Okay, we screwed up and it was our fault. We had lots of internal conversation about whether we needed to post this fact in a blog and, then something really interesting happened.
For years, I have heard club owners snicker in meetings about “sleeping dogs” AKA the perfect customer: gym members who pay their dues every month while being over the minimum term of their contract, but never show up at the front door. These are the members who can cancel at anytime. Let sleeping dogs lie is certainly the mantra of the fitness industry.
I bought into the sleeping dog myth up until a few days ago.
As most of you already know, Motionsoft has developed and deployed one of the most sophisticated member management and data analytics platforms for the fitness industry. It gives our team an interesting vantage point on club activity. Clubs of all sizes use our platform and in working with these companies we have uncovered data that we think debunks the myth of the perfect customer.
Let me explain.
First, the fact is we are coming clean about an error we made that resulted in an unpleasant experience for one of our best customers. In short, while running a database test, we inadvertently sent emails to all members letting them know that they don’t owe anything! Happy holidays, right? Needless to say we were distraught!
We called our customer, explained what had happened and braced for the calls and cancellations. Then we waited for the storm … but it never came.
Here’s where it gets interesting.
Sure a few people called and asked why they received this email and what the email was about. A handful of those people did in fact cancel their memberships. Then came time to assess the damage. At the end of the month, our team analyzed the data. What we found was pretty cool.
What cool data did we discover that debunks the myth of the perfect member? Our analytics team looked at:
- Three-month membership trends prior to the notification
- 12-month membership averages
- Same period member comparison reports for the previous two years
All the findings were consistent. Historically, the club was losing the same number of members each month up until the email was sent out. In fact, the inadvertent email didn’t trigger a wave of cancellations, it triggered higher monthly retention rate!
In fact, monthly cancellations declined by nearly 80%.
So we kept digging. After examining check-in reports, we discovered a trend. Around the time of the email error, the daily unique check-in count for members increased by approximately 10% with dormant members, those who had not checked into the facility for the past 45 + days accounting for a signification chunk of this percentage.
The three-month and 12-month membership averages revealed that the largest segment of cancellations was coming from “sleeping dogs” those dormant perfect members who weren’t coming into the facility.
A single email triggered a behavioral change.
Our hypothesis is that a single email communication combined with an implied offer of one-month of no dues motivated members to take advantage of the offer and in doing so resulted in a significant reduction in monthly cancelations. The communication simply became a motivational trigger that gave dormant members a chance to return to the gym. The challenge going forward is how do we help one of our best customers keep them coming back?
That’s why a deeper data dive is in order.
Going forward, we’ll be looking at average length of memberships since the errant email across two core segments: sleeping dogs and regular active members. The other variable we’ll be assessing is email engagement rates (control groups will not be sent any special communications and the test groups will).
Regardless of where the data takes up, it’s clear that just because your facility doesn’t contact sleeping dogs doesn’t mean they aren’t thinking about you. In fact, the sleeping dogs seem to behave more like lurking member cancellations waiting to pounce.
Stay tuned to learn if it’s time for your facility to wake up your sleeping dogs and retain more active members.
Happy Holidays from everyone at Motionsoft!
[…] The reason is simple: the gourmet restaurant focuses on customer experience, quality of food and excellent service. They want to engage their customers, get their feedback, learn from them and make adjustments to the menu. In short, they want to hear from their customers, all of them, all of the time. The fitness industry often ignores these basic best business practices due to our focus on new sales and the misguided idea that you should let sleeping dogs lie rather than waking them. (Click here to learn why that has become a convenient excuse rather than a reality.) […]