Top 5 Strategies to Reduce Gym Cancellation and Churn Rates and Increase Retention

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As a gym owner, you want nothing more than to see your members happy and healthy. But sometimes, life gets in the way and members have to cancel their membership. Whether it’s for financial reasons, a work/life balance issue, or something else entirely, cancellations are inevitable. But that doesn’t mean you have to just accept them as part of doing business. There are steps you can take to reduce the number of cancellations at your gym, and in turn, increase your retention rates.

Gym members are your business’s lifeblood; without them, you simply wouldn’t exist. That’s why it’s so important to have a strategy to keep them around. One way to do this is by understanding and tracking your gym’s key performance indicators (KPIs) related to client loss. 

50% of new signups quit after just six months and considering the success rate of selling to a new member is just 5–20% compared to 60–70% for a current member, it’s essential to focus on strategies that will help reduce gym cancellation and churn rates and increase retention.

Uncover where your business might have gaps so you can understand how many clients are leaving, why they’re leaving, and what you can do to keep them. Read on as we delve deeper into the top KPIs you should be tracking to reduce gym cancellations, churn, and increase retention rates. Here are some strategies to get you started, as maintaining a constant gym membership base is crucial for your gym’s growth, sustainability, and overall success. 

Top Gym KPIs You Should Track and Why They Are Important

Keeping track of the right KPIs is essential to understanding where your gym might have gaps causing clients to churn, cancel their membership, or never sign up in the first place. Here are the top KPIs you should be tracking:

Gym Cancellation Rates

The cancellation rate is the number of membership cancellations divided by the total active memberships. Measuring your cancellation rate helps you understand how many members are leaving your gym and why. Common reasons members cancel their gym memberships include:

  • Frustration with long wait times for equipment or machines
  • Unhappy with the cleanliness of the facility
  • Lack of available parking
  • Unsatisfied with customer service
  • Moving to a new location
  • Financial reasons

Understanding why members cancel their gym memberships can help you implement systems and processes to mitigate these issues. 

You might consider increasing the number of machines or adding more times for members to use them, for instance, if members are canceling due to long wait times for equipment.

Gym Churn Rates

Churn rate is the percentage of customers who cancel their memberships or don’t renew them within a given period. Lost members mean lost revenue for your gym, which is why it’s so important to keep track of your churn rate and work on strategies to reduce it. 

Achieving a 0% churn rate is practically impossible, so the goal is to keep it as low as possible. There are several indicators that you have a churn problem, which include:

  • High cancellation rate
  • Decrease in gross margin
  • Reduction of average customer lifetime value (LTV)
  • Increase in customer acquisition costs (CAC)

Churn occurs due to the following reasons:

  • Low engagement
  • Lack of value
  • Poor customer service
  • Ineffective onboarding process

Being prompt in addressing the issue is essential to saving your gym money and keeping clients around.

Gym Retention Rates

This is the most critical gym KPI of them all. It refers to the number of members who stay with your gym over a given period, usually as little as three months or as long as a year. The average gym has a retention rate of 75.9%, according to the IHRSA, which means that out of every ten members who join, only about seven will stick around after their first year. 

The higher your retention rate, the more stable and successful your gym will be. There are a few key indicators that show whether or not you have a retention problem, which include:

  • High cancellation rate
  • Decrease in customer satisfaction
  • Reduction in new customer acquisition
  • High churn rate

High retention and low churn rates go hand-in-hand. The best way to increase your retention rate is to focus on providing value to your members and delivering an excellent customer experience.

Understanding where your gym stands based on these KPIs is the best place to start so you know which areas need the most focus and the proper strategies to employ. KPIs are essential to assess as often as possible, especially when you have implemented effective gym sales strategy, you want to see how they measure up against your KPIs.

5 Strategies to Reduce Gym Cancellations, Churn, and Increase Retention Rates

Increased gym cancellation rates and churn can be costly and time-consuming. Increasing customer retention by only 5% boosts your revenue by 25–95%, giving you a much better return on investment than acquiring new members. Follow these five strategies to reduce gym cancellations and increase retention rates at your gym.

1. Curate a Well-Thought-Out and Efficient Member Onboarding Process

Your onboarding process is critical to your gym’s success and reducing cancellation rates. You can set expectations, answer any questions members might have, and help them feel comfortable using your facility. Make it highly personalized, so each member feels like their needs are being met. 

2. Appeal to Your Leads with a Variety of Membership Options

Offering various membership options is a great way to increase your gym’s appeal and reduce cancellations. Giving leads the ability to choose a membership that fits their budget and needs means you’re more likely to convert them into paying members. Some membership options you could offer include the following:

  • Pay-as-you-go
  • Monthly contract
  • Annual contract
  • Couples’ membership
  • Family membership

This is also an excellent strategy for reducing churn, as members are less likely to cancel a contract if they’ve already paid for an entire year upfront.

3. Get to Know Your Members and their Fitness Goals

Every customer’s fitness journey is different, and by understanding their unique goals, you can better help them along the way. This will make them feel appreciated and increase their chance of reaching their goals, making them want to continue their membership. 

Use data from signups, check-ins, and surveys to get to know your members and their goals. You can also create member profiles in your gym management software to give you a complete picture of each member and help you better understand how to keep them engaged.

4. Keep Your Lines of Communication Open and Respond Quickly to Concerns

Lack of communication is one of the leading causes of gym cancellations. Members who don’t feel they can reach out with questions or concerns are more likely to cancel their membership. Ensure you have multiple channels for members to reach out, such as email, phone, social media, or in person, and that someone is available to respond quickly. 

You can also proactively reach out to members to check in and see how they’re doing. This will show that you care about their experience and want to help them succeed. Keep your members in the loop about any changes, new offerings, or events happening at the gym so they always know what’s happening.

5. Improve Customer Service and Create a Positive Customer Experience

90% of consumers use customer service to decide whether to do business with a company, so ensuring your gym has excellent customer service is crucial. This includes everything from the initial signup to ongoing support throughout their membership. Train your staff on the proper handling of customer service inquiries and give them the resources they need to resolve issues quickly. 

You should also regularly collect feedback from members to identify areas that need improvement. Creating a positive customer experience will reduce cancellations and increase customer loyalty and referrals.

Employing these 5 strategies is a fantastic way to retain current customers and get new signups, and the good news is, you don’t have to do all of this alone. 

Beat Cancellation and Churn Rates with Professional Advertising and Business Consulting

Understanding your gym’s KPIs is essential to reducing cancellation and churn rates and increasing retention. It can be challenging, though, when you have other responsibilities, such as managing day-to-day operations, fitness classes, and personal training

The pros at Loud Rumor can help you take the guesswork out of your gym’s marketing and advertising so you can focus on what you’re good at – running a profitable gym! Our team of experts will work with you to understand your goals, create a custom marketing plan, and execute it flawlessly. 

We’ll track your progress and optimize your campaigns to ensure you’re getting the best results possible. Reach out to Loud Rumor today, and let us help you beat cancellation and churn rates!

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