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Transcription – Show 115 Fitness Business Intensive Paul Brown on Retention 1 of 4

Chantal:   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.

During each show, you will receive practical tips and actions to implement in your fitness business. Our first topic for the FBP intensives is retention and our special guest is Mr. Retention himself, Paul Brown.

Paul is known for his groundbreaking work on member retention, exercise adherence and membership growth. He’s the creator of the Face 2 Face retention systems, which are the standard operating procedure for several of the world’s most prestigious health club groups with many millions of success stories to date and growing rapidly.

Paul, welcome to the series and thank you so much for coming on as our special guest to share your expertise on retention.

Paul: Thank you Chantal, I’m delighted to join you today.

Chantal:  Paul, tell us, what are our four focus areas that we’ll be looking at over the next four weeks.

Paul:  Okay, I thought for a start, we might go for what matters the most. I’m sure your listeners just want to work out immediately what’s the biggest challenge is that I’m facing or what areas can I adapt immediately.

Then from there, we’ll look at some of the current trends and traditions that have worked for us in the past. Try to see if there is a happy medium so we can enjoy both what’s modern and also what’s worked historically.  And I thought we might look at retention as an optional program. Not only on membership due based businesses but businesses that look at secondary spend options and how can they increase or retain those clients for longer and the last but not the least, the measures of success. How the clients and the clubs out there understand what’s working and what’s not. What are the Key Performance Indicators that can motivate them and their team to stay on track.

Chantal: Okay, so let’s dive straight into what matters the most. Can you tell us, what is the single most crucial factor to retaining a client?

Paul: I might actually divide that into two if you don’t mind Chantal. I think number one; it is very well known that convenience matters. People don’t drive past a good club to get to a great club. We all got that little radius of accessibility and if you are on a convenient location that ticks most of the boxes for a client, they’re going to stick around longer.

Second thing I believe is relationships. While convenience matters, if they don’t have a relationship with you, they’ll eventually feel no loyalty to stay, when an alternative or more convenient location comes along. So, yes, you’ve got to be handy to them, but you got to have connectivity with those clients for them to stick around.

Chantal: So Paul, how would you define Member Retention?

Paul:  It is pretty straightforward. There are five key ingredients I believe to any product, whether you are a health and fitness club or whether you are selling breakfast cereal.

Number one, people have to want what you offer. You’ll have to want health and fitness. They have to want to do what it is you sell.

Number two, you’ve got to understand how they do it properly. And therefore, most enjoy doing it. If they don’t get it or it is uncomfortable, they’re going to repel.

Number three, they have to do it often enough to justify the price. When we talk about price and fitness memberships, it really comes down to value. Do you use it often enough? If I work out in a club once a month, the charges me 60 bucks a month. That is a $60 workout. But if I am there three days a week, clearly the value is generated much higher. So, third one is, got to use it often.

The fourth one is they have to see that it’s working. They have to see the benefits. And many of the benefits in health and fitness aren’t necessarily visible. We have a saying, “The best thing about our clubs isn’t how great you look, but how great you feel.” And people need to qualify that. They need to see the before and after and recognize those differences.

And then the fifth one, all those things are available in a number of locations and in a number of sources, They’re got to want it from you. They are going to have to want a connectivity with you and your brand. They’ve got a love the experience of being there. They’ve got to trust you. And they’re going to say, I know I have choices but you are my number one choice. And I believe friends don’t leave friends. So, if you can get that relationship going, that is the underlying result

Chantal: Paul, in your experience, where do you think do health and fitness actually go wrong?

Paul: Oh boy! That’s a very very big question Chantal. It’s not for me to criticize other business. Clubs got to define what their own model is. Some of the models out there that are very profitable and very successful simply aren’t designed to retain clients.

