You’ve likely heard of collections processes that burn bridges with gym members through their aggressive tactics. You may have even experienced these scenarios with your gym.
But there’s another way to do collections to help your gym retain members rather than alienating and losing them. Since retention is a top strategy for running a gym business, seeing the collections process as one more tool for customer retention is beneficial.
How Can Collections Create Gym Retention?
It might seem surprising or unrealistic that the collections process could help retain gym members, but it’s true with the right collections process. A gentle approach that’s not too aggressive or accusatory helps your gym reconnect with wayward members and bring them back into the fold.
A prime method to use is to offer to waive all or part of the past-due balance if the person signs up for a new contract. This method helps people eliminate the debt owed and incentivizes them to reinstate as active members.
It’s a win for both of you, as your gym keeps a member and gains the new membership fees while the member starts with a financial clean slate and gets to continue with the benefits of going to a gym.
Why Is It Worth Reinstating Members?
You might initially think it’d be better to let members go if they failed to pay their dues. But a retention plan is worth it. Generally, it costs companies five to seven times more to bring in a new customer than to keep a current one. That’s a strong case for putting effort into retaining members.
When you’re seeking new members, a lot of your advertising and marketing gets in front of people who are not interested in your gym or are not the right customers. That’s wasted resources. Even the ones who might be interested generally take some time and resources to nurture from cold leads to onboarded members.
On the other hand, people who previously became a member of your gym are already in the system, so no onboarding is required. These people are already interested in:
- The services your business has to offer
- Your gym in particular, since they chose your business over competitors
Is It Worth Keeping Members Who Failed to Pay?
While the fact that members failed to pay dues may be a red flag, there are many reasons this can happen. For instance, they may have:
- failed to update an expired credit card
- been going through a tough financial or life situation
By being understanding, it may be possible to bring a member back into good standing. In contrast, an aggressive approach can push them away for life and cause negative word of mouth that may affect your gym’s reputation. Many people likely desire to pay off their debts and become reinstated as members, but shame, embarrassment, pride, or other human emotions may stand in the way. You can overcome these barriers by being compassionate and making the goal of reinstating the connection more than about the money.
Another possible reason for failure to pay is that the person was unsatisfied with their experience at your gym. In this situation, your gym could use the collections process to discover complaints and see if there are ways to make improvements that encourage retention.
At Aldous & Associates, we use a gentle collections process that is all about helping the relationship between your gym and its members.
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