Do you know the real reasons behind your customer churn?

Customer churn. It’s a problem impacting both the public and private segments of the fitness industry. It’s been estimated that churn costs the industry £909m per year in lost revenues alone. 
 

The 3 fundamental reasons that customers leave

In response, gyms and leisure centres are developing processes to try and talk members out of cancelling. While this may ‘save’ a few members for a while, it’s only a short-term fix for a long-term problem. Despite all the different reasons that are on a typical leaver’s survey, members cancel for one of three fundamental reasons:
  • The experience of being a member isn’t meeting their expectations
  • The benefits/results from being a member haven’t materialised
  • Their needs or expectations have evolved
Unfortunately short-term discounts and promises aren’t going to change the fact that the member feels let down. They’re no longer getting the experience or benefits they signed up for. To reduce churn  you need to become proactive. Reactive cancellation calls have their place, but only as the final roll of the dice. 
 

You can’t reduce churn until you know why customers are leaving

To reduce churn and improve customer retention, you need an ‘outside-in’ perspective. Which means seeing your products, services and experiences through your customer’s eyes.
Getting this perspective starts with asking open questions. You won’t learn how customers feel, if they can only choose from a list of options created by staff.
 

Your leavers surveys are creating customer experience blindspots

Most gyms and leisure centres have a leaver’s survey or cancellation form. But the question they pay most attention to is the multi-choice reason question. MyCustomerLens have analysed thousands of survey responses. What we’ve seen are two crucial problems that impact your ability to reduce churn:
  • The list of reasons offered doesn’t reflect the reasons that customers would give
  • The truth is in the free text comments, but these don’t get analysed as rigorously

The list of reasons is giving you false information

The multiple-choice options don’t reflect the reasons that customers would give. Most of the reasons offered suggest that the cancellation isn’t the gym’s fault. Some options aren’t even a reason to leave at all. They focus on the customer’s changing needs, rather than the delivery of their value proposition. Lets look at some typical options:
  • Joining another gym – this isn’t a reason for leaving, it’s what they did next. The real question is why did they feel the need to join another gym?
  • Not using it enough – this is also about behaviour rather than emotions. The real question is why aren’t they using it?
  • Moving away – yes some people do completely leave the area, but some have only changed jobs or shift patterns. The rest tick this box to avoid further scrutiny.
  • Unhappy with service – one of the few options in the list that implies the gym could have done something to save them. But ‘service’ is too broad a category to take action on.
In contrast, what options don’t you see on most leaver’s surveys? Cleanliness, availability of classes or the quality of instructors. Yet these reflect the elements of the value proposition that most gyms are trying to deliver.
 

The truth is in the text comments

The second problem with relying on a prompted list of reasons for leaving, is that it hides the details. Senior Managers miss out on seeing what’s going on across their sites. General Managers fail to get the insights they need to take action. In some cases Managers are losing context. In other cases the results are wrong. Let’s look at three specific examples:
 
Reason ticked: Joining another gym
Explanation given: “Too many people! I was unable to use the gym. The equipment was not cleaned thoroughly and the broken spin bikes got frustrating”
The real reason for leaving has nothing to do with the new gym. It’s about the gym not delivering on its value proposition. Issues with availability, cleanliness and maintenance drove this member away.
 
Reason ticked: Moving out of the area
Explanation given: “A real problem getting onto my classes after at least ten years membership. I find having to monitor my e mails constantly for cancellations very annoying.”
This member wasn’t physically moving away, they had just got fed up. Class availability and inconvenient processes became too much for even a long-term member.
 
Reason ticked: Other
Explanation given: Even though the gym has been upgraded I feel its not well equipped, for example theres no where you can do stomach exercises and theres no atmosphere. There are staff in there, it would be good for them to have a chat just to make sure your getting the best out of the equipment and if theres anything that can be done, just a bit of interaction would have been good
The member experience has underwhelmed this person. Exercise options and the gym culture have led to them getting fed up with their exercise routine.
 

Start discovering insights today

Do you want to start learning the real reasons why customers are leaving? Then the solution is MCL Discover. It’s the fastest and most consistent way to get richer customer insights. Using our industry-specific algorithms, your unstructured feedback data can be analysed faster than you can say leaver’s survey!
 
LIMITED TIME OFFER: During September we have a special money-back offer. When you buy MCL Discover, and within 90 days sign-up for our on-demand insight subscription, we’ll give you your money back! We’ll take the £300 straight off the year 1 subscription. Click here to get going.
By |2019-09-03T11:37:21+01:00September 2nd, 2019|Customer Insight, Customer Retention|1 Comment

About the Author:

Paul Roberts is CEO & Co-Founder of MyCustomerLens. While MyCustomerLens is a start-up business, the idea has arguably been developing for 20 years. During this time Paul has worked in the UK, Australia and New Zealand; within the sport, banking, telecom and energy industries. The common thread has been his passionate belief that the secret to achieving customer and revenue growth is having a rich and shared understanding of your customers, and then using it to make faster and more informed decisions across the organisation.

One Comment

  1. Guy Griffiths 02/09/2019 at 10:48 am - Reply

    Another great post, Paul. So many operators still stick their head in the sand when it comes to leavers, or are satisfied with the reason box ticked. There’s so much valuable data in the leave process that’s often missed, but if you record and measure your leaver feedback, you can get some really good, and often quick, wins. If you don’t measure, you can’t improve!

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