They’re designed for volume, they’re designed for low yield but a high volume and they can suffer some degree of turnover and survive that quite well. So, I wouldn’t sit here and criticize them and say, they’ve got it wrong. But for the businesses who believe that they want and need to retain their clients, there a membership-based businesses, they yield from those members are worth protecting and the cost of acquisition is too high to constantly churning out clients. In that situation, I just don’t believe to this day, clubs take retention seriously. I believe they put the same amount effort into their facilities, sales and marketing. They put a lot of it into those areas but then they give retention lip service.

I believe the number one measure clubs should do is they should recognize the long term value of the customer, and then find out why they quit. Most business don’t understand why their clients quit or they find out too late. You should be able to identify the needs of these customers early on. And then offset any roadblocks they might come up against. So again, number one, “Is your business the kind of business that needs to take retention seriously?” And if so, take it seriously.

Chantal: Okay Paul, so how about we have a look at this. Do you think you could actually quantify for us the parameters of the business that would most benefit with a focus on client retention?

Paul: Yeah, absolutely. Again, if we look at the yield per customer, I hate about talking to customers as dollar values or points or units. For me, every member matters. Every member matters, whether they are concession member, paying the most discounted rate that you offer, whether they won a prize on a local fair or whether they want to pay you top dollar. Every member matters. But if you are going to quantify, which clubs will matter the most from a retention point of view. It is where there is longevity. You can have a business that has a very high turnover because people are students or you are in a very mobile population. And at the end of the day, we’ve got people who work or live near you, they have no need to go elsewhere, you’ve got to go out of your way to keep those customers long term.

Certainly, there’s a dollar yield per client, number one. Then you should also look at the reputation value and is looking after a customer is going to give you the kind of word-of-mouth reputation value that means your marketing spend can be lessened because your reputation and itself is how you attract more clients. And then the third thing to factor is the pride factor of staff if you’ve got a product that our staff is proud of, if your employees, if your team go to work everyday believing they’re making a difference, they’re much more likely to pass on that belief to their clients. Again, if you have staff, number one, if you model with that staff, you probably don’t belong to this conversation or if you’re going to model like you just don’t care how long people stay. again, not an issue. But if you are a people business, and membership matters, retention matters.

Chantal: So, keeping that in mind Paul, how would you actually go about identifying who it is in your membership base that needs that sort of approach and I guess who doesn’t?

Paul: Very good. And not everybody does. Let’s be fair. There are some clients who are going to be totally independent. They survived whatever induction journey the fitness industry has offered them in the past, they’re self starters. They’re the kind of people who learned to drive on their own or pick up a guitar and learn from their own. Fitness may come naturally to them.

We have a model in our process that identify six key areas to address whether the client has a need or not.

The first one is what we call confidence.  Does someone have the ability to walk in to any fitness environment and just go at it without any intimidation, without needing any support or help.

Number two is habit, do they already have any regular exercise routine? That means working out almost as often as often as you brush your teeth. Most days of the week. If you’ve got that in place, maybe you don’t need our help in that area.

The third one is enjoyment. There’s a risk that even the most longest and experienced fitness person can run out of ideas and get bored and stuck in a rut. So, do they enjoy? Do they like doing it? Are they someone who gravitates towards activity? Or are they more likely to sit back and watch others have all the fun?

The fourth one is challenge. Do they know how to safely challenge themselves to push to get the results that they’re after? Not so hard that they run the risk of injury or exertion, but certainly not taking it so easy, that the body suffers no adaptation.

Then the fifth one is knowledge. How well do they understand what to do, how to do, why to do it? A lot of people walk in to our clubs acting as if they know what they’re doing, but when you dig a little bit deeper, their understanding is either archaic or quite frankly, insufficient

And the last but not the least, there’s a social element to it. Do people feel comfortable when they come in to a club? Do they feel that they belong there? So, our model is, we identify these six things. We profile every single client coming to our doors and our clubs to establish where they are on those six levels. And anybody who scores a certain number, we’ve got a tipping point of four out of five,anything below that, we feel that we have an obligation to intervene and help that person, so that they can become just like you and I, addicted to fitness because they recognize, love it, and they wouldn’t go anywhere else.

