OPERATOR NAME: Mid Sussex District Council/Freedom Leisure
SECTOR: Public Sector
MEMBERSHIP SIZE: >3000

Retention…3 Great Reasons to Care!

After a year of partnership working between Mid Sussex District Council and The Retention People (TRP) we can verify three fantastic reasons to focus on improving retention.

1. Happy Staff!

Traditionally, it has been very hard to precisely value the contribution of our fitness teams. Some operators have even shown that they feel they can simply get by without them.

Working with TRP identifies and measures the value that fitness teams add. This enables regular feedback to instructors showing how many people they have helped – and even more importantly – how much they have helped them.

Imagine you are reviewing conversations you had with over 500 members in one month. In the month before you spoke with them, the average member in this group was only attending your centre 2.7 times per month – significantly less than once per week. However, after you spoke with them, the average attendance increased to 5 visits per month.

These numbers are not made up! Figure 1 shows this is just one of the many fantastic results we could feedback to the team at Mid Sussex.

Figure 1 Average visit frequency pre and post interaction – based on 500+ interactions in September 2009

“Results like this made my team feel recognised and appreciated and so inspired them to look after even more members”, comments Chris Patch, Fitness Manager with Mid Sussex.

2. Happy Members!

The easiest way to assess member satisfaction is to observe their participation levels. Figure 2 shows clearly that the more we talk with our members – the longer they vote with their feet and remain as participating members.

This translates to at least 12 months more participation per member who receives at least 4 interactions. Members who do not receive an interaction are 3.4 times more likely to cancel compared to members who receive at least 4 interactions during the life of their membership. Happy members means increased participation and footfall.

Figure 2 The effect of interactions on member retention

3. Happy Managers

It is only a small step to realise that at least 12 months more membership participation equates to at least 12 months more membership income. If all members who joined during the year of this study followed the green line (4+ interactions) Mid Sussex would earn £281,449 more in that year when compared to all those members following the blue line (no interactions).

The Future of TRP at Mid Sussex

As the first year of this partnership ended, the contract for the management of the leisure centres at Mid Sussex was taken on by Freedom Leisure. As a result of the fantastic results to date, TRP remains a key part of service delivery at Mid Sussex and has since been installed in three other centres managed by Freedom Leisure.

Debbie Reed, Customer Service and Retention Manager for Freedom Leisure comments that “it is fantastic to think that by focusing the team on our high risk members we can increase job satisfaction, increase participation and increase our bottom line by nearly £300,000 in year 1”.

OPERATOR NAME: Westpark Fitness
SECTOR: Private Operator
MEMBERSHIP SIZE: >3500

Proof not Promises

As one of Ireland’s premier clubs for over 18 years, Westpark Fitness felt it was critical to work with a supplier of retention solutions with a proven record of success. The Retention People’s (TRP’s) ‘Proof Not Promises’ ethos underpins the company’s approach to providing operators with solutions that not only retain more members, but also allow them to refine their business practices to improve performance on an ongoing basis.

Identifying the Problem

With competition increasing from other clubs opening in the area, Westpark were keen to ensure that they addressed retention and service as effectively as possible. Kevin Doyle, Club Manager, had implemented a number of initiatives to promote interaction with members, including sending text messages and regular gym challenges. Whilst proactive, the impact of these activities on retention was not measurable and it was not clear whether resource was being targeted in the right place.

The Recommended Solution

Westpark Fitness purchased TRP Identify, TRP Interact and TRP Coach to overcome the issues described above. The software enabled the club to identify members ‘at risk of leaving’ and then deploy fitness staff to interact face-to-face with them. Recording each interaction provided management with an instant overview of the fitness team’s activity where they knew their efforts would count. Monthly reports sent out by Westpark’s TRP Coach proved the positive impact, showing clear improvements in member visit frequency following the interactions. TRP Mobile provided further assistance to the team, allowing instructors to record a greater volume of interactions on hand held devices on the gym floor.

Return on Investment

To assess the impact of the solution on retention over the first 12 months of use, TRP asked retention expert Dr Melvyn Hillsdon to analyse Westpark’s database and produce an audited retention report. Figure 1 clearly demonstrates the positive influence of timely face-to-face interactions.

Figure 1 Retention rate by interactions

The blue line shows that members who do not receive a proactive interaction throughout the course of their membership cancel rapidly; by month 5 half have already left the club and only 29% are still paying by month 12. In marked contrast, the red line shows that if members are interacted with when identified as high risk by the TRP solution, 80% are still paying at month 5 and 56% at month 12.

