Boost Your Gym’s Profits: Expert Tips on Increasing Gym Member Retention

Let’s say your dream is to run the most successful gym in your area. You might then be wondering what the winning combination is for this. Maybe you are wondering what the hot new trends are, how you should make sure your clients stay or maybe you really want to find out how to see if your hard work is really visible in the numbers. These are all key questions to ask yourself if you want to be number one!

After reading this article, you will have tips and concrete tools for:

1. Calculating gym membership retention
2. Ways of increasing gym membership retention
3. Increasing gym membership retention through group heart rate monitoring.

So what does retention mean in gyms and how is it calculated?

Simply put, loyal customers are far more valuable to your business than new ones, meaning that these returning customers are bringing you larger profits than new members. But what does retention mean in practice?

Gym membership retention refers to the percentage of members that have stayed with your gym or studio for the past 12 months. It might seem as easy as dividing the total number of canceled memberships with the total number of memberships at the end of the year.

Calculating retention rates should, however, not be confused with attrition rate. Attrition rate refers to an opposite number to the retention rate, meaning that attrition rate can be defined as the percentage of members who have canceled their membership over a specific timeframe.

How to calculate gym Member retention rate

Here are two simple methods to calculating your retention numbers:

Method 1

Start off with a 12-month period and check the amount of monthly memberships for each month. This is easily done by using the equation below:

Previous month’s beginning membership + number of sales in previous month + number of reinstated (unfrozen) memberships.

• Subtract the number of frozen and canceled memberships
• Add together the canceled memberships for the last 12 consecutive months.
• Total the beginning monthly memberships for the last 12 months and divide this number by 12 to receive the average monthly memberships
• Add up the number of canceled memberships for the past 12 consecutive months. Divide this number by the number of average beginning monthly memberships received in the previous step. This result is your annual attrition

For annual retention: take the result of step one and subtract it from the annual attrition.

Method 2

Another popular formula for calculating the retention rate for your gym or studio is the formula below:

((ME-MN)/MS) x 100

            ME = Members at the end of a time period

            MN = New members acquired during a time period

            MS = Members at the start of a time period

For example: If you start off with 100 members in your club’s first month, and factor in the 15 members who canceled their contracts and  the 20 new members, then you are left with 105 members at the end of the month. Utilizing these numbers above, your equation should look like this:

((105-20)/100)) X 100 = 85 percent of your members are still active.

Which formula you use is not relevant. What is relevant, is the attention and care you place on holding on to your current members.

So what can you do to improve your gym member retention strategy? We’re getting into it. Read on. 👇

Maximize your gym Member retention Strategy

This is as obvious as it gets: holding on to your members is crucial for a successful gym. Making sure that you stay on top of things constantly and do not give your clients reason to stray to other gyms is no simple task.

You might now find yourself thinking, “Well  if it is so complex, then why should I put time and effort into it? I can always find new customers”. Multiple studies have shown that holding on to your existing clients is miles more cost efficient than finding new ones.

In addition, creating long- term relationships with your clients opens a multitude of doors for building the relationship further. Plus, if you don’t constantly work towards providing fruitful and engaging experiences for your clients, someone else will.

From celebrating milestones, to providing fun and social gym classes, there are many tactics to increase your gym retention rate. We’ve compiled the best nine (+1) in our eBook 9+1 Tactics to Maximize Your Gym Retention Strategy. You can download right here.

Please note that the information provided in the Polar Blog articles cannot replace individual advice from health professionals. Please consult your physician before starting a new fitness program.