With the explosion of the fitness studio market, online training, and other sectors, it’s important to note that some basic business principles will remain unchanged; however, the member experience and its impact on member loyalty will always be what differentiates those that thrive from those that struggle.

There are a variety of measurements that studio owners can and do use as indicators of success and, surprisingly, some might not be typical key performance indicators (KPIs). The following lessons learned have been pulled from the Association of Fitness Studios’s (AFS) industry-leading market research reports and will focus on what impacts your retention from the experience your members receive, the importance of a routine maintenance schedule, and ultimately, how to price yourself accordingly.

Average Retention Rates

Anyone working in fitness has heard the words “attrition” and “retention.” Attrition is the rate at which members drop out and is calculated by dividing the number of members who resigned by the total number of members. Retention is the flip side - how many stay with you. It’s these benchmarks that ensure you’re moving your business forward.  

Traditionally, fitness facilities have suffered mightily with retention hovering in the mid-60% range with several old adages playing out:

• They work so hard to get members in the front door only to see them go out the back door.
• It costs 3x as much to acquire a new member than to retain one.
• Over 80% of studio members frequent other facilities.

The International Health, Racquet & Sportsclub Association (IHRSA) reports that the average retention rate for its member clubs is 71.4%. One can argue that IHRSA member clubs tend to be the best-performing in the industry, therefore, the national retention average is likely much lower.

According to the Association of Fitness Studios (AFS) the average studio retention rate is 75.9%, significantly higher than the best performing traditional health clubs. And among this group, personal training studios enjoy a lofty 80% retention rate – likely due to the more personal nature of their customer experience.

Group exercise facilities also fare well, retaining 73% of their members. This is impressive given the proliferation of group exercise options for consumers in the past few years.

4 Areas that Impact Retention

You can essentially attribute the retention of members to four key areas:

Providing a clean and intimate physical environment. Nothing will have your members heading for the exits faster than a dirty, smelly, undesirable hygienic environment. It may seem obvious but maintaining a focus here goes a long way toward having members looking forward to their trip to the gym. Ensure that everyone who walks through your door is greeted with a positive, inviting sensory experience, and, to state the obvious – especially in restroom, changing rooms, and locker rooms.

Providing personalized coaching and instruction. One of the primary reasons your members are your members is that you offer a more personal customer experience than what they believe they’ll get at the traditional health club, or the studio down the street. This personalization must become ingrained in your brand promise. People want to know that you care about them. Work with your team to create programming and assessment tools that focus on progress. Take it a step further and reach out to your members to see how they’re progressing and offer tips to support them.

Create a tribal community. There is the old saying that people will quit a company but not a relationship. It is vital to create a community among your members. This can be done in numerous ways, including:

• Creating an assessment process for each new member
• Offering a free boot camp on Saturday mornings
• Social gatherings after a class or in the evenings
• Special fitness events

When asked why he felt he was so successful despite the presence of several close-by big box players, one studio operator said, “Our customers know we care about them, and they also care about us.”

A tightknit community breeds the feeling that together you can accomplish anything. By creating that atmosphere, you and your business become authentic, and your mission to change lives and deliver results become transparent.  This becomes your tribal community – those members who feel they belong to you, your studio, and each other. This community is the key to your success because it impacts all phases of your business: acquisition, retention, customer loyalty, and referrals.

Find your niche. There is competition. Figure out what you want to do best and be the best at it! One studio owner likened this approach to finding your “only’s”. Are you the only studio that offers nutrition counseling with training? Or the only studio with an on-site physical therapist? Find your niche and focus in on what makes you different. Walt Disney once said, “Whatever you do, do it well. Do it so well that when people see you do it they will want to come back and see you do it again and they will want to bring others and show them how well you do what you do.”

Preventive Maintenance

Sometimes preventive maintenance can be overwhelming depending on the size of your facility and whose responsibility it is. Nonetheless, simply break it into a couple of key areas, and you’ll have your bases covered.

• Daily. Basic maintenance each day means creating a “photo ready” picture which helps create consistency. Wiping down all equipment and cleaning floors should be also done at least a few times each day. Build it into your schedule, create a checklist, and if you have other team members, build it into their daily list of priorities. Nothing is worse than doing a plank and a bunch of dust blows by your face. It’s these small things that all lead to a positive member experience.

• Weekly. Your equipment needs to be reviewed and cleaned often. One studio owner created a checklist of each and every piece of equipment. From there he could determine what items on the machine needed to be watched or replaced. This can include loose pieces, squeaky rods or wheels, missing pieces, etc. It’s a good idea to clean under your cardio equipment, especially treadmills, which can be lifted and vacuumed.

• Quarterly/Semi-annually. Use this time during the year to focus in on paint touch-ups, upholstery updates, and larger projects which typically need more time to plan.

Note: If you have items of equipment that are used more frequently (i.e. you have 25 Spin® classes per week) you may need to check equipment more frequently than once per week.

Pricing Models

When it comes to pricing there’s no silver bullet. There isn’t one price that’s ultimately right for everyone, and therein lies a challenge for the fitness studio owner. Many times your square footage will dictate what you offer, as will the market you’re in and the services you provide.

As shown in the graph below, from AFS’ industry leading Financial and Operating Benchmarking Report, pricing is as much art as it is science. Furthermore, pricing is influenced by the competitive landscape and how well your studio’s product is differentiated from its competitors.

An important factor to consider when setting your pricing is how your members and members will perceive the value they get from the price they pay. If you price yourself high, you have to ensure you deliver the best experience possible.

On the flip side, if your price yourself too low, what message does that send into the community about the results you deliver?

One way to create consistency is to develop what’s known as an integrated revenue model or pricing layers. This model allows members/members the ability to upgrade and personalize their experience by paying for the membership that appeals most to them.

Types of Layers

• Simple Access (work out on your own)
• Team Training/Large Group Training (boot camp – 20 to 25 people)
• Small Group Training (less expensive personal training option, 2-4 or 3-5 people at a time)
• Private (one-on-one training)

Examples

• Simple access to the equipment costs $39/month.
• A layer would be to add team training on top of simple access for $99/month. (Team training sessions could be offered eight to 12 times a week)
• For $139/month, the customer gets simple access, unlimited team training and unlimited small-group training
• For $249/month, a member gets all previously mentioned benefits, plus five one-on-one sessions per month.

Conclusion

The fitness industry is an exciting place to be with new opportunities at every corner! Make sure to stay competitive and be in the know when it comes to valuable lessons you can apply to your business.