The fitness industry was an early adopter of retention tactics.  Most added no value for the customer and were designed specifically to make cancellation difficult.  More recently, our industry is adopting new tactics to extend a membership or to influence renewal.  This view can be short sighted, requiring gyms to focus on driving an incremental relationship with members.  It can also be very expensive and will not always yield great results, yet most gyms still don?t focus on loyalty strategies. Loyalty strategies don?t just focus on a one-time renewal, or a tactic for those most likely to quit, but rather they focus on creating fans for life.

The latter causes one to think more deeply about the design of the business and how it interfaces with a customer in everything it does.  It forces more of a philosophical approach that can transform the way owners think about their strategy overall. It?s also harder to do, as it requires owners to step back and really define the elements of strategy on which they will differentiate.  That?s why we see parity in the fitness business, especially for fitness-only type clubs competing in the lower and middle of the marketplace.   There are many clubs competing in the high-end of the marketplace asking the right questions; how do we create loyalty?  But no matter where you compete across the pricing spectrum, those willing to move from mere retention tactics to a loyalty strategy will be rewarded.

How can you tell the difference between strategies that are tactically focused on retention, versus strategy focused on long-term loyalty?  Look no further than HOW you use data. The kind of data you lean on and how you use it to inform decisions and actions reveals your focus.

The more you lean on usage data and other member behavioral data, the more tactical you end up being.  It looks something like this; you call people when they stop using the club and try to re-engage them; you find people in your club that are most likely to quit and make it a point to go talk to them. You use customer behavioral data to try to predict what an individual might do next.  Doing this is not a bad thing at all, but doing it without really looking into the reasons why a customer will possibly churn is a missed opportunity to create real changes in your business that lead to real loyalty.

Imagine if the broader member experience is horrible or even just mediocre.  What if members feel staff is unfriendly, the club is unclean, services are difficult, and management is uncaring?  What if they feel the club is just indifferent to their experience?  How genuine will your retention tactics seem to the member over-time?

Take ownership of your loyalty strategy and build your brand with data that measures YOUR behavior.  This is only captured through the members? eyes.  It is their PERCEPTION. Once you understand how customers perceive YOUR behavior, you have the information to move to ?great.?  Perception data includes friendliness metrics captured for each critical touch-point.  Servicing metrics that reveal the customers? perception of how easy you are to do business with.  Cleanliness and equipment condition metrics that measure how the customer is experiencing your plant and equipment. All of these things represent the quality of your overall product as seen through the experience of your customers.  Remember ? your behaviors ARE the customer experience and you have total control over YOUR behavior.  The value of understanding your members? usage and behavioral data will greatly increase when you have ?member perception? data and use it to build loyalty.   The big AH HA and empowerment that comes from doing CEM right, is that you seek to understand and adjust your own behavior and align it to improve the customer experience.

Suppose you have a friend that never exercises, is overweight, smokes, only eats junk food, and drinks way too much.  He asks you for advice on what vitamins to take to get healthy.  Your say ? ?You have to change your behaviors.  You must start exercising, stop smoking, eat better, and drink less.  Then let?s talk about vitamins.?

You know to address the behaviors that are causing him to be unhealthy – then let?s add the vitamins. The same thing holds true for the health and fitness of your business.

CEM stands for Customer Experience Management ? not Customer Experience Manipulation.

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More than 85 percent of the American population is involved in one or more loyalty programs, which means that loyalty programs are now a price of doing business and cannot be ignored. Large businesses have discovered that point banking loyalty programs are the best way to drive consumer behavior. The ability to accumulate and save points to later redeem for larger gift rewards continues to build enthusiasm for this type of rewards system.

Given the popularity of loyalty programs, they can be surprisingly ineffective. That?s right, ineffective. A loyalty program, like any program, is only as good as its ability to engage and drive behavior.

To stand the best chance of success in tough market conditions, programs must enhance the overall value of the club or service and motivate members to make their next purchase, participate in an event or activity, or inspire a friend to enroll. Good loyalty programs also should motivate members to stay members.

