Box management indicators: how to avoid Churn Rate

Feb 14, 2022 | Gym management

Traditionally, Churn Rate has been considered one of the main enemies of any box. To avoid this, it is important to control the KPIs of your centre, a sector where loyalty is very difficult to build. But if we change the perspective, this problem can be turned into an opportunity for improvement.

What is Churn Rate in a box?

Turnover rate is one of the main gym management metrics and refers to the number of members who decide to cancel their membership, regardless of the reason for cancellation. It is called this because, after such a dropout, it is possible that a new subscription will emerge in accordance with the natural dynamics of the sector. In other words, it is a rotational thing. However, this indicator can expose two problems with catastrophic consequences for your box:
    • If the rate is high, it implies a sign of general dissatisfaction among users.
    • If we don’t have rotation, there is no new subscription for every cancellation, which is a continuity problem.
In order to take advantage of the KPIs in your sports centre, it is advisable to analyse them constantly. Many centres choose to include it in their annual internal evaluations. We, on the other hand, propose that you do it monthly. This will give you more time to act and take measures to redirect the situation.

Why is it important to measure customer turnover?

Keep in mind that if your users leave, they always leave for a reason. This can be extrinsic (personal situation, work) or intrinsic (dissatisfaction with facilities, services). Whatever the case may be, you should be aware of it, as you will be able to stop the loss of customers as soon as you find out why. On the other hand, this is one of the most popular fitness metrics, especially in recent times. The athletes who come to your box know what it’s like to train at home since 2020. If you have not accompanied them during these moments, they may begin to see that your centre is dispensable. The feeling of belonging, linked to your communication, plays a decisive role in this respect.

How to calculate the customer turnover of my centre?

This is the most commonly used formula for calculating customer turnover:

Customers in a given period – Cancellations in the same period = Result 1

Result 1 + Additions = Result 2

Generally, a standard time period, such as a year, is taken as a reference. However, you should bear in mind that there are many fluctuations during the twelve months. For example, the first months of the year and September usually receive an avalanche of users that slowly eases off. A very normal phenomenon in this sector, called seasonality. But what does this information bring you? Experts estimate that the average turnover is usually between 20 and 30%, with peaks slightly exceeding the latter figure. If your studio has a higher percentage, it is a clear indicator that something is wrong, especially if it happens at the same time as the following:
  • Monthyl fees increasing.
  • Decrease in supply or complementary services.
  • Loss of exclusive subscriber benefits.
  • Opening of a new box in the area.
Similarly, if the percentage rises in the summer months, mainly August, this is another worrying sign. If your customers drop out just when more people are signing up, it means that they are going to another centre. Therefore, the KPI’s for a box can only be useful if you ask yourself why the figure is being used.

Strategies to improve Churn Rate in your box

Knowing the churn rate in depth is a strategy with many benefits for the gym. It is essential to avoid the worst thing that can happen to your centre: running out of members. However, remember that you will only benefit from its results if you analyse them monthly.
1. Awareness The first thing you need for improving the churn rate is to know the reason. Imagine that situation: 4 users have left your centre this month. What motivated them to do so? Did they have been in your centre for a long time or were they, new clients? If the second case is your case, you don’t have to worry too much, but you should be concerned if it is the first one. Asking them the moment of leaving is too abrupt and often leads to the worst opinions. For this reason, the best thing to do is to consult their reviews periodically, with emphasis on the aspects that they recommend to improve. If you tailor the facilities to their needs, they will feel comfortable and not leave.
2. Distinctive value Selective experience is another of your greatest allies to decrease this metric. Avoid general approaches and target a specific athlete profile so that you can offer what they are looking for. Remember that, whether beginners or professionals, everyone is looking to improve and raise the level of their training. In addition, there are some tips that we recommend you implement:
    • Watch the behaviour: pay attention to the complaints your customers have, they are more important than you might think.
    • Read their minds: probably you can’t do this literally, so it is essential to study their profile and anticipate their demands, asking the right questions at the right time.
    • Commitment to training: if you have a team of well-trained monitors, users will feel supported.
On the other hand, we are going to propose an economic investment. Cross-training equipment is available in all studios, but what additional services does yours have? Can they receive a personalised routine, relax with a coffee or ask for a diet plan? If your clientele has to leave the centre for these reasons, they will end up going to a more comprehensive centre.
Finally, we are going to show you a 21st century strategy: creating culture. Your sports facility needs an essence that defines it from the competition, a set of practices that employees follow. You can either choose to reflect the importance of accompanying the athlete during their routine, or base the culture on improving yourself and performance.
In short, fitness KPIs provide essential information that you will only be able to take advantage of if you devise appropriate strategies. Remember that this sector has strong competition, which you will only overcome if you follow the advice of your customers. