Top 10 Retention Strategies to Avoid
We are proud to welcome Dr. Paul Bedford, also known as the fitness industry’s very own Retention Guru, to our FitNation webinar to discuss the top 10 retention strategies to avoid. Paul is a researcher, international speaker, and fitness industry expert on retention, attrition, and customer experience. A regular face at the world-famous IHRSA conventions and many others, it promises to be an exciting and informative episode!
Watch the full episode here:
Alex von Hagen: Welcome everybody. Thank you for taking the time to join us for another FitNation Lunch and Learn. The weather is getting warmer, at least where I’m at here. So hopefully some of our listeners are also tuning in during a walk or maybe just enjoying some sunshine. Recently, we’ve been privileged to have several guests from the UK join us. Today’s session is with someone who doesn’t need any introduction either inside the UK or out of it. That would be Dr. Paul Bedford.
Paul is the driving force at the Retention Guru. He’s a researcher and international speaker, a fitness industry expert on retention, attrition, and customer experience. In today’s session, what we’re going to focus on is Paul’s 10 retention tips and myths, how retention strategies have changed in the past year, and of course, how operators can adapt to that. And then also how operator actions will influence member reactions. Retention, of course, it’s always been a top priority in the fitness industry and these days it’s even more critical in today’s environment. So I think there’s going to be some very actionable insights from today’s conversation. Without further ado, Dr. Paul Bedford, thank you for taking the time to join us.
Dr. Paul Bedford: Oh, you’re welcome Alex. I’m the same as you. The weather has changed and the sun is out and I’m in my office with all the doors and windows shut to try and minimize noise. Now I’m at that point where I’ve got my paper towel next to me to dab my forehead because the room’s getting hotter and hotter. But we’ll be fine. It’s just nice to have some decent weather.
Alex: Yes, exactly. And for any of our listeners who decide to listen back to this in January or February of 2022, we’re sorry but hopefully, most people will be listening to this when the sun is shining and they’re happy. So yeah, Paul always a good opportunity when we start one of these up for those who don’t know, you, maybe we could give us some background on what you do and who you are.
Skip ahead to
Paul: Okay. So I’ve now been in the fitness industry for 30 years, and I started as a gym instructor working at my local YMCA, and then I’ve worked through that process all the way up to fitness manager. I’ve run a PT business. I spent a very long time actually training people to be personal trainers and group exercise teachers and so on more than 10 years. And I trained over 3000 personal trainers and a lot of people don’t recognize that in my background. They know me from the work that we do academically within the business. But there was a point where I just changed focus. I want to study more academically; I want to understand what drives people’s behaviors within health clubs. And I went off and I did a Master’s in Exercise Psychology, another one in Research Science, and ended up doing my Ph.D. focusing on how you keep people exercising using the onboarding process.
My business has just expanded since then slowly at first with small independent operators and now I work with some of the largest international chains in the world. While I continue to work independently, it’s a really nice sort of juxtaposition. Sometimes I’m working within a business and the only person in the business is the manager, the owner. They’re also front of house and the trainer, and other times there’s a department for each one of those. We do a lot of analysis, a lot of data analysis to try and get a better understanding. So our decisions are made based on data rather than just gut feeling.
Alex: Okay. Yeah. And so, yeah, as far as Retention Guru, you already talked about it a little bit there and I know due to the nature of what you guys do, you can’t talk about who you’re working with specifically. Maybe you can, yeah.
Paul: Some I can. Yeah. I can look back on previous clients and some of the stuff we’ve done with them.
Paul: Yeah, you’re right. They’re all clients who just go, “You’re going to sign a non-disclosure agreement. You’re not going to be able to tell anybody you’re working with us because we don’t want people to know you’re working with us.” Because sometimes that’s seen as a failure by their board or by external people that if they got me to come in and help them, then oh, there must be problems. Well, as far as I’ve seen within the industry, pretty much everybody needs some improvement in their retention. It’s just whether people are bold enough to go, “Actually we can’t do this on our own. We need some support.”
Alex: Yeah. Yeah. Okay. And I think that’s a really good one to keep in mind, but yeah, it’s not that you’re needing help and you’re desperate. It’s actually that you’re focusing on making the business better and consulting the resources with someone very qualified to do that. I don’t see anything wrong with that.
Alex: Okay. So obviously we’re going to spend a fair amount of time talking about retention today. Retention, topics, strategies, operator actions. Throughout this conversation, we’ll come across a lot of these top 10 that we’ve talked about and I think will highlight and drill down on some of those points where necessary. We all know what retention is. I think anyone working in the industry is familiar with this and what it means. Outside of the literal definition of what retention means, how do you think about it and how do you think gyms or any operator in the fitness industry should think about retention?
How do you think about retention in the fitness industry?
Paul: So for me, there are two ways I think about it. One is it’s about how well we support our members. Now, not all members are going to need as much support as others. Some are going to just need the doors open and enough equipment, and then they’re going to use it and leave. Others, they’re completely new to the environment that we’re so familiar with. So what we see as being an everyday activity for them is completely new, it’s novel and sometimes it’s overwhelming. So for me, it’s about managing that experience because I think if you’ve managed the experience well over time, people stay longer. They’re having a better experience. I also see it because it’s the way I have to see it for a lot of operators as a way of driving revenue. You know, a lot of operators, I did a piece recently for an operator where we compared how many personal training sessions they would have to sell relative to increasing the average length of stay by one month and they need just to sell an extra 500 PT sessions per site, per week to equal the revenue generated by one extra month. And it’s like, first of all, can you even find those trainers? Then you have the capacity in the building to actually deliver it. So for me, it’s about revenue generation without it just being purely focused on sales.