Here are seven steps for implementing a good loyalty program in your facility:

1. Put the right program in place.
   Be cautioned by loyalty programs that you can start in 40 seconds by using an app and that are not customized for your business. Ensure that you work with a company that understands your clubs goals and has experience in building a loyalty program with stickiness.
2. Make it Stick.
   Start by making a list of behaviors you want to drive in your club; such as rewarding for visits to the club, participating in training sessions, awarding our top spenders, or referrals. Next, determine what will motivate members to participate in those behaviors.
3. Dangle the carrot. 
   Although a direct reward is great, leave room for something more to be attained. Point programs with levels work well in accomplishing this. Members will look for ways to earn more and your business will benefit from the breakage and shrinkage of points while driving behaviors from your members and building loyalty.
4. Stick with it. 
   Give a program at least six to 12 months before evaluating the overall impact. Consistency and ongoing marketing is a key factor in getting the word out and building momentum. Good clubs reward and recognize their top spenders, referring members, and event and program participation with consistency. By visually and verbally recognizing members who are top users of your loyalty program, you will ultimately create more users.
5. Create a scoreboard. 
   What is it that you would like to affect? If you want more referrals, then find out how many referrals you are getting now. How many do you want to attain this month and going forward each month thereafter? Most clubs forget to keep score. Once the metrics have been set, it?s important to keep score. Ensure your loyalty program can measure return on investment.
6. Involve the staff. 
   Usually a club?s most successful program is the one that the staff participates in. So, ensure that your staff can also participate in the reward program. Customize the ability for your staff to earn, for example if they receive a compliment from a member or hit a sales goal. Also, customize their reward catalog such as paid vacation days or lunch with the boss.
7. Market. 
   The loyalty program must be layered into multiple marketing messages. All member communication should drive members back to your loyalty program. If you do not layer your loyalty program into most of your member marketing, it won?t stick. Members should be communicated with monthly via in club signage, social, digital and mail.

If you?re following the pointers above, you will succeed in developing a successful program for your club and successful loyalty programs provide a return on investment!

The club business has historically been a retail sales minded industry with little focus on loyalty and retention. A clubs biggest expense is not payroll, its attrition. Good programs cost only a few hundred dollars a month with thousands of dollars in payoff. Getting the penny out of our eyes to see the dollar is usually the most challenging part.

Maria Parrella-Turco is a Health & Fitness Industry Expert serving the industry as a speaker, entrepreneur, and writer since 1990.  She is a lead trainer for the NPP University and Franklin Coveys 7 Habits of Highly Effective Health Club Managers, and founder of fitRewards.

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If you?re unsure what to do to boost the happy-factor at your club, try these sure-fire fitness center management tips to get your members smiling:

1. Solve Membership Problems: There?s no quicker way to turn members off than to have them speak with sales staff who are unwilling or unable to help. It bears repeating that the fitness industry is a service-based industry and the time and attention you pay to your sales team will directly affect referrals and member retention.

Give your sales people the power to provide a variety of offers that work for varying customer needs. Allow your reps to provide student discounts, one-month trial memberships, and extend discounts to customers who?ve contacted you with complaints.

Empowering your sales people can give you a bump in member satisfaction that lasts long after the phone call is over.

2. Get Friendlier: Sometimes the only difference between your health club and the one across town is the connection members feel to you.

Try reaching out to potential and current members through a variety of channels:

• Offer discounts and promotions on Facebook
• Provide value-added services through your email newsletters
• Promote new class offerings via text message to members? mobile phones
• Use compelling signage at your locations to inform members of new events and promotions

3. Spread Some Fun: Health clubs have an added bonus when it comes to engaging with their audiences, a large part of club populations are naturally competitive. Consider this statistic – nearly half of Internet users expect incentives and rewards for engaging with a brand online and over 200 million played games on Facebook in September 2012 alone.

Put these together and you?re working with fertile ground for spreading fun and increasing connection with current and prospective members when you create games and contests to capture their interest. (For more information on social gaming for brands, check this resource from Oracle (PDF).)

The name of the marketing game for any health club is connection. Use these tips to connect more strongly with your membership and you?ll benefit from happier followers.

Learn more ways to improve your fitness club management. Learn about how ABC Financial’s health club software can benefit your business with a free demo.

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