Put a lid on attrition with you computer. Part 2

The International Health, Racquet and Sportsclub Association (IHRSA) uses the following formula to track retention:

Attrition (percent) = [Number of members lost during a given period (year/month)] ÷ [number of members at start of same period] x 100.

Old Towne Athletic Club in Alexandria, Va., uses an even simpler formula:

[Number of cancellations x 12] ÷ [number of members at the beginning of the month].

There are a number of considerations that may effect your totals. For example, do you count freezes? What about summer memberships? What happens when you have a spurt of business due to outside factors (i.e., a club in your town goes out of business and you absorb their members) or a loss of business due to uncontrollable factors (i.e., your tennis bubble collapsed and you have to subsidize your members’ use of another facility until you can repair yours)? How do you track uncontrollable versus controllable factors (i.e., people who resign their memberships due to a move or loss of job versus those who resign because of non-usage or economic factors).

Attrition formulas will give you a base of information to look at from one period to the next, but may not always provide an accurate picture of what is going on with your members. What you really want to know is whether the member who started last year will remain at your club one year, two years or three years later.

Using staff to expand upon formulas

Dean Wallace and John Miller of Courthouse Athletic Clubs in Oregon started researching retention more than nine years ago. John determined that the ultimate goal for club profitability is to extend the lifetime of each membership. So, if a member were to stay a member for 15 months, the goal would be to keep that member for 16 months, then 17 months and so on. For each additional month you retain that member, you are increasing your bottom line (see the Value of a Membership formula in Fitness Management, September 1995). The critical months are the first four-month period and then the five- to eight-month period.

To increase retention, Miller decided to focus on moving new members from the “infant” stage to the “exercise independent” stage. To do this, he hired a group of “Member Assistants” who are assigned 150 to 200 members each. It is the Member Assistants’ job to work with the members, keep in touch and direct them to activities that will help them reach their goals and become “exercise independent.” Wallace and Miller also designed a computer software program called “LEAP,” which enables members to check in at a kiosk in the fitness center and enter information about activities and lifestyle for the day (or week, etc.). The member can then get a personalized lifestyle prescription for the next week that will keep them on a path to achieve their goals. Impressively, this combination of the LEAP and the Member Assistants programs has yielded a reduction in the drop-out rate during the first eight months from 50 percent to 20 percent.

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