Retention vs. Loyalty

You pride yourself on your club’s service and hospitality. You are much better today than you were yesterday but not nearly as good as you want to be tomorrow.  You work very hard to hire right, treat staff right, treat customers right, and to constantly improve. These efforts seem to be rewarded. The questions is can you still do better?

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Let’s not kid ourselves about “retention.” You can initially retain members through specific tactics; lock people in to long term contracts and make cancellation painful. But these tactics won’t go unpunished. At some point your “customers” will break free and run like exploited hostages; once exploited, people rebel.  Sometimes it’s mild rebellion and other times it is loud and nasty.

Retention is the lagging indicator of customer loyalty; i.e. a result of the love your customers have for your business.

Stop seeking retention, and start seeking loyalty.

What if you measured attrition based on when customers’ hearts left you? Not bodies and wallets. What if you measured how many current and former members still love your business?  In other words, of the people still paying dues, how many do so but don’t really love your business? Of the people that cancelled, how many did so but still love your business?  If the answer to the former is “zero” and the answer to the latter is “all” you would have the highest loyalty possible.  Retention is thought of as people still paying their dues. When they stop, they move to the attrition side of the ledger.  But if you could measure the investment of their heart instead of money, how many members and former members would be on the “loves us” or the “doesn’t love us” sides of the ledger? Your customer retention/attrition metric and P&L are likely not reporting this.

Assume that long-term value was your only objective. Assume the only metric you were going to use to determine long-term value was customer loyalty. Where would you start? How would you determine the things that were causing violence to your loyalty objective?

Here is a simple filter to determine if your operation is creating even minor feelings of exploitation with your customers. Danny Meyer, in his book “Setting the Table,” makes the statement that “hospitality is what happens for you, not to you.” If your focus is on service and hospitality, look at every process and interaction through this lens. Ask yourself if it happens “to” or “for” your customer.  Start with how you answer the phone, transfer a call, check someone in, sell a membership, sell personal training, set appointments, sell a shirt, allow for a guest, cancel a membership, and handle complaints.  Dig into each of these and see if it is happening “to” or “for” your customers.  During the cancellation process have you turned the customer that loved your business into a former customer that now despises your business?

Let’s suppose you’ve looked at every process and are mortified to discover that almost all of these things, by design, are happening “to” the customer. How do you start to turn this ship around?

I can tell you this, not by commanding your staff to be hospitable!  Not by stating a new direction and mandating that everyone attend customer service training.

You start by looking at how you manage and lead your employees. Are their jobs happening “to” or “for” your staff?  Are you trying to be outwardly hospitable with an inwardly hostile culture?  Hospitality and service work when they are an embedded part of your culture. You can’t ask people that do not feel like they are treated well to treat others well.

If long-term value is the wish of the investor/owner, you have one path to follow: Only the right culture can create happy and loyal employees.  Only happy and loyal employees can create happy and loyal customers.  Only customer loyalty can create long-term value. Only long-term value will create a happy owner/investor.

A little forensic work will reveal that bad culture is generally due to authoritarian leadership. The pursuit of the wrong metrics is a wasting your time, your employee’s time, and your resources.

Do you have any comments or thoughts you would like to share? We would love to hear from you!

7 Rules for Being a Great Health Club Member

We write a lot about how to be a great health club and how to deliver great customer experience. We recently worked with Keith Catanzano of 2River Consulting in Washington DC to do someamazing segmentation on our member data.Keith created a “predictive model” using historic membership data to find our common segments reflecting different cancellation rates. This gave us incredible insights into our membership base that I have never had before.

But it got me thinking about what is a “great health club member?” It always pisses me off when someone describes the ideal member as someone that pays for but doesn’t use her membership.  I hate the whole idea of that and chances are, if you are a club operator, so do you. That thinking disappeared with platform shoes – at least I hope. So here are my “instructions” on how to be the IDEAL gym member!

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1. Use The Gym

Come in at least 3 times each week. No time?  We can design a kick-ass 12- minute workout that you can fit into your busiest day!  Let us help you with the problem you need to solve so that you can utilize the gym.

2. Report Problems

If you get on a treadmill and that TV doesn’t work, PLEASE let us know.  We want everything to be in working order and you should expect it to be!

