The moon, the seasons, and many other aspects of life follow a cyclical nature. This is also how certain industries work. The gym industry, as does gym member collections, tends to follow a cyclical nature. Let’s take a look at how and why gym collections follow a pattern, so your business can better know what to expect and how to adapt.
Following the Gym Industry
Gyms and health clubs commonly experience busy times in the first quarter of each year, with slower times during summer and the fourth quarter. The gym member collections process mirrors these revenue trends.
The Beginning of the Year Rush
People commonly make New Year’s resolutions to be healthier, which creates a boom at the gym during the first quarter. In the same way, people often make it a resolution to improve their finances. It therefore makes sense that the first quarter has become a prominent time for people to pay off their gym debts.
Following the goal to be healthier brings the gym back to mind, which can encourage people to restore their good standing by paying their owed dues and reinstating a membership. And, of course, a desire to improve their finances encourages them to take care of unpaid debts.
Perhaps surprisingly, the tax season is another big time for the gym collections process. This has a lot to do with people receiving a financial boost from tax refunds, which are upwards of $3,000 on average in the United States.
This refund gives many people the extra money to pay off gym membership debt and potentially even resume their membership. In addition, people may be incentivized to straighten out poor finances when taking care of taxes.
Some aspects of life, such as holidays, end up impacting businesses on an annual basis. This is true for the gym industry and for gym member collections as well. At Aldous & Associates, we notice a slower season during the summer and the fourth quarter of the year. These downtimes make complete sense.
Summer tends to create many shifts from other times of year, including kids being home from school, vacations and outdoor exercise. At this time, people often skip the gym, and many have focused on their summer bodies before the season. They may be less inclined to pay their gym debts as well. Part of the issue is that they’re busy and putting their money toward other things during this time of year.
In the fourth quarter, you have Thanksgiving, Black Friday, Hanukkah, Christmas and other holidays. People are busy and spending money on feasts, gifts, parties and other expenses. Many people spend less time in the gym and have their money allocated to other areas, so gym collections success is less likely.
By better understanding the seasonality of gym collections, your gym can plan your collections processes for the best results, similar to how you strategically market your gym to fit the time of year.
At Aldous & Associates, we like to make an extra push for collections after the New Year, as we know this is a big time for people to pay off their debt. We make a similar effort during tax season to account for refunds. Likewise, we don’t expend extra attempts during summer and the fourth quarter, when these efforts have a reduced chance of success. This kind of strategy can improve results, and is something for your gym to think about when you focus on your side of the collections process.
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