The $ Impact Of Client Retention
It’s january and already I’ve had 4 glossy flyers for local gyms come through the door. January is the month of new year resolutions and all that good stuff so it’s prime time for gyms to spend $ on local marketing. Lets imagine that each of those clubs gets 200 new clients each - great. Then what? Sending out marketing is a concrete action - you pay to get them printed and sent out and new clients arrive.
What about keeping those clients? Retaining clients is much less concrete than sending out a mailer so it’s an easily overlooked action because the path to improve it is much more fuzzy.
We’ve added a calculators page to the main clubready info site, one of the calculators is a quick and dirty tool to estimate the benefit of client retention.
Here’s some examples.
2,000 Client Gym
Membership Fee - $49 / month
Average cost to aquire new customers - $100
Improve retention by 3 percentage points
= $41,280 additional revenue / year
5,000 Client Gym
Membership Fee - $39 / month
Average cost to aquire new customers - $100
Improve retention by 8 percentage points
= $227,200 additional revenue / year !
There’s a lot of value in keeping clients, everybody knows that, but it’s useful to take a look at just how much potential value there is. The great thing about this type of new revenue is there is practically no associated cost - so it all flows to profit.
January 22nd, 2007 at 4:28 pm
As a manager of a midsize personal training studio, our customer acquisition costs can sometimes be as high as $200 or $300, depending on our marketing efforts for that month. Keeping our clients long term is our number priority. I really like the calculators and will continue to see how they match to our real situation.