Alex: Okay. Yeah, I think the more people start to think about that rather than just keeping a member making sure that people don’t cancel, it’s the bigger picture there. I think that’s where they can start to realize the other opportunities that are there for them. And I think people they’ve heard, there are always common retention topics coming up. Maybe a good starting point for us would say, do you see operators may be losing touch with some of the basics in terms of tried and true retention strategies?
Are operators losing touch with tried and true retention strategies?
Paul: I think sometimes yeah and I think some of it is technology-driven. And I don’t mean that to be, I think it’s because people are going, “Oh, I wonder if we can solve that with technology. I wonder if we can solve that with technology.” I know one of the areas that we’re planning to talk about is personalization and things, but there’s nothing more personal than a person-to-person conversation because you can hear the nuances in someone’s voice. You can hear the pauses and you can’t get that at the moment through tech. And you know, for me, when I’m working with operators, I’m going, “Look, if you’re a smaller business, if you’ve got a problem with retention and you’re a small business, actually you’ve got a problem with your whole business because, at the smallest scale, it shouldn’t be an issue.
Whereas you start to scale beyond a thousand members or multiple sites, you then have to put practices into place because not everybody in the business is as passionate. So often what I see is there’s a loss of focus on helping the customer achieve what the customer wants out of a relationship and it is too one-sided. It all being only about revenue generation and additional revenue generation. So those will be the initial bits. Operators just losing track of asking what their customers want or even focusing on what their customers want.
Alex: Yeah. Okay. You are correct. We’re going to look at personalization a little bit later in the conversation. I think that is a point that probably a lot of people will look over is personal contact is probably the biggest form of personalization. There’s a big difference between someone at the front desk knowing your front name versus the app knowing your first name. Right.
Paul: Yeah. No, definitely.
Alex: Okay. Yep. And on that same thread of conversation, going back to the basics, I mean, do you think there are some common retention strategies that operators really believe in that actually don’t move the needle or don’t have an impact or at least as big of an impact let’s say?
Common Retention Strategies That Don’t Have an Impact
Paul: I think what a lot of operators do is they focus on the period of time when people have indicated they want to leave or already trying to leave, and then they try and save them and they put time and effort. It’s less common now, but there used to be a huge practice of calling everybody who’s left and see if you can get them back, which, when I look at that, you can have an impact on that. The best we’ve seen is about 20% recovery from that group. But it’s a so destroying activity for staff calling people that have already left. So I refer to it, as I say, you have to do, what’s called, I call it upstream thinking rather than worrying about them, going down a river and going over a waterfall and you’re trying to save them once they’ve gone over the waterfall. Be upstream and stop them from going in the river in the first place. So the focus is generally on when they leave, not how do I keep them?
This is a slightly different context and I first started thinking about it because when I was studying academically, we were posed the question, do you study obese people and look at their behavior to try and cure obesity? Or do you study thin people and observe their behavior and then try and teach that behavior to obese people. And it’s like, oh, because changing one group of behavior is very different from adopting some else’s behavior. And so for me, it’s like looking at this and going, okay the last resort should be calling people. But it shouldn’t be the first and only thing you do and I think a lot of operators for a long time focused on that. And I think the other one they’ve focused on particularly in their business has been it’s okay to let people go to sleep because if they go to sleep, at least we’re getting income from them. And we pretty much see in the data analysis we do, yes, you get income from them. But actually, if those people visited just a minimal time, like once a week they’d stay even longer as a member, than if you let them sleep. So you actually generate more money from them. So, it was don’t call the sleepers because you’ll wake them up. Well, some of them you should not let go to sleep in the first place, and the others, why not try waking up a proportion of them. But the [unclear 13:49] of if they’ve not been in for 30 days, don’t talk to them. But it’s just not an approach I subscribe to anymore.
Alex: Yeah. Well, it sounds like it’s really addressing it at the root cause not once the action has already happened or, you know, fix the foundation, not the crack in the drywall if you will.
Paul: That’s it.
Alex: So yeah, I agree with that like try and get ahead of the curve, understand why they’re leaving in the first place. Not trying to win them back after the decision may be in their minds has already been made and either to move on or just cancel altogether.
Paul: The thing is Alex with data what you can do is you can plot when people are most likely to quit. If you see that on like the sort of charts we use, you can see this uplifting a curve and you can go, “Okay. So there’s a bigger proportion of people leaving after four months, than those who leave after three or after five. What do we need to do then? If they go at the end of month four, what do we need to do in months two and three to flatten that curve back down? Whereas most people aren’t looking at their data in that depth. They’re just going, “They’ve left. What do we do?”
Alex: Let’s try and win them back.
Is personalization underutilized in the fitness industry?
Alex: Okay. Got you. And personalization in the fitness industry, outside of just someone knowing your first name at the front desk whether it’s technology or whether it’s any form to create a more personalized experience, do you think this is underutilized in the fitness industry? Like how do you see this?