NOTE TO OPERATORS: Make it easy and obvious for your members to report problems!

3. Give Feedback

We know you get enough email but as our member we really do want to know how we look through your eyes.  When you receive our email asking for feedback please provide it and don’t hold back!  It won’t take long and we use the information in every meeting to create accountability and to foster continuous change.  We would also love it if you rated us on Yelp! facebook and google+.

4. Bring Your Friends & Family!

Hey, we are a business and would love to grow. If we could get every member to bring in one person to join once a year we would greatly exceed membership goals and have more money to spend on facilities, equipment and programs members love.

5. Bring Ideas

Have you been traveling and seeing anything cool you think we should consider?  Tell us what it is and why you liked it!  Or maybe you are just one of those people that comes up with ideas in your everyday experience.  Keep the ideas coming! We know we need to change constantly and knowing your ideas will help us do just that.

6. Expect Excellence

It keeps us on our toes and we know that your experience here will determine your commitment to these non-mandatory instructions. You see, we know these “instructions” are really “favors” we are asking of you.  You won’t much feel like doing a favor for any business that isn’t working their ass off to earn your trust.  We get that.

7. Use & Know Gym Etiquette

·       Be nice to staff.

·       Be nice to members.

·       Clean up after yourself – sweat, weights, chalk etc.

·       DON’T drop weights – even when doing power cleans.

·       Let people work-in with you.

·       Don’t wear offensive clothing.

·       Don’t take yourself too seriously.

·       Deodorant usage good, cologne/perfume bad.

·       Smile.

That’s it. As club owners we are always trying to create better and better customer experiences.  Perhaps we should include instructions on how to be a great member every time we onboard someone? And while I don’t think it is reasonable to expect all members to follow the instructions, I do think it is reasonable to offer them.

 

Giving your clients a voice: the benefits of customer management systems

As the owner of a gym or health club, you want to do whatever you can to stand out to your members. The little things can make a big difference in the long run, and help you promote your fitness club and be successful. One tool to do this is through a customer management software.

Giving your members the opportunity to give you feedback using customer experience software can help you go the extra mile to keep and gain clients. Here are some key information points customer management software can help fitness club owners learn:

  • Get to know your gym members
    Are your customers mostly young people, interested in exciting new workouts? Senior citizens trying to find some light movement classes? Night owls? Earlier risers? Families? All of this information is important to know! If your members are mostly young professionals looking for exciting new workout classes, it won’t help to host yoga classes at 10 a.m. on a Tuesday. Knowing who your members are will help you better serve those coming to your health club.

  • Keep up with trends
    There’s always a new type of workout routine or fitness class that your clients might be eyeing. Maybe they wish there was a certain type of machine, or maybe they’re looking for classes on a certain subject. If you’re not in touch with them, there’s no way to know what they’re looking for. There’s no way to have your finger on the pulse of everything at once, so use surveys and other tools to keep up with trends.

  • Interact with your members
    Everyone loves a place where they feel welcome. If your members walk through the door of your health club, and your staff is there to greet them, it makes a big difference. It makes an even bigger difference if the next time you see that client, you ask how they enjoyed that class they took or how their kids are doing. The same is true online. If you follow up with your members, you’ll be able to build connections that will entice those clients to keep coming back.

  • Make your clients feel heard
    People don’t like yelling into a void. Instead, make sure your customers know their voices will be heard with interactive customer management system. Giving them a place for feedback where they know you’ll listen will help build that relationship for years to come.

Are you interested in learning more about the benefits of customer management software? The team at MXM today to get started.

Training the Customer Experience Athlete

Great athletes have great proprioception. Great customer experience athletes have great “social proprioception.”

Proprioception is an individuals’ ability to sense where they are “in space.”  Without video, coach feedback, or seeing with one’s own eyes, they still have a high degree of awareness as to their entire body position. Rory McIlroy knows exactly where the club is pointing on his backswing. Giancarlo Stanton knows exactly where the bat is even while focusing on the spin of the baseball. There is no delusion about what they can and can’t do.

Hold that thought and engage me in the concept of “social proprioception.” We coined this term at our clubs to help staff understand that everything matters when it comes to the member experience. Our definition – Social Proprioception is the ability to sense the emotional affect a person has on anyone able to observe his/her actions. 

