Being around the industry for a while, I’ve seen a lot of trends.
Groupon. Bootcamps. “Free” challenges.
What I’m seeing now with gym owners is their obsession over metrics. Don’t get me wrong, you need to know your numbers. That’s non-negotiable as a business owner. But measuring numbers just to measure them and focusing on the right metrics are two completely different things.
Most gym owners I’ve talked with are obsessed with leads.
And I get it. In your mind, you always need more people in your programs. The only way to get that is to get more people in the front door.
Leads are important. We need them. But let’s do some quick math.
Say you get 20 new leads a month. This might be someone inquiring about your services, joining your email list or even just someone you chatted with at a local networking event. 20 is less than one new person a day so that should be achievable.
Next, let’s just say you convince 10 of those people to come in and try out what you have to offer. 5 of them think you’re the solution for them and sign up for a membership.
If you do that consistently, you’ll have 60 new members every year.
If you’re like me, you run a premium gym so you don’t need that many members to make it successful. In fact, I bet you only need 100-200 clients to run an awesome business.
If you’re getting 60 new people every year, within a year or two (at the VERY most) you should be filled up.
It’s a simplistic view but hopefully, it gets the point across. Leads are great and necessary but I honestly don’t think it’s the most important metric in your business.
Most gym owners are chasing lead after lead instead of focusing on the most important metric:
RETENTION
You see, I could up these numbers until I’m getting 10 new members a month, but if I’m losing 12 every month, my business is going to suffer.
Most business owners know deep down that retention is important but it never gets focused on.
Why is that? I have a few ideas…
1. Retention isn’t sexy!
Simply put, retention isn’t sexy. Leads are sexy. Talking about the newest and greatest online lead generation strategy gets your juices flowing. You feel like you’re doing something great for your business by growing it. You feel productive bringing in leads.
Retention feels like it happens naturally. You don’t go to conferences and learn the newest retention technique so why focus on it?
2. Most of us overestimate our retention
Talk to any gym owner and I guarantee they’ll overestimate their current retention numbers. Why? Because we all think we’re the best at what we do.
“Once I get them in the door, they stay with me forever!” Ever heard that from another coach? I hear it all the time.
Admitting that our retention isn’t great feels like we’re admitting we don’t have a good product. Or that we’re not great coaches. While this isn’t necessarily true, it’s not something any of us wants to admit.
3. Retention is tough to measure
I honestly don’t think most coaches know their retention numbers because it’s tough to calculate. Scheduling software doesn’t have great retention reports so we’re left guessing most of the time.
While it might not be a perfect way, start by taking the number of existing members minus new leads, divided by the number of members last month. It’ll get you started with tracking your numbers.
The Impact of Retention
Ok, so you now understand you should be focusing on retention but how is that going to actually impact your business. Again, just do that math.
Let’s say your average client spends $250/month with you. If a client usually stays with you for 6 months and you up that average to 9 months, that’s $750 per client. I don’t know of any business owner who doesn’t want an extra $750 per client in their business.
Let’s even look at it a different way. Before Doug Spurling started using Coach Catalyst in his business, he had a 92-93% retention rate. Not too shabby!
But simply by using CC to improve their communication, connection, and accountability with their clients, they bumped that up to 96%!
It was only keeping an additional 6-8 people per month but that simple tweak added over $1800 of additional revenue per month to his business.
Without generating new leads. Without fighting facebook new algorithm. It’s simply building a better community, keeping your clients accountable, helping them reach their goals and keeping them in your ecosystem longer.
If you need a boost in revenue, yes new leads are great. But start your focus with what you already have - your existing clients. Focus on retention, keeping them around longer and your revenue will grow.