Did you know that increasing customer or member retention rates by as little as 5% can lead to a 25% to 95% increase in profits? It’s of course more expensive to acquire a new member compared to keeping a current member, but it can range anywhere from 5 to 25 more times expensive! [1]

Leads are great and sales are even better for any boutique fitness studio, but if your members aren’t sticking around then you’ll quickly find yourself on the hamster wheel of stagnant growth, constantly racing to replace churned members with new ones.

Instead of being reactive, what if you had a system to predict which members are the most likely to churn and a playbook for retaining them before they do? Good news, that’s where the Churn Prevention Playbook comes in. The goal of the Churn Prevention Playbook is to give you a framework for identifying members that could cancel their subscriptions, build a strategy to retain them, and in turn increase revenue.

First, let’s define churn and churn rate.

Churn measures the number of members who cancel their membership with your studio in a particular time period—typically measured by month, quarter, or year.

Churn rate is simply the percentage of members who cancel their membership with your studio in a given period—to calculate it, you take the total number of members who canceled during that period and divide it by your total number of members at the beginning of the period.

We can divide the Churn Prediction Playbook into two major parts:

Part One: Audit and Segmentation

Part Two: Elevating the A-Team

Audit and Segmentation

First things first, not all of your members are the same—this sounds obvious, but think about it, are you treating all of your members the same way? The answer is more likely to be a “yes” than a “no”. The truth is that treating all of your members equally means that you might be pouring time and energy into members that are never going to fully buy-in to the studio community and culture you’re trying to build, and simultaneously you may be under-serving members who are happy to rave about you if presented with the opportunity. 

In this step we need to do an audit of your studio members (only those on Autopay or unlimited recurring memberships) to determine which of four segments they fall into:

Red Segment: Showing up 2 or fewer times per week, equivalent to 8 or fewer visits per month.

Yellow Segment: Showing up 3 times per week, but inconsistently, equivalent to 10 or fewer visits per month.

Green Segment: Showing up 3 or more times per week consistently, equivalent to at least 12 visits per month.

Purple Segment: Showing up 4 or more times per week consistently, equivalent to at least 16 visits per month—lifers who share their studio experience with friends and family, they are happy to leave a testimonial or review and are the core of your studio community.

This audit will take some time, but it’s crucial to build out these segments because your biggest opportunities for preventing churn are moving members from the Yellow Segment to the Green Segment and from the Green Segment to the Purple Segment—we call this “Elevating the A-Team”.

Elevating the A-Team

Yellow Segment to Green Segment

There are four key activities to this process:

  1. Review any and all notes that you have on these members from back when they were lead and had not yet committed to becoming a member. Review why they joined, how they measure success, and what their goals were.
  2. Reach out using a multi-channel communication strategy—send them an email to do a quick check-in and gauge what their satisfaction level is, but also follow-up with a short  text, or a direct message on social media referencing your email if they haven’t responded.
  3. Re-sell the vision that that initially committed to by finding out what’s currently going on in their world, has anything changed? Is there still a gap between where they are and where they want to be? Why did they buy a membership, are those reasons still a priority for them? Or is there something new that they’re working towards?
  4. Reset milestones for success. Define a time period, maybe the next 90 days, and add accountability to the follow-up. Let them know that your team can’t do the work for them, but you’re there to coach and provide all of the resources that they need—you just need a commitment and milestone(s) to hold them accountable to.

Green Segment to Purple Segment

These are the three key activities to elevate your members from loyal to lifer status:

  1. Engage your members with super targeted messages that show them that you care about them as human beings. Did someone start a new job? Ask them how it’s going and if your studio’s class times are still working for them. Did someone just come back from a trip? Ask them how it went and if they felt like they had more energy because they were crushing their in-studio workouts leading up to when they went away. The talking points are endless, the key here is making the time to have these conversations.
  2. Incentivize these members to spend more time and money in your studio and with your community over time. Discounts, t-shirts, small prizes, big prizes, shoutouts on social media, rewards for attending social events, exclusive perks that are only available to your most loyal members—special lockers, preferred class times and pre-booking windows. What would a 5-star experience look like? Brainstorm ideas with your team.
  3. Recognize your best members. Not to get too sentimental, but people will always remember how you made them feel, this is of course no different for your members. What are you doing to recognize your best members and acknowledge their efforts? How often are you doing this? Make your best members feel special, because they are. They represent the core of your community—their energy, enthusiasm, and loyalty will drive studio growth.

The last step of the Churn Prevention Playbook is to continuously test, learn, and repeat these processes—churn can never be too low.

Schedule a call with one of our growth specialists if you would like to learn how we can automate this playbook for you and even provide advanced churn prediction so you know exactly which of your members need immediate attention.

[1] Gallo, Amy. 2014. "The Value of Keeping the Right Customers". Harvard Business Review Blog. https://hbr.org/2014/10/the-value-of-keeping-the-right-customers.