Figure 2 demonstrates the financial impact of this improved retention by factoring in the €44.00 per month average membership dues. Dr Hillsdon concluded that if all members joining after installation received at least 1 interaction, the estimated income over 12 months would be €313,602 higher compared to the same number of members receiving no interaction.

Figure 2 Income estimates based on retention rates for the members who joined during the study paying €44.00 per month

Customer Comments

Westpark Fitness’ board and management were clearly delighted with this level of ROI and took the easy decision to renew the TRP contract. Kevin Doyle comments “I have always been a firm believer in the theory that if you cannot measure it you cannot manage it. TRP’s clear and accurate reports coupled with the support and advice from our TRP Coach has made the TRP system a valuable tool in our fight to improve retention. We all know it costs more to find a new member than keep an existing one, this system backs this theory up and has made a substantial difference to our bottom line.”

OPERATOR NAME: Doncaster Dome
SECTOR: Leisure Trust
MEMBERSHIP SIZE: >3000

Low Cost Membership and Quality Service. Impossible? Not with a strong retention strategy.

When budget clubs entered the UK marketplace, the industry appeared to have two options. Either compete on price by cutting your staff – and inevitably your service – or justify a higher price with higher service. Kraig Kelly, Operations Manager at The Doncaster Dome saw a third possibility. Through 2009 he would cut his prices to below that of his competition yet still offer superior service.

How?

Kraig had already worked with The Retention People for a year so knew that managing the way his staff interacted with members made him thousands of pounds. He also knew his market would respond positively to a lower price.

By working in partnership with TRP and gaining a greater understanding of retention, he also knew he needed a multi faceted approach if he was to succeed.

Kraig says, ‘cutting the price of our membership for the 2600 members we had at the time was a huge gamble – my neck was on the line! I only had the confidence to do this as I knew I would retain more members as a result of our retention strategy.’

Reduce the Price

Kraig reduced his price from an average £30 per month to a simple monthly fee of £22.50 with a 12 month contract or £27.50 without.

Introduce Membership Contracts

TRP’s analysis added to Kraig’s understanding of underlying retention at The Dome so he was able to determine the exact price point at which to launch a 12 month contract.

Improve the Induction Process

Kraig, like many operators, knew the first few weeks of membership were vital so purchased TRP Induct. Delivered on behalf of TRP by Dr Paul Bedford, this combination of training, process support and software dramatically improves retention.

Deliver Fantastic Service – by Managing Interactions with Members

The team at The Dome already had a year of experience managing staff interactions with members through TRP’s retention solutions. The challenge now was to set and deliver even higher targets for both the quantity and quality of interactions.

Refurbish the gym

Following a successful 2008 – and funded in part by improvements in member retention since working with TRP – the 8000 square feet (750 m2) of the Fitness Village was completely overhauled and turned into a stunning, contemporary health club.

Results

Kraig provides the best summary of the results, ‘The project has been fantastic. We have seen membership increase by over 600 to a total over 3200; our DD line is higher than it has ever been and we are retaining members for longer than we have ever done before.’

As the first year of the project came to an end, analysis by TRP was able to demonstrate the effect of the various strategies:

• The overall retention rate improved for members joining in 2009 compared to those joining in 2008.
• Members who were interacted with at least 4 times during their membership remained at the club 18 months longer than those with no interactions (see figure 1).
• Interacting with members was more important than both contract length and visit frequency in determining length of membership!

Figure 1 The effect of interactions on member retention

Conclusion

By combining proven retention strategies from TRP with The Dome team’s skill and experience, The Dome have successfully shown an alternative route to success – low prices combined with fantastic service.

OPERATOR NAME: DCU Sport
SECTOR: Education
MEMBERSHIP SIZE: >4000

Proof not Promises

A critical part of The Retention People’s (TRP) ‘proof not promises’ philosophy is to conduct rigorous fitness industry research and then apply the knowledge gained to help clubs improve their membership retention. This appealed to Dublin City University’s own mission and strategy; ‘to sustain state of the art facilities and to provide sport for all in a welcoming and professional environment while helping all of our stakeholders to achieve their goals’.

Identifying the problem

DCU Sport recognised that, like many operators, they were not making the most of their fitness team who had much more to offer if motivated and managed more effectively by using the TRP Solution. DCU Sport already recruited the majority of their members on one year subscriptions and were therefore looking for a solution that complemented this contract period to enhance retention, particularly of their public paying members.