Paul: I think it’s massively underutilized and I think of the human to human level, there’s a lot more we can do even without knowing someone’s name. Just being curious about somebody gives a sense of actually it’s personal for them. It might not be personal for you, but it feels personal for them. So if I’m saying to someone, “What are you doing in your workout today? How did you enjoy your class today? What did you think about the PT session you’ve just had?” That feels personal because I’m talking about them and their current experience. And you can do that without even having to know people’s names.
Paul: So I think when people think personalized, they often think, “Oh, have I got to know everybody’s name?” Well, it’ll be ideal if you did. It’s a challenge to do that. But actually, I can make an experience personal just by being curious about the other person. So I think of that. I think there’s some interesting summary. I think it came out of Harvard a few weeks ago when they were reviewing data and there were two groups of people who were getting information and something where it was really hyper-personalized to an individual, people were saying, actually that they felt uncomfortable with that. They preferred a bit more general. I know in the work where I’ve looked at communications, we’ve looked at it being more conversational communication, even if it’s not hyper-personalized. So it sounds more like I’m talking to you rather than I’m going, “Hi Alex”. And using your name is like, while I’m having the conversation, I said, “So how was your workout? When are we going to see each other again?” That feels personalized where it doesn’t actually have to be the individual’s name. And there’s a real, I think we can really do a lot with that because actually, that’s a lot less challenging than actually making sure the right content, the exact right content. I think that is what carries us. Right time, right place, right content. Getting that tuned in really does require decent technology.
Alex: Yeah. Okay. And you brought up something and we’ve talked about this in one of our calls leading into this webinar was just about how a lot of gyms are either reopening. They’ve recently reopened. What are some good strategies in order to welcome someone back into their club? I’ll share my own experience on this one after this, but maybe you could provide some tips on some good practices you see operators doing or what you would think to do.
Good Strategies to Welcome Someone Back into the Club
Paul: The one that, something I’ve been recommending for a little while now is what I refer to as the Nando’s approach. So, in the UK, we have a restaurant chain called Nando’s. I think it was originally South Africa. Basically, it’s a chicken restaurant and they have a slightly unique way of serving you. So when you come into the restaurant, they greet you. They walk you to a table. They give you a table number. They give you menus. You then decide what you want but then you have to get up from the table, walk up to the cash registers, order your food, pay for your food, and then sit down. They will then deliver your food to the table. Now because of that, because they walk you to the table, people often, if they don’t pay attention, think, well, actually someone’s going to serve me or take my order at the table and they sit and they wait and they wait. And that was a problem for Nando’s.
So what they do is they have a standard introduction and I think it works really, really well because you walk in and they go, “Hi, welcome to Nando’s. Have you been to a Nando’s before?” If you say no, they go, “Okay, then just be aware. We’ll walk you to the table. We’ll give you the menus. We’ll take your table number. You choose your food.” And they talk you through the process, so you know what to do. So you’re not left sitting there like an idiot. If you walk in and they go, “Welcome to Nando’s, have you been to a Nando’s before?” And you go, “Yes.” They go, “Welcome back. Just to remind you.” And they talk you through the same process.
And one of the things I’ve been saying to clients that I work with, and some of the operators that have got in touch with me is why don’t you go welcome back to people when they come through the door and then say to them, have you been back in since we’ve opened. If you haven’t, here are our rules, regulations, and the things we need you to follow. If you have, then you’ll know we need you to do this. And you can also say to them at that point as well, and just be aware that based on previous experience, these rules might change. So don’t be surprised if we have to keep updating you every time you come in. Then it allows you to talk to every customer. We know from our research, the interactions with customers’ drive visits. It also starts to build that sense of actually someone cares about the experience I’m having in here. And so that’s something I’ve been recommending recently is, you know, greet everybody that comes in. Have you been in since we’ve reopened? Yes. Have you been in since we’ve reopened? No. It’s the same response after that but it gives them a sense of actually, I’m glad to see you back.
Now, if like me, I went back on the first day that they reopened, then there’s a slight difference there. Welcome back. They know you haven’t been in. Let me just update you on what you’ve got to do. It’s great to see you. I think that should be minimum. Personally, I think it should be the highest member of staff you can put in front of somebody. So if you can put the general manager in front of people. If you can put the deputy manager. Whoever, the highest member of staff is, you should put them in front because it gives it more kudos the higher up the person is.
Alex: Yeah. I agree with every single thing you said and from my personal experience here in the Netherlands, we opened, our gyms reopened on May 17th. Yeah. I go to a gym that I think everybody, I’m not going to name them by name publicly, but everyone in Europe knows who they are. It’s a well-recognized brand. I’m not trying to build myself up here, but like you, I was one of the first members back on the first day, right. The morning session, ready to get back into the gym and also doing what I do, I kind of take more notice of these things, how they interact? What the experience is like? I was there, I showed up, they asked for my name to make sure I was on the registration list for that day because we have to book our spot and that was it. There was no welcome back. There was no, “Hey, we’re glad to see you.” And I’m not a precious person. I don’t need to be celebrated. It wasn’t, you know, “Hey, great job.” Pat on the back. “Alex, you’re back into our gym.” But some recognition of what we’ve all been through. Some happiness that they were back open would have been at least appreciated. And for me, I was like, this is it. You guys have been working so hard to reopen and you don’t even seem like we’re happy to be back. That’s interesting.