This applies to anyone but let’s start with personal trainers. In reading literally thousands of member comments from hundreds of gyms, I can sum up most of the feeling like this –

  • Trainers only talk to you if getting paid.

  • Trainers don’t care about anyone except those that pay.

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How do so many people at so many different gyms get the same feeling?  Well, good trainers are focused on their client. Good trainers have full schedules. Couldn’t those two things alone create the negative perception?  Yes but so what?  You still can’t excuse it. Moreover, just telling your trainers (or any other position) to “be more friendly” is not a teaching tool.

Let’s fix that by using the concept of “social proprioception” (SP) as a teaching tool.  We might even include this before we hire anyone in any position – “Around here we require every employee to understand and demonstrate extremely high levels of social proprioception!”

Once we frame-up the concept we can start to teach it and build awareness.

Level 1 SP is constant awareness that what I say, how friendly I am, and whether I wipe down equipment will send a message to my client.

Level 2 SP is constant awareness that doing the same will send a message to my client and the person next to us.

Level 3 SP is constant awareness that by adding a quick and casual conversation with the person next to us it will send an even stronger message.  At this level I begin to recognize the importance of the messages I send when I engage outside my immediate circle.

Level 4 SP is constant awareness that my inclusive behavior is a strong message to those near me and perhaps even stronger to the 62-year old woman on the treadmill 50 feet away who has been watching and judging our staff friendliness based on her “facts” – what she sees.

Last week I was training at a very popular gym. I have never seen so many trainers as consistently busy as I saw in this place. Like on a lot of gyms, the floor is easily observed when doing cardio.

What I notice here is how engaged these trainers are with their clients.  No one is just “counting reps.” They are all in close proximity to other people and focused. But it is as though they have a circle drawn around them that constitutes their entire world. If I have very high SP and I am only focused on my client, then I am aware that I am sending an isolationist, exclusive signal to all others in the gym. My awareness might change my behavior to a more open and inclusive presentation of myself. Now what if all 15 trainers did this at the same time?  How powerful would that message be throughout the entire gym? It wouldn’t take much to transform this entire environment into a “neighborhood.”

  • Know that you can be fully engaged with your clients AND fully engaged with your surroundings.

  • Know that how friendly you are to non-clients is how you are judged by 95% of members.

  • Know that this is your marketing program AT LEAST as much as client referrals. 

When selecting employees, require that they be both an excellent trainer (or instructor, front desk associate etc.) and a great customer experience athlete.

Find new ways to teach and demonstrate “Social Proprioception” and then share them with me at blair(at)medallia.com or leave a comment below.

We Say 'Yes'!

The product of the health club business is the member experience.  Just as the product of a restaurant is not only the food but the overall experience.Say this in a group of gym owner/operators and most will agree.  Asked if they deliver an excellent, average, or poor member experience and I bet at least 80% say “excellent.”  I would also bet that 80% of members say “poor to average.”

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This indicates a gap in the implied strategy and the ability to deliver the strategy.  If your strategy includes the intent to delight your members, design your business to deliver.  This requires more than telling staff to be nice and say “hello” and “goodbye.”  Whether you are a full-service multi-sport club or a low-cost fitness-only gym, there is no excuse for poor service.  The difference in these two models is simply the scope of services provided.

It is important to understand that the member experience is defined by the member, not the operator.  Operators create policies, strategies, launch initiatives, and train staff.  The affects of those decisions will be positive, neutral, or negative in the member experience – only the member can make that determination.

Great customer service that builds loyalty begins with two rules:

  • First, create no unpleasant surprises.

  • Second, create lots of pleasant surprises.

During a member visit if you can avoid any of the former and create several of the latter, members will have an excellent experience. Many businesses fail at this because policies and staff training are done to primarily protect and benefit the company, not the customers.   How many policies and procedures are created with an individual member’s experience in mind? A member’s experience is disrupted with policies that make no sense to them, cost them money, or even make them angry. The front line staff is left with the most aggravating words in customer-service history – “that’s our policy.”  A member doesn’t care if that is your policy or not, she wants to know how your policies are designed to bring value to her, your member. It is very important to differentiate between the intent of a policy, process, or procedure, and the feeling that the policy, process, or procedure creates for a member.  Intent means nothing. Feeling is everything. Design your systems with the end feeling of the member in mind. 

