Survival of the Fittest
Little did Charles Darwin know when he posited his, then, highly controversial Theory of Evolution in the mid 1800’s (which eventually became widely known as the Survival of the Fittest) that his thinking would be critical to solving the seemingly intractable member retention crisis currently afflicting the health, fitness, and wellness industry.
The current state of retention
Member retention continues to be the most significant challenge for owners and managers. In fact former executive director of IHRSA John McCarthy recently made the astonishing admission that “…if a commercial club operation could sustain substantial profitability with attrition rates in the 35 percent to 45 percent range, so be it.” It says something when the guy in charge of the association responsible for advancing our industry concedes that retention rates in the 55 percent to 65 percent range may be as good as it gets.
Although I understand the obvious frustration behind Mr McCarthy’s comments I respectfully disagree with his assessment. Here’s why…
Not all health club members are created equal
Every health club has a range of expertise within its membership base. Historically, the range was relatively low given the largely homogenous population. That is, historically we had gyms that were populated with bodybuilders, strength trainers, athletes and bodybuilder/strength trainer/athlete wannabes. Members were highly motivated, well informed, self-reliant, and assumed responsibility for their own training. We’ll call them high-expertise members.
Industry efforts to broaden its markets over the last several decades have meant an infusion of members from outside the traditional high-expertise membership. These members included the deconditioned, the overweight and obese, families, babyboomers, and other special needs populations. These members are generally less motivated, poorly informed, highly dependent, and unable to assume responsibility for their own training. We’ll call them low-expertise members.
Member’s expertise evolves over time (following a predictable curve) from low to high. Understanding the member’s evolutionary process is critical to member acquisition and retention because high-expertise members are fundamentally different from low-expertise members. Their needs, expectations, and values are fundamentally different. Their health club experiences are fundamentally different. And their value (financial and otherwise) to the health club is fundamentally different.
Without accounting for member expertise any membership acquisition or retention strategy will produce mixed results (at best).
How member-expertise contributes to business value
Just as all members are not created equal, not all members contribute equal value to a business. High-expertise members pay more (don’t seek discounts), stay members longer, spend more on ancillaries, refer more members, assist other members more effectively and more often and consume fewer club resources (staff time, program cards, stationary).
Low-expertise members pay less (seek discounts), drop out early, don’t spend on ancillaries, don’t refer other members, rarely assist other members and consume more club resources.
Survival of the Fittest Is NOT a retention strategy
When all else fails… survival of the fittest prevails. Owners and managers that fail to adequately account for their member’s evolutionary process force their members to rely on their own survival instincts. Unfortunately, we know that low-expertise members have poorly developed survival instincts and left to their own devices extinction is the most likely outcome (some research indicates that as many as 42% of new members drop out within the first 30 days of joining).
The missing link
Member expertise is the missing link that retention (and acquisition) strategies have ignored. Without fully understanding your members’ evolutionary process member acquisition and retention will continue to be a significant and ongoing challenge. However, those businesses that can leverage their understanding of their members’ evolutionary process will have a significant competitive advantage in an increasingly competitive marketplace.
OK enough of the sales pitch… Download the Full Report (it’s FREE) read it, share it with your team, and start thinking in terms of your members’ evolutionary process.
Please feel free to contact me at accessfit@iprimus.com.au or through the Access FIT blog with questions, comments, critical analysis, and feedback (positive and negative). The ideas presented here will continue to evolve over time and, as they do, this publication will be periodically updated to reflect those developments.
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