Membership Retention Strategies: Plan “B” for 2010 by Bob & Jolyn Esquerre

CASE STUDY #1: The 2d Largest Club Owner & Operator [160 Clubs] in NE & Mid Atlantic Regions; 35 Years in the Business; 503,000 Members; Projected 2009 Attrition Rate= 44.4% [223,332 Potentially Lost Members in 2009].
CASE STUDY #2: This Club Chain controls 3.7% of Fitness Industry Revenues; 84 Clubs in 19 States; 16+ years in the Business; 608,281 Members; Projected 2009 Attrition Rate = 40.6% [246,962 Potentially Lost members in 2009].
Why is it that after 25+/- years of trying to fix the membership attrition problems within the fitness industry, we are still experiencing a membership attrition rate of between 35% to 45%? Some clubs are higher, some clubs are lower! What makes the retention problem even worse is that IHRSA had published the IHRSA 2007 Guide to Membership Retention by John McCarthy that quantifies “…Industry Lessons on what-and what not-to do”! Yet despite the benefit of John’s insight, we still can’t get it right!

According to John McCarthy, “..membership retention for commercial fitness facilities, had always been a subordinate objective to these clubs’ primary objective, which is substantial and sustainable profitability.” “If a commercial club operation could sustain substantial profitability with attrition rates in the 35% to 45% range, so be it.” However, the 2009 recession and the slower recovery that is compounded by a high unemployment rate, is now forcing our industry to take a much harder look at (1) what hasn’t worked; (2) what is still not working and (3) the need to come up with a Plan “B” that has options that have never been tried before. At the end of the day, the fitness industry must have four (4) interrelated objectives in order to achieve sustainable profits:(1) the creation of a valued-added environment that will attract new members; (2) have the ability to consistently provide value-added services and/or programs that create member-specific reasons for them to stay at the club; (3) have employees who have a vested interest in managing the member experience so that these members can simultaneously get results and have a great experience; and (4) be able to quantify, package and market the member-specific results so that they can used to manage the increase in member referrals from “happy”, “satisfied” members.
Our Plan “B”: The Concept of Programmed Training [PT4]
As a membership retention concept, PT4 (1) requires the repositioning of Club Programming as a comprehensive business platform that is able to seamlessly support the member experience, and (2) requires the club’s fitness team to both deliver and manage the member experiences. Under PT4, the member experiences include the following four integrated programming options:
1.Fitness Floor Programming;
2.Group Exercise Programming [Non-Fee Based];
3.Personal Training Programming [Fee-Based One-on-One Services]; and
4.Both Small [2 to 8] & Large Group [>8 to 20] Training Programs [Fee-Based].
The ultimate job for the fitness team members is to seamlessly move the members thru each of the club’s four programming centers
so that each member can achieve their individual goals.
[Please note that we have obviously excluded from the PT4 Concept club members who are regular users who move freely between
each of these four member categories on their own.]

In order to understand our concept of Programmed Training, we must clarify and in some cases redefine Programming. There is “Programming” and there is “Programming”. Traditional Programming, also known as “Programming-in-a-Box”, consists of non-fee based and non-branded Group Exercise Classes [that have no true beginning and no true end] & Personal Training Services that only involve approximately 9% of most club members, according to the 2009 IHRSA Personal Training Report. Plus, most personal training programs do not support their clubs membership retention programs.
These service options (1) have traditionally been mutually exclusive, (2) are provided/delivered by 2 traditionally segmented work groups and (3) are delivered by work groups that tend to represent their own interests instead of the interests of either the members or of the Club’s brand. In the best of times, both of these services have the potential of being successful. “Fast forward”….the best-of-times have been replaced by a slower economic recovery that is characterized by a more cautious, educated consumer who is looking for and demanding more value.
The 3rd member group consists of those individuals who want to work out on their own. Most clubs provide a sub-standard, “cookie-cutter”, new member equipment orientation. This upfront service option is so weak that most members are eventually forced to figure out on their own what they need to because they have no one else to go to after the orientation is completed. The 4th member group consists of those members who cannot afford one-on-one training services but can afford fee-based group training programs, if and only if the members perceive value in the Group Training Programs [GTPs].
These 4 programming options, branded PT4 by our organization, have traditionally been kept distinct and segmented. Our Plan “B” is to create a synergistic relationship between these programming options so that the members can seamlessly be managed between each program. The question now is how do we bridge the operational and organizational gaps that can make this occur? The answer
is to create an operational and customer service business platform that is managed by fitness professionals who are incentivized to manage the member experience as a core objective of the Club’s value proposition aka the Club’s brand!
After the Club’s brand has been redefined and the new value propositions have been embedded into employee job descriptions, the following Steps must be taken and managed:
Step #1: Successfully integrate our members into those programming options that the members have an initial interest in getting involved with [as opposed to, for example, trying to sell them just personal training];
Step#2: Integrate the Member into a 2nd programming option that is a natural extension of their initial Program; and
Step #3: Create and manage a segue that would move the Member into a comprehensive programming plan that includes all the options that will help them reach their goals.
We are asking the fitness industry to undertake a major cultural shift……a shift from “selling-at-all-costs” to a more focused customer centric service shift that would (1) stimulate the creation, delivery & maintenance of value-added, member-specific programming options [PT4]; (2) create managed member training outcomes that would validate the club’s value propositions; this would in turn, (3) control, stabilize & eventually reduce the membership attrition rate. If these results take place, membership referrals from happy, satisfied club members will increase.
Are you or your club ready for 2010?

Meet Your Authors: Bob & Jolyn Esquerre
Bob & Jolyn are Business Solutions Consultants and Co-Owners of the Esquerre Fitness Group [EFG]. EFG, Known for Training
Trainers, Training Group Exercise Instructors and Training Managers, has consistently pushed the envelope-of-excellence in
challenging our industry to provide exceptional service to our members. Recognized as subject-matter-experts in personal
training, program development, club branding, management development, customer relationship management and membership retention, Bob & Jolyn’s total focus is to create customized business solutions for their customers.

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