Paul: Yeah. Personally, I think it’s shameful. They want your custom. They’ll probably boast about how well they’ve done in reopening, but they’re probably not able to say how their customers feel about the way they were welcomed back.
Alex: From my side, I almost feel a little bit like damn it because I’m not going anywhere, right. It is my gym. I like the gym. It’s one close to my house. It’s not really going to be something that makes me cancel my membership, but it was just more of this thing of, okay, are we really happy to be back? Are you just happy to turn my direct debit back on? I’m not sure.
Paul: Yeah. And I think what’s even more disappointing for me is they had your name. They have your name. They have you booked.
Paul: There were so many questions you could bounce off of that in terms of was this the time you wanted to try and great to see you back. Do you realize how long you’ve got before we’ve got to ask you to get out? Even make a joke of it. You’re like, “Don’t stand around here talking to me.” [Crosstalk 23:47]. All of those things make you feel valued. And that goes back to that comment I made about retention. It’s about how well we look after our customers. Now it might not be something that makes you cancel, but it might not be something that makes you recommend someone else.
Alex: That’s it. Yeah.
Paul: And it’s those little nuances which we have to focus on. Yeah, okay.
Alex: We could go on. We could go on for a long time I think about that one. Yeah. It’s it really is about are you paying them just for access to a facility or are you part of a club?
Paul: Yeah. And for me, I worked with some operators where it is they say our business is an access model. It is an access model. What can we do to improve retention? Well, the strategies we do there are different from the ones you do. Well, they go, “Well, actually we want to be called a club and we want people to feel like they’re members of a club.” And we go, “Okay, then you need to do this.” There’s like a threshold of his money in exchange for access and his money in exchange for I’m feeling part of something. And yours sounds like an exchange for access.
Alex: Yeah. When they are billing themselves as a club. So yeah, there you go. Not to deviate too far, well I think it actually could be important for the topic of retention. We talked about this as well, booking spaces for the gym. Is this a model that you think could actually stick around even when COVID restrictions aren’t in place?
Could the model of booking spaces at the gym remain after COVID-19 restrictions are lifted?
Paul: I do. And the reason I know we discussed it briefly in the lead into this session today, but I’ve had several operators contact me here in the UK and one in Europe. So when we reopened, we were actually thinking like some of the operators I work with have to apply restrictions because of the size of their facilities. So they’re saying we can only have 30 people per hour or 50 people per hour. And during previous lockdowns where they had to have these restrictions, what they found was people booked their appointments and turned up and worked out and then left and seemed really pleased that they’d got everything they wanted to get done in the time. So some of the operators have come back to me and saying, actually, “Can you run us some analysis on if we kept this going, would people, you know, is it a model we can retain?”
And my first question to them is, are you financially secure if you run that model? Because some businesses are designed to have 10,000 members, but only 500 visits per day and they don’t want people visiting because the scaling doesn’t work. And they’ve come back and they go naturally, “Yeah, we can.” And so they’re saying, for the time being, they’re going to keep their appointment basis in. Now, when I look through, we have what we call our Top 10 Retention Factors and the first three are visit, interaction, and programming. Visit is the most important because if they don’t visit, they won’t stay. Even if they go asleep, they don’t visit, they won’t stay. At some point, they’ll quit. But actually, we found with some of the analysis we’ve done is the people who train on the same day, same time, or even book an appointment, exercises longer than people who train on a more ad-hoc basis.
Paul: Now I know myself, the gym where I’m currently training, I don’t have to book, but I do tend to turn up on the same day, same time with my training partner and we work out. And if they said you’ve got an hour, we’d get it done in an hour and out. But yeah, there are operators that are looking at that and some of them are fairly large operators because the feedback they’re getting from customers is actually if I book an appointment, I feel like I’ve got a turn-up. If I book an appointment, actually once it’s in my schedule for the day, the week, I can share that with other people, and then they don’t try and book things over the top. They work around it. Also if I book an appointment and it’s a limited number in there, actually, it feels like I’ve got more for my money because there are less people in there when I’m training. I can train more efficiently because I’m not having to wait for equipment. And actually, I feel like I’m getting a better experience.
Then the operators have said, actually when doing it that format, we can staff it according to bookings and so we can always have someone there to greet them. We can have another member of staff who’s on the gym floor cleaning, or just helping out doing onboarding. But actually allows us to manage our business more effectively. When I was discussing this with other people, it’s like, if I want to go to the cinema, it’s a set time and thing or at the moment, I’ve got to book that as well. I think there’s a lot of people who are happy to make booked appointments. There’ll be equally as many people who go, “No, I want to go when I want to go.” And then I think you’ve got two separate models.
Alex: Yeah, yeah. Yeah. The operators who know that they can adapt that like, can you afford to do it basically if they have good feedback from their members. I think it’d be an interesting one to see if that actually does stick around for the long term. Again, personally, for me, you know, we have to book our spots in the gym right now. I actually quite like it. I think I’m going to the gym more often. Yeah, I have that appointment. You know, there are booking appointments from group classes and there are also booking penalties for group classes. Now it’s been applied to my gym spot. So if I book a busy spot and then I cancel late, I get three strikes. So I think there is a lot more accountability there in getting you to the gym, which ultimately I go no [unclear 29:34].
