Increase Net Members, NDR and Member Staff Retention by Managing Cancellations. Presented by Karen D. Woodard-Chavez

Transcription

1 Increase Net Members, NDR and Member Staff Retention by Managing Cancellations Presented by Karen D. Woodard-Chavez

2 Karen D. Woodard, President Premium Performance Training Boulder, Colorado, USA Ixtapa GRO, Mexico. Training and Consulting for: Sales Service Management and Leadership Thank you Be informative, inspirational and persuasive

3 Purpose of the program: To review the effectiveness of your cancellation system Decrease your cancellations by a minimum of 5 per month (60 over the year) Keep revenue from dropping Positively impact the short-term cash flow and long-term health of your business

4 What do you want from our time together today? Average annual Membership cancellations? What is your goal for cancellations? Are you above goal or below goal? Goal for saves each month? Process for saving Members from cancelling? Aaaa

5

6 What is happening out there? Sales flat for some Sales down for some Sales way up for some Usage up for some Cancellations up for all Net is down Many different factors at play

7

8 Compelling Comparison No infrastructure for sales and retention Infrastructure for sales only Operative structure for sales and retention

9 Strong growth systems part of the business institution Strong programming and facilities Strong commitment from staff on bigger picture organization goals Strong differentiation Strong sense of value Strong service systems in place Hospitality Retention pre-emptive vs. reactive

10 Checklist of Approaches Pre-emptive Retention goals Strong and immediate Member integration system in place On-going connection and follow up with Members Value Connection Reactive What to do when Plan A is failing

11 The following sentence should be included in absolutely every job description for every position in the club as their primary purpose for staff to be clear about the bigger picture of their role and the overall contribution they should be making daily. To create and deepen relationships with Members we know and do not yet know, that will add value to their membership, enhance their sense of belonging and sense of community within the club.

12 Total Revenue Lost = $32,150 How Much Does Each Lost Member Cost in Terms of Revenue? This info should be shared with the entire staff Assumptions: Joining Fee = $75 Monthly Dues = $50 Average Stay of Members = 4 years Referrals per Member during that time = 4 Non Dues Revenue per Member per year = $1,000 If a Member cancels at month three, the club has lost: Dues = $2,250 Referrals = $9,900 NDR = $4,000 + $16,000 = $20,000

13 Save 5 Members per month from canceling and The club keeps/adds $1,929,000 over a 48 month period (5x$32,150x12=$1,929,000) The club keeps/adds $489,000 over a 12 month period (5x$8,150x12=$489,000) What would an extra $500K - $2mill do for your clubs longevity?*

14 Total Revenue Lost = $ How Much Does Each Lost Member Cost in Terms of Revenue? Assumptions: Joining Fee = $ Monthly Dues = $ Average Stay of Members = 4 years Referrals per Member during that time = 4 Non Dues Revenue per Member per year = $ This info should be shared with the entire staff If a Member cancels at month three, the club has lost: Dues = $ Referrals = $ NDR = $

15 New Member Integration Survey Welcome to the club we want to make your experience exactly what you would like it to be. Please help us do that by answering the following questions. Thank you and once again Welcome! 1. How often would you like your Membership Representative to stay in touch with you? a. Monthly b. Bi-monthly c. Quarterly 2. Would you like for us to call, text you or would you prefer s about monthly events and programs at the club? (Circle one) 3. Please describe the level of attention and care you want from the staff while at the club: 4. Would you like to have the fitness staff check in with you in 30 days to see how your exercise program is progressing? 5. What services in the club would you like to have the director contact you about: Personal Training Tennis lessons Spa Services Pilates Swim lessons Youth Programs 6. What is the best time of day and number or mode to reach you?

16 The Exit Interview with Canceling Members Who should do it and how it should be done to minimize cancellations and impact retention

17 Who should do it The typical scenario Who should not do it Who should do it Where it should be done What should happen prior to the cancellation Save goals The transition The research Have a system to save rather than a system to process cancellations

18 Information to get & Questions to ask during the exit interview: Know how long this person has been a Member Know their usage habits Know what options you have available to offer Apologize, express the importance of keeping this person as a Member in an empathetic way (no defense) What is making you want to leave the club? What was the reason you joined the club? Did you get from your membership what you expected when you joined the club? What could we do differently that would make you want to stay with the club? What if we were able to do for you would you reconsider canceling your membership?

19 30 Day Make It Fit Program This program is presented when the Member wants to cancel due to lack of usage* They remain a paying Member The club commits the resources of staff and time for 30 days Trainer time, membership support person call time/activity time

20 The 2 reasons Members cancel that can be affected by this program: Lack of usage Job loss Moving cannot be affected by this program

21 Susan, I can understand that you want to cancel your membership because you are not using the club nobody wants to pay for something they are not using. Clearly, something has gone wrong because when you joined the club, you wanted to be successful with reaching your goals and we want you to be successful with that as well. I have an option that could work really well for you. We offer a 30 day program at the club called Make it Fit the way it works is I would schedule you with a Fitness Specialist to discuss what you want to accomplish at the club, how to make it fit into your schedule and ultimately how to make it fit on your terms. The Fitness Specialist will design a program for you that can be done here, on the road or a combination of the two. You will get lots of support as the Fitness Specialist as well as myself will call you weekly to check in and see what you need to make this work. What this means is that you remain a Member for another 30 days, we offer you these services at no cost to you to make this work the way we both want it to. Then, at the end of the program, if you still feel that you need to cancel, we can have that conversation. Susan, you have a large resource of professionals that are behind you here at the club and we want to see this work for you like we know it can and like you want it to. Shall I get you scheduled for the program? We can get you with a Specialist tomorrow morning if you would like.