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In addition to burdening front line staff with too many company-centric policies and procedures, the time spent training staff to “enforce” policy becomes disproportionate with time spent teaching values, connectivity, complaint resolution, and delivering pleasant surprises. I would even argue that an over-regulated service environment with disempowered staff does not attract the best employees.  In my experience, service environments that give the front line staff authority and in fact the directive to “do whatever it takes to make the member happy” will attract employees that love helping people.

A key word (albeit a grossly misused word!) is empower – to give power or authority. I say misused because many who claim to have empowered their front line have done no such thing. They give them the power to say “no” but not the power to say “yes.”  If you truly empower your service staff to deliver great service, you bestow the authority to say “yes” as well as “no.”

Years ago we did a beautiful experiment with our front desk staff in an effort to get better at serving our members. We empowered them to do whatever it takes to make the member happy.  Next we told them that they had to ask for manager permission to tell a member “no.” We cringed and waited for them to give everything away.  They didn’t.

Four things happened:

  1. Members were happier.

  2. Staff became happier.

  3. They did a great job!

  4. We discovered their limits of comfort when they came to ask permission to tell a member “no.”

If your strategy is differentiation, not commoditization, then this points in the right direction as there are very few who will have the courage and the patience to deliver on a true customer care strategy. Chances are, you will be the only one in your market and that is true differentiation.   

Top 3 Practices of Customer Experience Leaders

Okay, are you ready for this? These are lessons that I learned during my 20+ years managing health clubs. Simple to identify but harder to implement. Three practices used by top Customer Experience Management practitioners that can help you begin to manage the experience at your business vs. just putting out fires as fast as they start. Here they are!

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  1. Listen!

    The true leaders of a positive customer experience actually listen to their customers AND their employees.  They have systems in place that allow them to listen to their customer & employee feedback (un-solicited!) and methods to analyze and use the data or information provided by those customers and employees.  When the customer or the employee points out a faulty policy or ‘friction-full’ procedure, they listen and work together to find a better way.

  2. Shelve the ego!

    It takes a unique leader to be able to openly listen to criticism and to make positive change as a result. Most leaders are set in their systems and operations and are unwilling to make changes even when their customers and employees are clearly telling them this isn’t working. A true leader knows they are only as strong as their weakest employee and operation. For example: at the next convention or out of town meeting, listen for this: “My people just can’t survive without me. I need to get back! Things are falling apart.”  This company is NOT a leader in the customer experience world.  True customer experience leaders don’t wait for the bottom line to drop before making change.

  3. Have a Customer Experience Mission!

    EVERY employee must know his or her role and expectations in the customer experience strategy. The customer experience mission statement is clearly and effectively communicated to every single employee, every single day. Customer experience is the first thing and the last thing talked about when hiring a new employee. The new hire KNOWS and UNDERSTANDS the company’s commitment and passion for customer experience from day one. And they also are clear on what role they play in that experience. The true leaders of customer experience continually hire and train around their customer experience strategy.

What to look for in a customer experience platform

As a health club owner, you know that you should listen to your members’ feedback. It’s a simple, easy way to build great relationships. But how do you get that feedback from your members? As someone managing a health club, there are so many avenues to glean feedback: social media, online reviews, pen-and-paper suggestion boxes and even face-to-face meetings. How are you going to take the time to retrieve all the feedback, let alone sort through it and implement it?

One of the best ways to get client feedback is through a customer engagement software. This type of management software is a valuable resource to help you retrieve, record and sort through data. As you begin looking at customer management software, keep a few things in mind. You need a software that:

  1. Gives your customers a voice
    Membership satisfaction surveys and online polling offer your members a place to express their opinions, wants and needs. Giving them a place to put all this information down in a forum where they know you’ll be listening is very empowering — not only does it give the customer a voice, but it builds on the relationship between the business and the customer.

  2. Help you make connections to upcoming trends
    If your members are loving your new class schedule, you want to know that. If they want more weight lifting machines, you need to hear that. But if they’re unhappy with an aspect of your business, or are starting to look for something different in a fitness club, you need to know that too. With a customer experience platform, health club managers want to be able to identify trends as soon as possible so gym owners can stay ahead of the curve. Using a customer engagement software will help you spot those trends.