Paul: I think the one thing that’s going to shape whether that continues is add more general working conditions because I think people can be more, what we’ve seen in our data is people are more flexible in the days and times that they train because they are working from home or only having to commute certain days of the week. And so other days they go actually, “I’ll get my training at 8:00 am because I need to be back at home for nine [unclear 30:02] my workday. So I think it’s the overall working environment will potentially determine whether those models are sustainable.
Alex: Okay. Yeah. As far as we’ve talked a little bit about responses for people coming back, but what would you say in your opinion was the fitness industry’s response to COVID? I mean, was it good? What opportunities were missed? I’d be interested to hear your feedback here.
Paul’s Opinion on the Fitness Industry’s COVID-19 Response
Paul: I think there’s no one thing and I think the industry loves it when we can go, “The one thing that we all came out of this is and it’s like.” There is no one, someone asked me recently to do analysis about reopening, which I’ve done across multiple countries. Even those have got different restrictions in different countries. So you can’t say, oh, they did well and they didn’t because some can have six people in group exercise, some can have 18. So you’ve got that. Things I think the fitness industry did well. First of all, I think people recognize that people go to the gym for more than just fitness, their mental health as well and that going to the gym had a much bigger value than just the I lift weights. I do a class. I do some cardio. It’s more than that. And I think that’s something that the industry needs to capitalize on. It made a big play, but so did almost every other industry, that’s more leisure time, it’s good for your mental health. It was almost like every end of the sentence was oh they need to open bars and restaurants not just because we want to go out and socialize, but it’s also good for your mental health. We need to open gyms because it’s good for…We need to open cinemas.
And I do think it is good for people’s mental health, but we need to capture that data and evidence it. Because in the future, if we have other pandemics, we need to be able to go to governments and go, here’s the evidence of what we’ve recorded from people by doing surveys and they don’t have to be like deep academic ones. We could do it twice a year. How much does it contribute to your positive mental health? There are loads of things we could do. I think there are operators that pre-pandemic had good relationships with their customers have come through it much easier. They were able to either freeze or stop memberships in a way that their customers were like, or their members were just like, “Okay, that’s the right thing to do.”
I know several operators who didn’t stop payments all through because they had such a good relationship with their customers. They said we can keep charging you, but this is what we can do in return. I think those who are more transactional saw a bigger hit from the whole pandemic in terms of people canceling because of anxiety about financial security going on. But I do see that the ones have bounced back or seem to be bouncing back to pre-COVID levels, their actual pre-COVID levels, ones that had good relationships with their customers. I do see a lot of stuff being reported about here in the UK and other countries May being our best sales month ever as a headline but then much lower down than saying we’re not quite back to where we were pre-COVID. So the headline is we sold X number, a hundred thousand memberships but we’re still 200,000 short.
The online shift, what I’ve seen from just being on different webinars but also talking to some of the operators I work with is quality of content is one area where retaining customers is really important. So if you’ve got high-quality content, very well filmed, very well constructed that will hold onto customers. But you’re probably looking at them needing to do at least six sessions per month to retain them whereas visiting the club, it would probably only be four. So you actually need more frequent engagement or action. The other end of the spectrum where you’ve got perhaps poor quality, I said poor quality. I don’t mean poor quality, lesser quality. So it’s more like a Zoom call person doing a class to people that they know, it’s all about that relationship between the instructor and the group. I feel for that group long-term because they have to find ways of attracting new people if they can stay online. It was all well and good going, “Oh, I can’t teach my class now on a Saturday because we closed. So I’m going online. Join me online because I already knew you.” But actually getting new people to join that when the quality doesn’t match, some of the big operator type quality can be a challenge. And one of the things, some operators I was talking to last week said they’ve noticed where they’ve created their own content since they’ve opened up their online views have just tumbled because people are coming back in. When they can come back in and do a class, their online views have tumbled.
Alex: Okay. Yeah. Interesting. I think, yeah it’ll, will ebb and flow of course. It will be interesting to see how it kind of evens out long-term. It’s a drought right now. People are really itching to get back in. But I think that would be interesting data to look at and kind of analyze over the course of the next 6, 12, 18 months.
Paul: Yeah. I think one of the challenges that I think the operators may have in their own thinking is that I think pre-lockdown, a lot of operators used to think that if they had a customer or had a member, they owned that member. Now the member actually owns their [inaudible 35:58] other services as well. So their share of wallets is more dispersed. So that might be having a physical club to go to. They might do one or two online-type programs, or those pay as you go or subscription, and they’re doing other stuff outside.
Alex: Yeah. Tracking their runs and their bike rides on Strava. Exactly. Yeah.
Alex: Okay. All right. And in terms of, let’s say, you know, good retention practices for any operators who are still shut down, there are still plenty of countries who are still completely shut down, or maybe also people who are like, we’re doing some real contingency planning right now in case we have to shut down again or for the next pandemic, we hope that does not come. What would you say are some good retention practices while shut down?
