Of course, the larger the number, the more successful the service has been at generating and retaining its customer base to ultimately drive income.
However, the overall member numbers is just one part of the equation and we like to work with our clients in this sector to understand other success drivers, such as;
The number of new members in the month / period. Is this in line with budget, previous months, last year etc.
The measurement of the right activites that generate new customers and retains the existing. For example, number of prospect meetings, number of inductions in the first week for new members or the number of programme reviews for existing customers.
Weekly Usage is an engagement measure to establish how frequently customers are using your product or services within a weekly period. The more engaged your customers, the more likely they are to remain using your services, so this is a metric we encourage clients in this industry to watch closely.
Your Churn rate is essentially a method for calculating your customer retention. Churned customers are those which stop using your product or services during an allotted period of time. Therefore, measuring the rate at which your customers churn allows you to identify how effectively you are retaining revenue short and long term to aid future growth.
If you have memberships of different levels and different values, then how is the split? Are you retaining the higher paying or most profitable memberships at the rate you desire? If not, is there a reason? Are you providing the differentiation in value that the tiered membership indicates or is the experience really the same for all, despite the membership level, hence impacting on the recruitment or retention at certain levels of membership?
If you lose customers, then knowing When, Why and How can make a big difference. For example;
- When – Do you lose them in month one or month twelve or another. It is likely that you can link their different motivational drivers at the different stages of their lifecycle with you as a customer. For example, do new members leave as they have not gained the motivation needed? Do older customers leave because they got bored or lost sense of the value?
- Why – Of course, this is useful information beyond just the financials for your business. Knowing why gives you the opportunity to fix the potential issue. You can also use this information when creating realistic financial forecasts for your business.
- How – By phone, email, visit or simply a direct debit cancellation? What can you do to reduce the number? Can you make it a policy of cancellation to visit the premises? If the majority are by phone, are they put through to someone to discuss with retention in mind or is the cancellation just accepted by the receptionist? If they cancel the direct debit, again do you accept the cancellation or proactively make contact with an offer to continue?
The obvious measure is to simply monitor membership numbers, but the benefit is in the detail. Understand what drives your business success, monitor these areas of performance and establish ways to improve them step by step.
Here at CRM, we specialise in working with businesses in the Health and Fitness industry. If you would like to discuss your business or idea in more detail, then please do not hesitate to contact us.