If I keep a member for 6 months, they will be here forever.
— Average Gym Owner
If I had a dollar every time I’ve heard this over my 13 years in the boutique gym ownership space, I could easily buy myself rountrip airfare to the Coaches Congress in April.
It’s repeated enough to be kinda common knowledge… but I was curious… is this true?
If we keep members past this magic 6 month mark, will they indeed stick around forever?
What Does The Data Say?
So I dug into the data.
For this question, I looked at more than a quarter million memberships over the last 3 years (I kept it recent to keep it relevant).
To note, this 3 year span included COVID – which will make this finding even more remarkable.
Finding #1: Wow.
The first thing that stood out to me was how dead-on our subjective minds can be. Even without the data to prove it.
It turns out the “feeling” that 6 months is a magic number was amazingly close to what the data shows.
It actually looks like that number is closer to 7 – as the chart below will clearly illustrate:
Up until month 6 we see harsh churn rates on average between 8% and 10% per month.
Month 7 feels to be the taper month, where we see between 3% and 5% churn rates.
From month 8 beyond we see a clear and steady 2%-3% churn rate ongoing forever. This leads me to point number 2 of this post, which will be the strong words of concern:
Finding #2: Average Ongoing Churn in Gyms is Unsustainable
2 – 3% monthly churn might not seen terrible. If your gym has 100 members, losing 3 of them a month does not seem devastating on the surface.
However, this will be absolutely business in the long run, forcing you to move to strict sell-side levers to increase your business.
To clearly understand why churn is the one number you need to focus on, make sure to read Nerding Out: The One Math Formula That’s Destroying Your Business. In this post I break down exactly why you’re stuck at 150 members. (Spoiler alert, laws of math show it’s because you have 3% churn)
First let’s look at the data. This cohorted churn matrix shows every membership that’s begun across the PushPress network of gyms from January 2020 to December 2022.
It only takes into account memberships with auto-renewals; Disregarding trial plans, punchcards, and other non-permanent memberships.
It then evaluates which month that membership churned and plots that out across the timeline.
Here’s the raw data:
The first thing that stood out to me was how little Covid affected PushPress gyms were compared to the perception of the entire fitness industry.
It’s clear Covid affected membership sales and churn in Q1 and Q2 of 2020 and then everything is in line with the norm.
This is interesting enough I think I’ll slice and dice this one up for a separate post.
Let’s look at this data to see if we can find a clear point of churn inflection.
As we can see the churn rates in the boxed region coincide with the graph above – showing steeper churn in the initial 7 months.
Start With The First 7 Months
This data clearly shows a smooth onboarding process and integration into your gym is likely very critical to your business success.
Reducing this sharp churn curve should be your first priority. Think in the lens of your customer.
What makes them feel safe joining your gym? What gets them into the process and finding results, success or happiness as soon as possible?
How do you get them integrated with your community and coaches as quickly as you can?
Solving The Long Tail Churn
3%+ monthly churn ongoing after month 7 is equally devastating to a business.
Try to find frequent and helpful checkin points for your members to realign their goals and outcomes as you get into the 6 month plus range.
Remember – Variety is the spice of life. Some of your members will be good doing the same thing day in and day out for year. Most will not.
Find way to introduce a sense of “newness” into their relationship with your gym to keep things fresh and fun.
This does not have to be workout programming or directions. It can include things like social activities or coach rotations (change your evening coaches for your morning ones).
Just keep a mind’s eye towards keeping things interesting and different for your members!
By
Dan Uyemura
CEO Push Press