Good Retention Practices Whilst Shut Down
Paul: I would say one of the ones I would do is say, stay in touch with your customers. Keep them up to date. One of the things you can keep them up to date on is what you’re doing to make changes or make them aware of what’s coming back. I’d also if you can I’d start grabbing testimonials from people who were successful before locked down. What did the gym mean to you before we had to close? Those types of stories because you have a thousand members, you’ve probably got a hundred great stories. If you can get them to recall, you know you can record it and get them out there. So then, people will go, “Yeah, I remember that. Yeah. That was true for me as well.” So you will build up the anticipation to reopen. So you want to preempt that. You don’t want to wait till you’re able to go, “Hey, we’re open. Are you coming back?” Because when a club can reopen so many other things can reopen at the same time as well. You know bars open, restaurants open and it’s like, where do I go? Where do I go?
Alex: Yeah. You compete for that excitement. Yeah.
Paul: Yes. So if you’re still closed one, I’d be reaching out and finding out how people are getting on. Maybe just get in touch with them and say, we’re just interested to know what you’re doing to keep going. And then obviously if you’ve got any online products or services you’re doing go, if you’d want to access them, you’ve got access to undo it that way. But I’d look for success stories about what people have continued to do on the way up to lockdown and what they’ve found ways of doing since lockdown. And then just doing courtesy calls and asking them, what are they looking forward to when they get back in the gym? This is weird, but you’re asking them to have an experience now about the future. What would it be like when you get back in? What are you going to be doing? What are you looking forward to? Because actually to come up with an answer to that, you actually have to generate those feelings internally and while you’re generating those feelings internally, what you then get to do, people harness that and go, “Oh yeah. I remember that about going to the gym. I am looking forward to that. So you actually pique their interest before they can even have access to it.
Alex: Okay. Yeah. I think that the communication one is a really interesting point. It sounds so simple, but it can be done in so many different ways. So good communication strategy. I was on a call with the managing director of a pretty large Nordic franchise yesterday and he said in his country about 35%, was the normal cancellation rate of memberships across all gyms. For their franchise, it was 9%. And we said, “Okay, well, what do you think it was that helped you accomplish that?” And he said, “Yeah, really transparent and honest and open communication about this is the situation. This is what we’re doing. This is what you can do in the meantime and we’re here for you.” And he said, just being humble and letting them know what you’re working on. And he said, they really felt like that was their kind of edge during this whole lockdown. You don’t just disappear and a week before you reopened say, “Hey, we’re reopening. Make sure you book your spot.” It was really about being present for them.
Alex: Okay. Yeah. Interesting. All right. And as far as advice for operators who are staring at this big task, we say, okay, the person I was talking to in their country, 35% was the average. I think in the UK; it was closer to 50. Was it not? So, you know, imagine, okay, you’re a managing director of a gym. You’re an owner of a studio. You have this task of re-growing your membership back to what it was pre-pandemic. What kind of tips would you have for them?
Tips for Re-growing Membership
Paul: First of all, I’d split it by sleepers and active. And then I’d go, I’d work back. The simplest way of doing it is to work backward through the active ones. So you find out who was the last people in before you shut down because they’re the ones who are most likely to come back and start with them. And then once you’ve gone through all the people who’ve been active in the months leading up to shut down, then you might want to tackle some of the sleepers because if they were sleepers before, they’re probably sleepers now. So you’re not going to do any damage upon reopening because they may have already canceled or quit. But that’s how I would do it. That’s the simplest way I would do it. You could take it a bit further and look up visit frequency. And if your group to your members into visit frequency, so you can see all the people who are coming three times a week, all the people who are coming twice a week, all the people who come once a week, I’d actually start with all the people who are coming once a week.
Paul: Because they’re the least frequent. The ones who are coming three times a week.
Alex: You don’t have to worry about them.
Paul: That’s me and you, we were back in on the first day.
Paul: All you’ve got to do is greet us when we come in and go, “We’re pleased to see you.” For those who are coming less frequently, I’d reach out to them because you want to get them in and visiting. There’s slight variation there depending on what you can do within your data.
Alex: Yeah. I got you. And actually, maybe a good segue then to just talk about data and the role that data can help in impacting growth. So talking about what metrics can be used to analyze loyalty, reverse engagement loyalty, and/or engagement, we could talk about this a little bit more.
Role of Data in Impacting Growth
Paul: Yeah. So first of all, we define retention as how long people stay in months. So it’s a measure of months. We measure within our business, attrition is people and we only ever measure is people. So you can compare it to your sales figures. Hundred joined, hundred left. They all stayed 10 months. You’ve got really clear information there. We would, then, in terms of loyalty, loyalty is always a difficult one I fail to measure accurately. So you can’t. But Net Promoter Score got some way to do that, but I don’t think it does all of it. One of the things that we try and do, where we can is to survey people as close to the point in time where they actually did their activity. So a lot of the operators I worked with might do Net Promoter every month, or every bimonthly or quarter, or something like that.
But we would do more random samples of members almost like if you train today, I want to survey you today. Because I actually get, not a Net Promoter Score, but I can get a better understanding of your experience today, whether it be high or low in terms of positivity. Whereas if I wait a month, you’ve had lots of experiences and actually there’s, it’s called regression towards the mean. The lows become more middle, the highs become more middle. And actually, everything feels a little bit like, “Yeah, it was all right. But I don’t remember the highs and the lows.”
