking stuff away to try and minimize the cost implication. You know what? We’ve realized that people matter. So we’ve come full circle and we are seeing now a resurgence in the kind of enthusiasm that our staff can offer, bringing the enthusiasm out in our clients.
In Episode two, we called it Innovations in Technology. So, we spoke about the new emerging trends. And we definitely don’t want to ignore the fact that there are some wonderful technological advances we should always be taking advantage of. However, I think the summary was this: We’re using technology the best if we employ it to track, to entertain and to provide feedback to our clients. But when it comes to coaching and education, we require humans to provide the help. I keep saying, you don’t learn to drive a car by email. And it’s the people in our clubs that make the difference. They’re the ones that are the great role models. They have the empathy. They have the eyes and the teeth and those beautiful smiles. They have the ears to listen. And then they have the expertise, they have their track record behind them. They’re able to light a candle for all the others who want to see.
So the third element then is having the right programs in place to deliver this retention improvement. So this programs are very much geared around making sure we establish where the client is now, where they want to be in the future. We take some benchmarks of their starting point. Individualize them a program. Perfect and fine tune that program. Help them do well outside the club with lifestyle choices like eating habits and then show them in a very timely manner that the results are worth the effort. And results aren’t just the physical look-at-me-now results. Best thing about our clubs is not how great our clients look, it’s how great they feel. So, we benchmark their mindset. We benchmark some physical measurements, and most importantly, we benchmark how they feel. We show them those improvements within the four to six-week period. Get them all excited about what they’ve achieved so far. And then keep mixing it up so they’ll never get bored or stuck in a rot.
And then finally, how to measure this? How to measure the uptake, making sure that we’ve got enough of that clients participating to actually influence our membership and have real retention goals achieved that we’re after. We talked about measuring the participation through the program; appointment show rates, graduation rates and then the kind of results that the clients were achieving. Now, I didn’t mention this but I want to make this very very important. When we get these results, we also seek permission from the clients to share it. These feeds your marketing. Being able to tell the world that you’re a club that actually delivers on their promise. And then going back to the people you report to. Maybe you’ve got a boss or the head office needs to know. Maybe you’re operating a leisure centre and you want to show the contract partners what you’ve achieved. Or maybe you just want to go back to the community that you serve and say, “Hey, this is why we’re here. Support us because we’re here to support you.” These are the final measures that show that all the time and energy in this when you put in your members is paying dividends and they should never ever go anywhere else but stay a member for life.
Chantal: Paul, the information you’ve shared over these past four weeks has been tremendously valuable. So, thank you so much for your time. Thank you for sharing your experience with the listeners of the show. If people want to chat with you further, if they would like to know more about Face2face retention, how should they contact you?
Paul: Well, I’d love to hear from the listeners out there on what they’re doing. Today I’ve shared some of my ideas over the last few weeks. You’ve been very kind to let me pour some of my thoughts. But I’m equally a student of retention as much as I’m a teacher. So, I would love to hear from other club operators out there. What are they doing well? Maybe even challenge some of the things I’ve said. I’d be open for that dialogue. So you know what? Email. Shoot me an email. I’ll give you my personal email address. Bit of a long one. email@example.com. Shoot me an email. Tell me what’s on your mind. I’d love to connect with you. I promise you one thing. I won’t be trying to sell you stuff. We’re kind of busy right now. But I’d love to make some more friends out there in the fitness industry.
Chantal: Paul, you’re an absolute legend. Thank you so much for your time once again.
And we will make sure we put your email address in the show notes for the Intensive Retention Series. Thank you once again, Mr. Retention Paul Brown!
Paul: Thank you Chantal and goodbye to you and all your listeners!
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