22 Make It Fit Program Cost Options One person (full-time) who handles the cancellation process for every Member who wants to cancel and also does the execution of the program (initial conversation, sessions, programs, calls, follow up, etc.) --- salary of $30 - $45K plus bonuses on saved cancels. High cancellation volume in club (50+ per month) Dedicated person who has the time to have a focused conversation can be more persuasive* Sole purpose/function is getting Members into the program and preventing cancellations Not distracted by other job duties

23 Make It Fit Program Cost Options Several people GM who handles the initial cancel process and follow up calls and a trainer(s) who executes the program, sessions and calls. GM salary is already covered, GM should have a tie in to bottom line, trainer is paid at $12-$15 per hour x 10 Members* in the program x approximately 60 hours per month = $900 per month or $10,800 annual cost (does not include tax burden or employee benefits). Lower volume of cancellations monthly Lower cost to program Not as focused* may be more rushed Job may not get done completely

24

25 Membership Assistance Assistance program: help made available Scholarship program: a grant of financial aid awarded to a student for attending college Some club operators philosophically opposed would rather offer a freeze period Problem with the freeze no club usage or connection, high probability of cancellation within three months --- delaying the inevitable Many Members want to stay at the club but are struggling to do so Keep Members involved, minimize cancellations Maintain your benevolent influence by keeping the Member in the club Strengthen long term relationships

26 Specifications for the Program Limited number available Application process -written application -documentation: severance notice, proof of income from previous employer -interview: non judgmental discussion about the Member s situation and set re-evaluation date Limited time for assistance: 3 6 months 25 50% reduction in dues Purpose: to keep the Member

27 Financial Picture May or may not make sense for you If average dues is $100 per month Do the math: 60+ cancellations per month 30 due to financial issues, job loss, etc. The club accepts 15* assistance applications per month

28 Financial Picture 15 Members who, if cancelled, would result in a loss of dues* of $1500 per month On the Assistance program, they would stay at a 25%* reduced dues rate (for a limited time) and the club would keep $1125 per month rather than losing $1500. The bigger picture (6 months): the club could potentially lose $9,000 or keep $6,750. (Bigger picture does not stop there) Difference of $15,750 between the potential loss and the gain

29 The Initial Conversation Will come up in the cancellation conversation Ask questions, listen before offering as an option Once you know this could be a good option then introduce with the following verbiage

30 Suzanne, I am sorry to hear that you have lost your teaching job. I can imagine how stressful that must be for you and your family. I also understand why you want to conserve your capital. You have been a Member here for several years and we would hate to lose you for any reason but especially at such a stressful time when exercise and the personal as well as professional relationships for networking you have here can be so beneficial. We have developed an option that my work for you to stay rather than go. The club has recently developed a Membership Assistance program to provide financial relief for a limited number of Members such as yourself because we know that many of these situations are temporary and we want to have you as a Member for the long term. We would be able to temporarily reduce your dues for a period of 3 6 months by 25% -- how would that work for you? Would that allow you to remain as a Member with the club? (The club may be willing to reduce as much as 50%) There is an application that needs to be completed as well as documentation which includes a copy of your severance notice and your proof of income from your previous employer. Shall we go forward and start that process today? As soon as we get the severance notice and proof of income, we will arrange for the reduction on the next billing.

31 Membership Assistance Application Date Membership start date Member Name Member address Phone Please describe reason for assistance request: Amount of assistance granted: To start and end on: Approved by: Date Term for assistance 3 or 6 months (check one) Documentation attached: I, promise to inform the club when my financial status changes if it is before the term agreed upon and then agree to go to my regular dues rate when possible.

32 Members Do Talk Some Members will talk about this but most will not most will be humble and grateful How to handle the Member who would like to pay less for their Membership Explain that we have developed a program for our Members in need, who have lost jobs or have experienced financial hardship. We offer a limited number of these scholarships that work for the Members as well as the club and if they would like to go through the application process we will consider them

33 Your To Do List Review program Assess your club systems pro-active vs. reactive Make the necessary changes on key elements Decide and commit to a program format and the investment to make it successful Set monthly goals for decreasing cancellations Do the math for your club to include all associated costs, gains or losses Fast tracking the program can make it possible to see results in 30 days Focus on don t forget about the program there is huge potential when this is done well and done right to earn a handsome return

34 Wrap Up Questions? Concerns? 34

35 Today s Take A Ways:

36 Karen D. Woodard, President Premium Performance Training Boulder, Colorado, USA Ixtapa GRO, Mexico. Training and Consulting for: Sales Service Management and Leadership Thank you Be informative, inspirational and persuasive