We put a lot of emphasis on visit frequency. We use a general threshold and it does vary by business of one visit per week. As long as they’re visiting one work per week, they’re more likely to stay. As soon as they drop below one visit per week, the likelihood of them canceling or leaving increases. So we’re always trying to drive at least that minimum visit frequency and getting them from one and one to two is ideal. We don’t really try and drive, visit frequency in those people who come in three or more times a week. One, they’re pretty self-sufficient from a retention perspective. And actually, the biggest proportion of your cancellations comes in from your low visit customers. So why would you focus on your services on the ones who are less likely to cancel? Loyalty for me has a more intrinsic motivator. So when we’re building out programs around rewards, there’s a rewards program and there’s a loyalty program. A reward is an exchange. You visit 10 times; I give you a water bottle. You visit 20 times. I’ll give you a towel. Or I give you joining feedback. For me, those are rewards programs.
Loyalty programs are about building intrinsic desire for a product or a service. So I’m avid, I’m in the cult of Mac. I’m on an iMac at the moment. I have my iPhone next to me. I’m Mac. What has Apple ever done for me? They made me feel cool that I’ve got Macs. That’s all they’ve ever done for me. I’m in my late fifties, but I feel like I’m not because, “Hey, I totally ran with a MacBook Pro and I’ve got iPhone.” But they make me feel really positive about their product. The way they talk to me is they talk to me about, you know, I think one of their taglines is we make complex technology simple to use. And it’s like, yeah. So I look like I know what I’m doing. That is about loyalty and I continue to buy Mac products 10, 11 years after I first started buying them. Are Android products as good? Yes. Are some of them better? Yes. Am I loyal to Mac or to Apple? Yes. So there’s loyalty is more intrinsic I feel. I just call it a heuristic approach where there’s something bigger than just being a member. There’s something more than just exchanging money for access.
Paul: So we tend to look at those. We look at visit frequency. We look at Net Promoter. We look at a whole range of surveys. So we look at the ease of access, overall lifetime experience survey. So that’s the whole experience. We break that down into sections as well. But we measure retention by time, attrition by people. We calculate the lifetime value as the median length of stay and break that down by quartiles. Monthly active users, we split by visit frequency, and then we do our surveys. So we’ve probably got about on a standard piece of work that we do with a client six or seven metrics. But depending upon other things that we can measure that might expand. So sometimes we get asked, you know, can you tell us if would people who pay for their own locker, stay longer than people who’ve don’t.
And if you can control for all of the other factors, you can test that. Now we did that for an operator and we’ve shown that those people who did pay for their own lockers did stay longer than people who just use more common, the average lockers. So the argument there was, they said, “Well, we need to put more lockers in that people can pay for.” But the driving factor behind that was the people who tended to pay for their own lockers were actually older and more senior in their management position, which meant they were less likely to be moving jobs. So there were more likely to be staying in that club as their club. So it wasn’t just lockers, paying for lockers, kept people longer. There were other factors. So you have to pull in some of that data sometimes.
Alex: Okay. Yeah. And on the note of data, I imagine the work you do with a lot of these operators globally, and then just the access to the information that you have allows you to spot some upcoming trends that you think are probably going to be important for the fitness industry in the next, maybe one to two years. Can you share some insights or maybe some predictions let’s say?
Future Trends in the Fitness Industry
Paul: Yeah, I would say initially with online, for example, like streamed type products and services, what we’re currently seeing is, I did mention a little while ago but you actually need more sessions. So you need someone and instead of just coming to the gym once a week, they need to be doing two online classes. That’s almost 50% more action to keep them. We also know is the period of time, 45 minutes seems to be the sweet spot online. And I think some of that is because you haven’t got all the faff on either side of it right outside the classroom. Whereas I think, I know we did some research a long time ago about how long class length should be, and whether there was a big tendency within the industry to go for these shorter classes, 30 minutes, like HIT high-intensity type classes people were saying, actually it doesn’t feel like the right thing to do to travel all the way to the gym, just to train for 30 minutes, even though it’s a really intense class. If I’m making the effort to go to the gym, it needs to be for longer, but not longer than an hour. So those are a couple of things.
We certainly know, we’re certainly seeing and being able to use big data and predictions to see the types of people who are canceling more frequently. You know we can spot them fairly early now and different companies that I’ve either evaluated or been involved with, they’re down to, they can give you a list of people who are going to be canceled next month and they get it right four out five times. And when they don’t get it right, they didn’t cancel. But you need a significant amount of data. You need certainly some good understanding of how to create algorithms based on customer behavior. I think the thing that we don’t do enough of in our industries, we do a lot of persona-type creation for marketing, but we don’t do it once they’ve joined and created personas of member behavior once they’ve joined.
So we go, “Oh, She’s a woman. She’s in middle management. She’s wealthy. She likes these types of classes.” And we do a lot of work to attract and build personas around that for our marketing. But we then don’t create a different persona about what their behavior looks like once they’ve joined. And I’ve seen that with a lot more operators. There’s like the marketing persona, but actually, there’s a different persona of how people are actually using their club. The reason they joined isn’t the reason they stay. So you sometimes have to flip some of those things.
Alex: Okay. Yeah. That’s interesting. That’s interesting to think about. Okay. And some questions that we typically get from the audience members that listen in, I think, especially for someone like yourself, you know talking about just you, when you’re not thinking about retention and you know, talking to operators like this, like book recommendations that you would have. It doesn’t have to be fitness industry related. It can be. Yeah. I’m wondering because I see a couple in the background there.