Chantal: So, with that CHECKS model that you’ve just taken us through, how do you go from the model on the outline to then executing a plan to actually match each of those needs that you’ve just taken us through?

Paul: Excellent. And again, a very detailed answer. But if I summarize it very quickly, at that CHECKS model, if we’ve got someone who’s very high on all those six areas, they may be simply, “You’re good to go.”  They want to train independently. We don’t get in their way. Because we don’t want to upset them by forcing them to be hand-held. But then, when we identify any those of those six areas that do need assistance, we can map out a plan for them. If we’ve already got a relatively systematized induction journey that most of our clients go through, we are able to then streamline and tailor that. Some might go all the way through. Some might take partial of it. We also have to establish where the group exercise is an appropriate model or whether need more the convenience of being able to come in and work out on a gym floor independently. And then, you have your high-need clients or the clients that you don’t really have to think too much for themselves, perfect for the personal training environment. So, they are the ones we’d introduce to our PT or our boot camps or to our group training programs that are actually structured coaching zone area.

So, the short answer is; the prescription, the plan is we’ve got to understand their needs first, we make a recommendation, nine times out of ten, they accept our recommendation. Most of the time, that’s included in the membership. So, the decision to participate is not a financial one. We’re investing in them, so that we can make them that kind of client who would never want to leave and that get’s returned back to us in multiples.

Chantal: Well, today is all about really setting the scene for our four-part series with our focus on retention. So, do you want to tell us a little bit more about what can we expect to learn in the next three installments of let’s call it, Retention Rules with Paul Brown, Mr. Retention.

Paul: Sure. Thank you. I thought we’d discuss next is the current trends. Everyone is always looking at what’s new or what’s next. And then look historically what we’ve done. I believe if we looked back at the fitness industry, you’ll see, there’s been lots of great ideas that have come and gone. And there’s been lots of ideas that seemed like a great idea at the time and they failed. As I listen to many of your podcasts over the last 200 or so podcasts, some of your best presenters have all said the same thing. Many of their greatest lessons have come from failure. I think, we can look historically what the fitness industry would learn from those success and failures and we’ll see how it makes the most of the current trends. There are some practices in the fitness industry right now that I personally believe are doomed to fail also but they are right now, widely popular. I am happy to stand up and swim against the crowd and say, here’s my view, take it or leave it but that’s what I predict the future will look like. So trends and traditions. Then the second one there is going to be going back to the optional programs. I challenge the fitness industries current addiction to personal training as an on-boarding option. And I want to talk about why connecting one member with one individual person and making that person the singular link they have at the club, I want to explore why that might be…wreak with some challenges. There are some benefits, no argument. And there are some trainers out there doing some amazing work.

I just really believe that we can leverage their skills better. And I believe there’s a better way of exposing multiple personalities to individuals, so they are able to find the compatible partner to take them through their fitness journey.

And I want to help businesses out there increase their yield per client, be successful at selling secondary products, but not let that get in the way of their primary core revenue source of memberships. And then the last but not the least, going back to the measures of success, I can give you some KPIs of today’s activities that can predict tomorrows outcome. If you look at a member retention of a client, you can trace back how long they’ve stayed, and how happy they were right back to what happened to them early on. I’ve been saying this for 21 years and it hasn’t changed in all those years. I can show you specific numbers of things that are happening out our club today that can predict what will happen two years from now with that client or maybe three years’ weeks from now with that client. So, I’d love to share some of those measures of success and have your listeners out there enjoy more rewards themselves.

TAKE-AWAY ACTIONS WEEK ONE

 

1)  Ask your staff why they think members are not coming back and why they aren’t doing the programs that they have been given.

 

2)  Study the lifespan of each and every membership, look at the day the member joined and look at the day they left, and then look at the last visit they had before they cancelled.

 

*Paul predicts there is a five-month typical tipping point. Ie: Five months after the average person joins is when they completely stop using your club and found a way to cancel that membership even if they’ve got a contract.

NEXT EPISODE:  TRENDS AND TRADITIONS

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