The “North Star” Client Retention Metric You Might Not Give Enough Attention
Nine percent: That’s the industry average for monthly client churn according to data released by the popular client management software company PushPress.
As for CrossFit-specific gyms, that number sits at 7.63 percent, meaning the average gym with 100 members loses between seven and eight members each month.
Ok, so why does this matter?
Harshly put, client churn is the “silent killer,” explained PushPress founder Dan Uyemura.
Consider this: Let’s say you’re a gym that charges $200 a month, and you’re generating 20 leads a month and converting 50 percent of those leads into members.
When we look at the math of churn, under the above circumstances, if you’re churning clients at nine percent, you’ll generate $20,000 in revenue a month, but if you improve your monthly churn rate to four percent, revenue jumps to $50,000 a month. Thus, a five percent churn improvement—from nine to four percent—results in $30,000 more in monthly revenue.
- “Imagine if you got your gym to two percent…You would be a million-dollar gym,” Uyemura added.
So how do I fix my churn?
While there’s never one way to do it, and no quick fix, per se, Uyemura said there is one very powerful metric that has a huge impact on client churn: Client check-ins.
In short, when you create and enforce a culture where clients register and check-in when they attend your gym, client retention improves significantly. In this sense, client check-ins are a quiet “north star metric,” Uyemura said.
- Checking in “creates a culture of focus,” that keeps people accountable to their commitment. “You need to engineer experiences that reinforce the actions you want them to take,” Uyemura said.
What the data says: PushPress data shows that when a client comes to the gym just once a month, they have a 20 percent chance of churning the following month, Uyremura said. On the other hand, when a client comes to the gym 12 times a month, there’s only a two percent chance they’ll quit the next month.
- Worth noting: Three days a week, or 12 times a month, is the sweet spot, so to speak. If a client comes more than 12 times a month, their chance of quitting is essentially the same, but if attendance drops below 12 times a month, the client’s chance of quitting increases significantly as their attendance decreases.
- “Between 12 and 22 (check-ins) doesn’t matter. So I would almost encourage my gyms to sell a three days a week membership, not unlimited, so you can maximize the number of people who go to the gym,” Uyemura said.
Another CRM Rings in
Dustin Bosscher, the owner of a new client management software company StreamFit, has a similar perspective to Uyemura: When it comes to client retention, attendance matters most. And the best way to ensure people are showing up is to have them check in.
- “The true value for a gym membership comes when people put in the work and see the results (which) comes down to how committed you are to coming in the first place,” Bosscher said.
And when you get them tracking their attendance through check-ins, it “creates accountability,” he said. “Having your name there sets a precedent that you are coming and it allows the coaches to reach out when you are not there, to check on you.”
One Big Thing
When clients check in via your software, it makes it easier for a gym owner to track the client’s attendance, which is the key to improving it, Uyemura explained.
- “You can’t grow what you can’t track,” he said.
When you create a culture of checking in, you no longer have to ask yourself, “Who haven’t I seen lately? Who should I check in on?” Instead, you can set up your software to automatically reach out to clients who haven’t been to the gym in 10 days to check in on them (or you can reach out manually).
This is especially important as your gym grows and it becomes more challenging to keep track of your members, explained Jon Rowley, the owner of 2020FIT in Prairie Village, KS.
- “Ten years ago, I knew everyone’s name, their dog’s name, their kid’s name,” he said. “I knew everything about every person that was at our gym. As we have grown, we have had to use systems to keep that small feel intact.
Today, with 550 members and 15-person classes, Rowley said getting his clients to check in is an important metric that helps him both keep track of and take care of his clients.
Further, when clients are showing up regularly, you can use check-in data to celebrate their attendance milestones.
- “You can create moments where you can be like, ‘Dude, you have been to the gym 500 times. Here’s a free hoodie. Or, you get the best parking spot for a month,” Uyemura said, adding that this helps people recognize just how far they have come.
- “And this is where it comes full circle,” Uyremua said, as your members then realize your gym is part of their identity, that they belong there, and that they want others in their lives to experience it.
Creating this type of culture can happen organically, “but it will happen three times better if you’re actually fostering the environment that can make it happen,” Uyemura added.
The bottom line: Gym owners don’t pay enough attention to churn. If they did, they’d be a lot more successful, and it starts with creating a culture of checking in.
- “As a gym owner we feel like we have 100 things to do and we’re focused in all these different directions which causes a lack of focus,” Uyemura said. But when you sit back, you realize, “everything I need is in the gym already.”
“It’s just so much easier to take care of your customers and grow from inside out, as opposed to trying to grow from outside in,” he added.