  3. Provides data you can’t find on your own
    How do you spot those trends? By using real data to see what your members want and who they are. Not only can you figure out who your client is, but you’ll also be able to learn about what they want and how you can provide that. And that leads to our final item…

  4. Shows you ways to improve
    So what good is data if you can’t use it? Once you gather data from a customer management software like MXM, you’ll be able to use that data to create real economic growth for your business, as well as improve every member’s visit to your health club.

Are you ready to find your customer management software? Check out MXM and contact us today for more information.

Running In Place

Member attrition is expensive. Every year many clubs have to replace 30% to 50% of their members just to stay even.  You’re running in place.  Every replacement can cost up to a few hundred dollars to attract.  That doesn’t leave you with a lot of resources to grow your membership.

Improving retention is critically important if you are going to break this cycle and start growing. But how?

There is no magic bullet. No single program keeps all “at risk” members coming back. Members leave for different reasons at different times in their life cycle. A program that is effective at keeping a recent member coming back may have no effect on the seasoned user who has decided to explore “options.”

It’s not hopeless – not by a long shot. The good news is that members generally fall into natural groupings.  It is possible to predict when members in different groups might terminate their membership. And often these groups’ characteristics can help you decide how valuable they are, what their natural usage level is, and what some of the triggers driving them away are.

In other words, by using your own information to understand your members better, you can improve retention by reaching the right member, at the right time with the right message.  Your retention program won’t be one size fits all.  It will be directed, nuanced and very cost effective.

Let’s look at how something like this might work. Remember, every club will be different. Your club won’t be exactly like these examples that are composites of a number of very different clubs. It is also important to remember that there is a member life cycle – at different points your members become vulnerable.  It is key to catch members at these points before the urge to leave takes root.

In some clubs we see a spike in attrition 60-90 days after a member joins. Perhaps the member started out strong…and then life got in the way; perhaps the member joined because of $0 down…but didn’t build a strong habit. Further analysis of these members can uncover different groups.  That allows you act decisively in a targeted fashion.

Here are some steps you can take:

  1. Generate a list of members who have been with you for 90-120 days and whose work out habit degraded after their first month.
  2. If any of these members didn’t complete the free fitness screening you offer during on-boarding, schedule a time with them,
  3. If in their first month they tended to work out Mon-Fri at lunch or before/ after work, let them know what programming you have that fits their schedule,
  4. If they used kids club in the first 30-60 days, let them know what new programming you have for kids (make their kids happy and they’ll be happy).

Attrition isn’t just in the first few months. Our analyses of various clubs suggest that there are later danger points.  Exactly when varies depending on several factors – dues level; club culture; target audiences.  But 12, 18, and 24 months out, some members will get restless.  Again, it is often possible to identify and group these people.

It can be especially enlightening when you identify groups of people who seem similar in many ways, but one group terminates at a higher rate.  Subtle differences between these groups can lead to exciting retention programs.

For example, long-term members working out more than once per week tend to have much better retention than those working out only once per week. Therefore we recommend that you create programs to encourage the “once a week” to become “twice a week” and try to get the ones working out twice per week up to three times per week.

Although you may have a very large group of long-term members who aren’t using the club at all, we recommend focusing on the members who are working out at least once a month. This is both cheaper than focusing on members who haven’t worked out in months (there are usually lots of those members) and more likely to be successful because you are focused on members already working out.

Here are some steps you can take:

  1. Find out what time of day they come in and let them know about other programming at those times on other days,
  2. Let them know about events your club is involved in within the community (races, outdoor classes…),
  3. Ask them to provide input on programming they’d like to see (sometimes simply asking for their opinion helps them engage…and may give you some new ideas).

Remember, this is a long run – not a sprint. One size does not fit all. But you will have a dramatic impact on retention if you take the time to understand and target the natural segments in your membership. Creating programs geared to them will pay off. Combine this with an understanding of your most valuable members will let you create targeted pilots using your scarce resources to the get the greatest benefit for your club and for your members’ health.

Please share any questions or comments with us!