Handling cancellations effectively
Recent research from Xplor Gym found that the majority of former members quietly quit. By taking a strategic approach to handling cancellations, operators can gain greater insights into why members really leave and increase retention.
Health and fitness club management software business, Xplor Gym, recently partnered with research company Active Insight and consultants, GGFit, to study the state of attrition in the UK health and fitness market. And to provide operators with actionable insights.
The study looked at Xplor data from over 700,000 gym, health club & leisure members who pay by Direct Debit in the UK and Ireland. This dataset included information about 370,000 members whose membership was cancelled between January 2017 and April 2023.
Knowledge is power
The research found 48 per cent of people tell operators why they’re cancelling. While, 52 per cent didn’t reveal a reason for leaving – including 40 per cent who left without directly cancelling with the operator, who only found out when they recorded a failed/rejected payment.
“There’s a massive opportunity for operators to make small changes to gain better insights into the member experience and identify areas for improvement that will result in fewer cancellations,” says Xplor’s Dave Alstead.
By fostering a culture where members can openly give good and bad feedback, knowing that it will be taken seriously and followed up on, operators can uncover areas for improvement before members cancel. This will also encourage more members to cancel directly and openly share why, so operators build richer insights that can be used to enhance the member experience.
“When members cancel and tell operators why, there can be opportunities to follow up,” explains Alstead, “and by strategically choosing to follow up with those leavers where the biggest impact can be had, operators will sometimes be able to recover members and, in most cases, dive deeper into exact reasons for cancelling.”
Strategically follow up with leavers
“Operators should start by looking at the different leave reasons members give and choose to focus on a few specific reasons,” says GGFit’s Guy Griffiths.
The best follow up approach with people who cancel will differ for every operator. Generally this needs to be influenced by the volume of cancellations, leave reasons available, ways of managing feedback, technology available, and staff capacity and skillsets.
The study found some common reasons for cancelling that tend to be most actionable for operators. These include:
Lack of use / time / interest (13.7 per cent of cancellations)
Cleanliness (5.7 per cent of cancellations)
Cost / financial reasons (3.6 per cent of cancellations)
Not met expectations (2.3 per cent of cancellations)
Where volumes are high, operators can also segment these reasons further by member demographics. And by any more detailed cancellation information that has been provided.
“The primary goal should always be to find out more about leavers, to learn from them, so the volume of leavers can be reduced. The secondary aim is to see if leavers can be recovered,” explains Griffiths.
Lack of use, time, and motivation
The study found that 13.7 per cent of cancellations happen as people haven’t made use of their membership as much as expected, they’d struggled to find time to visit, or simply lacked the motivation to go.
Diving deeper into the exact reasons given by former members in this group:
74 per cent cited lack of use
25 per cent lacked time
1 per cent lost motivation, were disinterested or saw little progress
With this group, the follow up goal will normally be to learn if there’s anything else that could have been done to support them.
“Operators who use Active Insight’s Recovery Focus platform find that upon cancellation an effective conversation that signposts the member back in can lead to an increased length of stay. For example, if a member is leaving as they’re not achieving their goals, offering a 1:1 programme review can win the member back,” says Active Insight’s Julie Allen.
Cleanliness concerns
5.7 per cent of cancellations happen as member expectations around cleanliness had not been met. This reason was cited consistently across the sample reviewed with no further reasons recorded. Even across age groups, close to 6 per cent cancel due to cleanliness concerns, this only increases to 7.8 per cent for those aged 75+.
The positive news is that this is arguably the easiest issue to fix, especially if operators can encourage people to give more specific details. Address any concerns and put in place practices to keep cleanliness levels high.
Operators already do a fantastic job of keeping equipment and facilities immaculate – and that less than 6 per cent of cancellations happen due to cleanliness concerns is testament to this. The more operators show and tell people about the efforts taken to keep facilities fresh and hygienically clean, the lower this percentage will be.
Cost & financial worries
On average, 3.6 per cent of cancellations happened for cost / financial reasons, and, in light of heightened living costs, the study explored this topic in more detail.
Analysing how many members cancelled for this reason each year in the study period, it was observed that 4.4 per cent of cancellations happened due to cost / financial reasons in 2022 and early-2023.
This is slightly higher than the average of 3.6 per cent. And only higher than 2017, when 4.1 per cent of cancellations were for this reason – 2017 saw lower than usual consumer spending due to stagnant wages and increased inflation following the 2016 Brexit vote.
Looking across the whole period studied and diving deeper into the exact reasons given by people who cancelled due to cost and financial related reasons:
88 per cent simply stated financial as a reason for leaving
5 per cent had received a price increase
5 per cent felt prices were too expensive
2 per cent cited other cost-related reasons
“When members cancel for cost or financial reasons, a cautious approach is needed when following up as this topic can be highly emotive,” says Alstead, “above all look to see if there’s support you can provide now or in the future to encourage these members back.”
Operators can look to past usage patterns, as well as any details provided upon cancellation, to identify the best approach on a member-by-member basis. If a member has visited on a frequent basis in the past, even if that’s two to four times a month, they are more likely to come back when finances allow.
Expectations not met
2.3 per cent of people cancelled their membership as the reality of their experience did not live up to expectations. Diving deeper into more specific reasons why these members said their expectations were not met, 73 per cent said this was due to facilities.
Further to this, 12 per cent felt clubs were too busy or lacked capacity to attend the classes and activities that most appealed to them, 11 per cent cited service issues, 2 per cent had parking problems and 1 per cent felt their expectations were not met in other ways.
These reasons all leave ample opportunity for operators to follow up with members to understand more, especially where facilities and service levels haven’t met expectations. Operators can make positive changes to ensure members are not left disappointed in the future, so fewer members will cancel for the same reasons.
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