In my first report The Evolution of a Health Club Member: Survival of the Fittest Is NOT a Retention Strategy I make the point that not all members are created equal… some contribute to cash flow and some contribute to profitability.
Of course, cash flow is vital but if you are trying to grow your business you need to focus on those members that contribute most to the bottom line. Or in the alternative, you need to convert more of those cash flow members into more profitable long-term memberships.
Here’s the problem… you need to understand the difference and, in my experience, most owners and managers don’t.
If you have a growth strategy… your member acquisition activities will be targeted, they will incorporate one or more retention tactics, they will be measurable, and they will produce a predictable outcome.
If you have a cash grab… you will offer a significant discount, you will take all comers, you won’t have any specific retention tactics (apart from your “customer service”), and the outcome will be unpredictable.
Don’t get me wrong there is nothing wrong with generating cash flow from discounts and specials… just don’t expect to grow your business with them.
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