“There is a club chain, which is a public company, that is budgeting a 35% attrition rate for 2010. The reality is they had 613,882 members at the end of Q’1 2010. At a budgeted attrition rate of 35%, they will lose 214,858 members this year. “ How is this for reality?

Customer retention, (lets not pretend it’s only a Health Club issue by calling it Member retention) is a world wide problem. Our Industry is still young compared to others, yet there is very little reflection on lessons learned in other Industries. Even the younger boom business of mobile phones can teach us some valuable lessons to help tackle the issue. One fundamental issue for me that is a sticking point, is the actual method of measurement of Retention (or survival if you prefer).

Commonly IHRSA back in the 90’s used Attrition as a measurement; the UK market used their figures as a yardstick. Then along came the FIA ‘Winning the Retention Battle’ series of reports, which now gave us the alternative ‘retention rate’ based on length of membership survival and plotting the point of dropout within the 12 months form joining.

All manner of influences were investigated through the series (Joining fees/contracts/First month visit pattern etc) however it appeared that very few operators had the ability to formulate their own data to produce a ‘like for like’ comparison, as a result many operators, still to this day, revert to the default Attrition report, which produces a different picture in my opinion, almost like comparing a bank statement to a cashflow analysis. Why is it so difficult to get a retention report from a very expensive management software programme? You tell me! Maybe its time that software systems carried an FIA endorsement ‘this software will give you retention rates’.

 For us to move the Industry forward on the issue of retention, two simple data elements are required , start date(membership starts) & end date of membership (DD payment stops), from there basic retention is possible, (it can even be done in a manual ledger!), yet a combination of operators not asking for these two fields to be configured on their systems or the software not being capable of showing this info, has led to almost a generation of attrition reliance and failure to tackle to retention influences. Before retention can be addressed effectively it needs an established standard protocol for measurement, then we can benchmark each other. After all I have see operators who think all is well, then they see a rivals figures and all of a sudden the realize they have more to learn. Of course the opposite is also true in that some beat themselves up, without realizing they are actually in the top 5% of retention rates across the country.

Over the coming months I will be leading workshops that will look at constructing a business model that places retention at its heart, with bonuses and reward linked specifically to survival rather than churn.  I hope you will be involved!

• Tweet this
• Follow this posts comments
• Tell a friend

I wonder how the Olympic legacy will deliver lasting habit change for our inactive and dissafected population? The legacy will not be measured in buildings or facilities, it is about the culture of activity and particiaption that we need. For my generation you didn’t need a purpose built 5-a-side court floodlit until 2200hrs – the council gave us street lights til 0600hrs and enough cul de sacs,estate walls to play around and a park around the corner. If we are suddenly struggling to get our kids active, dont blame facilities, there are more of them now than we had. The rise of video games, DVD’s and fast food outlets, has to be the biggest challenge.

If the rise in participation is to be maintained beyond the Olympic fanfare of the closing ceremony, what will need to be done? Dare I suggest providing an integrated approach to adult health education for the current teenage/under 21’s who will be the next generation of parents and role models to their children? If the children go home to a negative environment how will they break the mould set by their parents?

I see some great initiatives, but I dont see much change in the parents in the low income/low education brackets. Will anyone vote on the basis of a Health & Wellbeing agenda?

• Tweet this
• Follow this posts comments
• Tell a friend