Paul’s Book Recommendations
Paul: Yeah. I have a few books. One of the things I would say I made this comment to someone recently, they came, my office is at the end of my garden. So I work here. It’s like a closed bubble. But I had someone visit me and they were going, “Oh, can I take a picture of your bookshelf?” And I went, “Yeah, of course, you can.” And they took a picture and they go, “I’m going to read what you read.” I went, “You might read what I read, but you won’t think how I think.” But certainly, I’ve been reading books on customer experience at the moment and creating customer experience. So where is it? It’s old. It’s an oldie but a goodie. It’s Russia. It’s the Experience Economy, Pine, and Gilmore. It’s a brilliant book. There’s another one. This one, Richard Wiseman, 59 Seconds. Those are all about behavior change techniques that you can apply in 59 seconds.
Alex: Okay. Yes.
Paul: So they’re not like sitting down for an hour, tell me about your life.
Alex: Yeah, yeah, yeah.
Paul: It’s like really snapping. Now, none of these things are written with the fitness industry in mind. They’re written and they’re based on research in other areas. And all you have to do is go how do I compare that to the fitness industry? So there’s one in here that I read recently and I did a post about it here when we’re counting things, if we want people to be successful, let’s say it’s in their exercise. They’re doing personal training, they’re doing 10 reps. You count up to five and then down from six because actually for people to feel successful going one, two, three feels really good. Then when we get to the midpoint, if we tip that to five to go, four to go, three to go, actually the end seems like it’s getting closer.
Alex: Yeah. I’m going to try this.
Paul: Just after I’d read that, you know, I did a post saying, you know, trainers need to think about it, online programs and if you’re streaming something online, you need to do a count up and a countdown timer. It’s showing you how much you’ve done, but how much you’ve got left to do. Interestingly, I then watch the Formula One Grand Prix in Monaco and David Coulthard was talking to one of the other drivers. And they were saying, “How did you use to do lapse? Meant in your head. Both of them said it was, we’d count up to the pit stop and down afterward. So it wasn’t something that we’d just do. And I think books like these, they’re really, really insightful, but you have to go, how does that apply? Well, I’d go with those two.
Paul: The Economy Experience and 59 Seconds.
Alex: I have to check those out. Yeah. I think I do the counting up and down without even realizing that that could be a strategy. So, if I’m out on the bike or something, you get really excited once you get up to a certain amount and then you start to get tired. And I’m like, okay, I know at this time at this intersection or this house, I only have 10K to go, like, make it home. Be okay. Yeah.
Paul: Yeah. I was saying to someone, my friend who I trained with, I was saying, I’ve done that on treadmills in the past. It’s like, I’m going to run for 20 minutes. I’ve done one. I’ve done two. I’ve done it. I said the other thing was that really amazes me how good at fractions I am when I’m on a treadmill, it’s like, I’ve done 10%. I’ve done 20%. I’ve done 30%. Yeah. So…
Alex: I’m terrible at math. I wouldn’t doubt that.
Paul: For me, a lot of people try and read too many different things. So they’re trying to read for information. And one of the things I would say is read for insight, not just read for the sake of going, ‘Oh, I’ve read the top 10 best sellers.” Like, which one of these books is going to help me with my business and so for the types of things I do, those are the types of books, even though there are books up here on exercise, adherence and behavior change and all of those things as well.
Alex: Nice. I think that’s always a good one to keep in mind because you always see people with these reading lists. Hey, I’m going to read 52 books this year. Like, okay. Well, how much of that information are you actually going to retain and apply? Or would it be better to read 12 or six? And really, really dig into what it’s about. Okay. All right. We’re going to start to wind down here a little bit. Always like a good ending point, Paul, it’d be great to let the listeners where they can go to find out more about you. I know you are pretty active on social. So yeah, where they can sort of find out more about what you do and get your tips.
Paul: Okay. So on social media, we post every lunchtime Monday to Friday, predominantly on LinkedIn and Facebook, but we also do Instagram and Twitter, and others. With what we call lunchtime lessons and they are just, I can tell you this, they’re always shorter than a Twitter post because all of them, we write them for Twitter-sized posts and then put them on all the other platforms. So there are about 200 characters long, so they’re not very long, but they’re usually things, sometimes they are a piece of research that we’ve done that we’re sharing. Sometimes there are opinions and sometimes there are our inventions and things for people to try. So we do a lot of those. We’ve got videos up all over again, on social media and on YouTube. But if people want to deep dive more specifically into the areas that I focus on, then our website, which is really easy, it’s retentionguru.com. There are blog posts on there. There are videos on there. And if anyone wants to reach out to me, they can reach out to me through the website. If they’ve got questions and things so that I’m always happy to do that.
Alex: Excellent. Well, I think I follow you guys on Instagram. So I see some of the lunchtime lessons, like super actionable, really good, quick tips, things that someone could apply that day. It doesn’t need to be something that needs a full project analysis. It’s like, and you know to almost wrap it up, it comes back to how personalization, it can just be the simplest form that can make a difference, right.
Paul: Yeah. Definitely.
Alex: Yeah. Awesome. All right, Paul, it was a pleasure having you on. I appreciate you taking the time to share your expertise with us.
Paul: You’re welcome.
Alex: This has been another great session of Lunch and Learn with us, Dr. Paul Bedford. Thank you for joining us.
Paul: Thank you.
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