How the wrong marketing can actually hurt what matters: your retention rate.
“Customer satisfaction is useless. Customer loyalty is priceless.” Jeffrey Gitomer
Plot twist: my parents own a tea house.
They sell carbs galore. Delicious carbs, for cheap. They host a lot of private events: birthday parties for old people, retirements, and sometimes wakes.
Because the guest of honor is usually old and tired (or dead and awkward), many of their invitations say “come and go” on them. They mean, “Have a short visit, but don’t stay forever.” So people wander in, have a drink or a tea, stop at the bathroom, and get home before Matlock. They don’t expect to stay for long.
Obviously, we don’t want new CrossFitters to stay only for a few weeks, and then leave. We don’t want them to have an exit strategy. Even when we advertise a six-week challenge, which has a clear endpoint, we try to convince them to stay at the end.
Here’s the problem: when you flood your gym with new people, you dilute the attention given to your current guests.
Greg and I both started as Personal Trainers. We worked with one client at a time. Then, eventually, we added a second client in the same slot. Now our attention was split, but the net benefit to each client was still positive, because they had some support and friendly competition.
When we added a third client, the support and competition became more anonymous, but some clients liked it even better. So the group model evolved.
But if you’re selling group fitness, and the group continues to swell, you’ll soon reach a point where each individual member of the group receives diminishing levels of 1:1 coaching. That makes coaching a one-way conversation (more like group choreography than coaching, really). The client doesn’t have a clear relationship with you or the coaches, and that makes your service a commodity. They can get the same level of coaching from another gym…or from a DVD, really.
To sum up: new clients coming in have a high turnover rate. And long-term clients are tired of the come-and-go crowd, so they start to look elsewhere.
Is this your gym? “We have a few clients who have been with us for, like, ten years. Then we have a bunch of new clients who seem to stay less than nine months.” It’s not the market, friend. People haven’t magically become more wishy-washy. It’s you. And the come-and-go folks are pushing away your regulars.
The longterm clients stick around for ten years because they developed a relationship with you before you were busy. You know their dog’s name, and their wedding anniversary, and they know yours. They bake you cookies, maybe. They really care about you, and they see why you want to grow your business, so they’ll tolerate larger class sizes–for awhile.
The midterm clients came in when you ran classes of 8 or 9. They got some attention in your OnRamp program, and some familiar greetings from you. You called them by their first name. You auto-emailed them on their birthdays. You did the same stuff that everyone else will do for them.
But then their service started to go downhill. Your attention was split between 300 people, where it used to be shared by 100. No one asked them about their progress or their goals or even how their morning went, so they became adrift. And when 10 other people started fighting them for their class times, they probably floated down the block to the next dock.
The long-term veterans don’t need a “founders’ club discount” or lifetime cheap rate. But maybe they need more hugs, or preferential reservation spots in your booking software. They need to feel like the watering hole isn’t getting crowded by hyenas.
Had a big influx of new members? Take some time to fully integrate them. Let them make friends and form connections before you bring the NEXT wave in. No one makes friends at the subway turnstile, but some people can make friends in the car.
“Let’s get home before the crowd arrives” is a really common phrase you’ll hear at a “come and go tea.” You’ll hear it often (and loudly, because old people don’t hear well.) High turnover rates signal “everyone is leaving” to your long-term members, and big class sizes water down your time with them.
The answer is small-batch intake: one person, one referral, one love letter at a time. But if you NEED a ton of new clients right now as triage, go ahead and do a short-term strategy. Just make sure you allow for an integration period of 3-6 months before you do another.
This (I believe) is why Greg once said, “Groupon kills businesses.” He was referring to the flushing effect: new clients pushing out the old with their volume. Like the bathrooms at a come-and-go tea for seniors, the sound of water in pipes is usually heard before of a mass exit.