The Recommended Solution

DCU Sport purchased TRP Identify, TRP Interact and TRP Fitness and initially focused on using the workout tools to computerise the writing and monitoring of members’ programs. After using the solution for some time and consulting their TRP Retention Coach, DCU Sport opted to refocus their usage on TRP Interact to significantly increase the number of recorded interactions with members. Ken Robinson, Chief Executive of DCU Sport, was determined that, together with TRP Fitness, this would provide a more cost effective use of the team’s time.

Return on Investment

DCU Sport had been using the solution for over 2 years before retention expert Dr Hillsdon analysed their results, focusing particularly on the impact of member interactions on retention.

Both lines in Figure 1 show the dip at 12 months, characteristic of a club with a large proportion of members with 12 month contracts. However, the red line shows that more members who are interacted with reach the end of their 12 month period, and more then go on to renew their membership and so enter a further 12 month contract.

This clearly has a positive financial impact which is plotted in Figure 2. The difference between talking with members when they are at high risk of quitting and not talking to them equates to an additional £129,665 per 1000 members over the 30 month period of analysis (assuming £35 per member, per month).

Customer comments

Like all operators, DCU Sport face the challenge of keeping staff focused and motivated on activity to improve retention. Ken Robinson says, ‘while this is always going to be a challenge, the beauty of the TRP solution is that it provides a regular focus for the team, enabling us to successfully motivate and reward them’.

Feedback from staff

Irina Podinoghina, Wellness Consultant at DCU Sport says, ‘TRP helps us to focus on talking to the right people and gives us the confidence to approach them. It’s great to see the regular feedback that demonstrates how well we interact’.

OPERATOR NAME: Avalon Leisure
SECTOR: Public, Multi Site
MEMBERSHIP SIZE: <3,000

Proof not Promises

“Proof, not Promises” is not a marketing slogan it is The Retention People’s whole philosophy. Membership retention is a complex issue and we believe good operators will only make decisions based on facts.

As part of our commitment to ‘Proof not Promises’, we believe in providing statistical evidence to back up our claims of clients achieving a return on investment in our solutions. Avalon Leisure is a private management contractor operating in the public sector and manages facilities on behalf of Mendip District Council and Somerset County Council. We’re very pleased to have demonstrated that their retention system has paid for itself twice over in year one; with projections showing a return of twelve times the ongoing management costs for year two and beyond. Clearly, for Avalon and ourselves this has been a huge success story.

Identifying The Problem

Despite reasonably successful sales year on year, Avalon Leisure were struggling to increase the membership base across their facilities. The Retention People were brought in to address the growing concerns over cancellation rates. After reviewing operational procedures and performance of the facilities The Retention People put together a proposal for a package based on achieving a 12 month return on investment. Avalon Leisure could see the necessity of addressing the problem and the lucrative rewards however didn’t have an official retention budget. This was secured by presenting a strong investment case put together by The Retention People to their Local Authority clients to gain funding for their retention programme.

The Recommended Solution

One of the main aims was to be able to provide an easy to implement and centralised solution that would provide staff across all sites with the tools to help them motivate their members. Providing them with clear management information against staff performance criteria was also a priority. A package consisting of The Retention People’s powerful and centralised Retention Manager software was put in place to help staff proactively identify and interact with members which were at high risk of cancellation. As the system is centralised, management can pull off information of staff performance on any one member of staff from any one site at any one time. This system together with a comprehensive staff interaction training package and ongoing target monitoring and coaching ensured Avalon Leisure gained a rapid return on investment.

Return On Investment

The Somerset based leisure management company installed The Retention People’s software solution in July 2006 and over the following year, conducted a review of members ‘stay’ rates (comparing the average length of membership pre-installation with that of post- installation). The study demonstrated that members were staying on average up to 2.6 months longer than the previous year.

• Length of stay at Wells increased by 0.5 of a month.
• Length of stay at Strode increased by 0.8 of a month.
• Length of stay at Frome increased by 2.6 months.

It is possible to place a financial value on the impact of The Retention People’s solution by calculating the value of the additional membership length. For Avalon Leisure, this equated to £49,000 in the first 12 months across the 3 sites and is projected to return a similar amount year on year.

Customer Comments

“However, the biggest benefit at the three sites in Frome, Wells and Strode”, says Peter Gilpin, MD of Avalon Leisure, “is the shift in culture toward a more customer centric approach from staff. The systematic approach we now use toward membership retention by using The Retention People’s system means we can target our efforts to the customers we know need our help the most. Clearly this has a benefit to the customer in improved levels of service but also has a very positive affect on our bottom-line”.