Written by Bryan Pritz
We’ve been open for over 6 years now, and at a membership base of over 600 at our Pacific Beach Gym, we’ve seen pretty much everything at this point. We operate in a highly transient market of San Diego where people move to another region of the country quite frequently. Through all of this, we’ve collected piles of data on why they cancelled, and have tested a collection of methods designed to keep members longer for scenarios that are within our control.
At the point of writing this and using the methods I’ll outline below, we’ve reduced our churn rate to the lowest it’s been in our 6 years of business (3.4%) and still have a growing membership base. Ultimately, it’s come down to positive experiences, both in and outside of the gym.
In this article we are going to focus on the impact of creating good experiences through customer service, or “outside of the gym” opportunities.
We’re going to assume you have members and are doing at least an average job of keeping them. If you need help with your training program and culture, listen to our podcast episode 11 on How to Set-up Your Programming to Grow Your Gym and episode 4 about Creating a Proper Gym Culture.
Why Customer Service is So Important
As we’ve discussed before, your gym is now a commodity, meaning people can find a similar gym within a close proximity to you. This wasn’t the case 5 years ago. No longer can you achieve success solely with programming.
Over the past 30 days, we’ve had 4 new members (that we know of) switch to Performance360 from another gym because they were unhappy with how they were treated by their former gym through some sort of customer service communication. They were not unhappy with the training itself or the gym in general, only how they were treated when requesting some sort of hold based on unusual circumstances. This is pretty remarkable, wouldn’t you agree?
Each of the gyms that lost the member could have easily saved the relationship and kept the member by focusing on one single thing: creating a positive experience through this communication.
Another example of why customer service is so important is we’ve had 65 former members return to us in the past 2 years alone (when we started tracking our gym business data in a detailed manor). Often, people leave for acute scheduling reasons, life gets in the way, and ultimately have the opportunity to join again down the road. They will look elsewhere before they reconsider returning to your gym if you have not made their departure a good experience. Those 65 members who left and ended up coming back created an additional $7,800/month (Avg. Membership of $119/month) revenue, purely resulting from this style of customer service.
The cost of this revenue acquisition was nothing.
What Does Creating A Positive Experience Mean?
Creating a positive experience in this situation is simple. We are taking a neutral or negative situation and turning it into a positive outcome for both you and the member.
Examples of this include someone who is trying to cancel a contract early, someone who is trying to put their account on hold, someone who is requesting a refund or basically someone who is requesting an adjustment to their membership which is not traditionally part of your membership policies.
Let’s Take A Look at Some Real World Examples
In each of the 4 cases where the member was unhappy with how they were treated by their former gym, the individual had some sort of request for their account to be put on hold due to an injury, an adjustment in their work life such as accepting a temporary contract position in a new city, or were vacationing for an extended period of time. In each of these cases the gym was unwilling to modify their membership terms to accommodate the member which resulted in the member leaving and looking elsewhere, and making Performance360 their new home.
Example #1: Frank
Frank was previously training at a local CrossFit gym when he was put on a work project up in LA for 3 months. He was in a contract with his previous gym for another 6 weeks and reached out to his CF gym to explain his situation and ask what his options were. The response from ownership was “Sorry, you are in a contract and will have to ride it out.”
No explanation, no sympathy, not caring. Frank was immediately put on the defensive and frustrated that he would have to pay while not being able to attend. Negative experience created, and when he returned from LA he sought out another gym. We gained a member and the CrossFit gym lost a member.
I get it. From a business standpoint, allowing people to bail on a contract defeats the purpose of having a contract. For us here at Performance360, we give a discount on the monthly membership price for committing to a set period of time. We wouldn’t give that discount if we didn’t hold people to the terms and instead let customers take advantage of us. However, there are ways around that which ultimately are win-win outcomes for both the gym and the client.
First off, the communication needs to be sympathetic to the individual and needs to focus on you both being part of the same team, working together for a positive outcome. A better response would be:
I’m sorry to hear that work is pulling you away. Hopefully it’s a good opportunity for your career! I took a peak at your account and it looks like you are in the middle of a contract. Normally, there’s not much we can do once you are locked into that contract, but I’d be happy to try and figure out a solution if you are interested in returning since this is a unique situation. Do you plan on returning to the gym after your work assignment is complete and you are back here?”
