It's strange how the online message of personalisation and focus has failed fully to permeate the offline world. Back in 2008, Kevin Kelly explained how to build a business on the back of 1000 True Fans and everyone knows the cost of acquiring a new customer to be greater than retaining an existing one.
And yet, we have bad health-clubs. Health-clubs that provide loss-leader offers to get you to join up and then rely on inertia-selling to keep you paying rather than nurturing you. Health-clubs that don't reduce their charges during hot, sweaty low-attendance summer months. Health-clubs that assume your loyalty until it's lost.
No wonder they have a churn business - they assume that's the business they're in and do nothing to rectify it. They don't reward loyalty, they don't keep in regular touch throughout membership and they don't offer new tailored services that might build that loyalty.
Recently, I happened to see a letter that my gym sends out a few weeks after a member has quit. It expresses disappointment at their absence and then lists a lot of amenities they are improving. Worst of all, the letter provides incentives to these leavers that are not offered to existing or renewing members whose loyalty gets them nothing. Though, only nosey ones like me know that. It's all about the gym and nothing about the ex-member.
That's inevitable because there has been no examination of why they left - no requirement in the quitting process to offer an explanation or provide an opportunity for remedy.
That's inevitable because there's no tracking of members whose attendance is diminishing and asking them why before they cut the knot.
That's inevitable because they believe that could alert the member to the money they're wasting as a high-profit, low-usage member.
It's all inevitable because it is company policy, the policy of a company with tens of thousands of members to track and analyse in the aggregate rather than think of them as discrete units.
It's a lesson that's not just applicable to gyms and membership. If you're lucky enough to have more than 1000 users, then just as Gore divide their employee groups into efficient maxima of 150, then surely you can divide your customers into subsets of 1000 fans and treat them like family? Or you can be in the churn business.
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