What is the first thing that comes to your mind when someone mentions “club membership”?
Most people think of acquiring new customers.
“What special or free offer can we make to entice prospects to convert?” This one-track mindset can not only sabotage your sales revenue but negatively affect your cultivation of members for long-term relationships. You could be leaving millions of dollars on the table with this incorrect offer-offer-offer membership approach.
It’s time to do a 180: approach your sales strategy with a 50/50 focus on member acquisition and member retention.
What Most Clubs are Doing Wrong: Churn and Burn
How often do you lower your price of membership and offer a special deal to join? If you answered with “every month” or even “every other month,” it’s time to rethink your strategy.
By consistently lowering your prices or sweetening the deal, you are ultimately lowering the value of your services. Quality customers don’t need to be lured by a limited time offer; they are willing to pay for the value.
In the business world, there is a phrase called churn and burn. This refers to an organization’s turnover rate. If you are constantly lowering your prices to attract new customers only to lose those customers after a few unhappy months, you are churning and burning–and ultimately lowering your net gain numbers. Gyms also use attrition rate.
Redirect your Efforts: Delight and Maintain
The secret to your club’s success is retention, not acquisition. Focus on your member experience and make your current customers happy. Keep them around and give them something to talk about; word-of-mouth marketing is one of the most powerful avenues and it costs your marketing budget a whopping $0.
Consider implementing an automated referral program to further encourage your members to share the love. For every new member your customer refers, give them a free service or gift card to spend within the club. They will be incentivized to spread the word and will bring you more qualified leads than a free month campaign will.
Let’s Talk Numbers
Research shows that it costs nine times as much to acquire a new customer versus keeping an existing customer. Not only that, but increasing your retention rate by a mere 5% is also proven to increase your profitability (between 25 – 95%!).
Save your marketing team precious time, energy, and money by nixing the gimmicky offers and focus on delighting and maintaining your already existing members. This 50/50 focus will benefit your club for years to come.