Notice that I made sure to address his unique situation, acknowledge that he was in a contract and that in most cases we stick to the contract, open up the possibility of finding a solution (not promising one right away) and asked a question that ultimately determines if we’ll make an exception to our policy. If he responds that he is not planning on returning, it’s unlikely we will explore the same solution as below. But most likely, you’ll get some version of the following response:
“Thanks guys. I’ll be up there for 3 months and am definitely interested in returning to the gym once I’m back. Let me know if there’s anything you can do.”
Immediately, the tone shifts from resenting the gym to appreciation for willingness to work towards a solution. The response would then be something like:
“Great to hear Frank. What we can do is charge the remaining balance on the contract so you have completed your obligation, and we can put your account on hold while you are gone. This way, when you return you’ll have the remaining 6-weeks on your contract pre-paid and ready to use when you can come to the gym. Does that work for you?”
By doing this you still receive the full value of the contract, but the member doesn’t lose the time and money while they are unable to train at your gym. Most likely, when Frank returns and uses the 6-weeks left on his contract down the line, he’ll continue to be a member moving forward even after his contract is up. When we’ve done this type of adjustment for people, we often get responses such as “You guys are awesome!” or “Thanks so much for working with me” and everyone is a happy camper.
Far better than losing the member and having someone out there talking bad about your brand, all for an additional 1.5 months of revenue.
Example #2: Sarah
As I was chatting with Sarah before a class one day about her starting out here, she told me she was bouncing back from a broken ankle. As I asked more about it (listen to our podcast episode on How to Create Better Partnerships with Your Clients) she went on to tell me about how the injury happened and how she ended up finding our gym. I felt like she was harboring some anger about it and wanted to get it out.
Sarah was a member of another gym about 20 minutes away and broke her ankle while on vacation. As soon as she got X-Rays and found out the severity of the injury, she emailed the customer service email on the website asking if she could put her account on hold. After about a week of silence with no response, she called the gym phone number and talked to someone on the phone who told her to email the customer service email. After she explained that she had already done this, he went on to tell her he would check on it and get back to her shortly. After another 3 days passed with no response, her monthly membership payment renewed and she was angry.
She cancelled her membership and submitted a chargeback with her Credit Card company and recovered the funds, ultimately leading to her writing a negative review online about the gym.
After another few days, someone finally got back to her email and told her they don’t allow holds and it was part of the fine print on their website. The moment Sarah was recovered and cleared by her physical therapist, she sought out a new gym specifically looking for great online reviews, finding Performance360 and commuting 20 minutes to be a part of it. She lives 3 blocks from her former gym.
Again, this could easily have been avoided had whomever the jackasses are that answer emails and phone calls related to their paying customer and tried to find a solution that fit both parties. Aside from the fact that their response time was cringeworthy, they handled the situation like far too many gyms do. They acted as if the client was secondary.
Had the gym offered a hold policy (not having a hold policy is a major no-no) and had it been accessible online (a big yes-yes), or even if they took the advice in this article, they would have saved a member. Instead they gained a negative review on Yelp and an angry ex-member talking about their bad experience to others, all for that last single week of revenue they received.
Customer Service Rules:
To summarize your strategy for handling customer service issues, follow these rules:
- Respond within 24 hours.
- Be sympathetic to whatever situation your client is in and relate to their issue.
- Have a set of terms and conditions and make them very simple and very clear when people sign-up. You don’t want to blindside them down the road. 95% of your members will follow these policies, if they know them.
- If someone is asking for something outside of your standard terms and conditions, figure out if there is a way to make it benefit both sides. Your end goal is to keep the member, even if you bypass a temporary gain.
- If someone is trying to take advantage of you, stick to your policies but explain “why” rather than just denying their request.
- Have a hold policy. Display this publicly.
- Consider you and your client part of a team, working towards the same goal.
- Always end the experience on a positive note. Even a situation where you are unable to come to a solution and it ends poorly, the following simple email response goes a long way.
“I’m really sorry we couldn’t figure out a solution for you. Thank you for training here for the past x months and good luck to wherever you decide to train.”
This simple email will at least calm any animosity the situation has created and may save a negative review.
Take the negative member examples above and compound them over time, and that’s the difference between a successful gym and a failing gym.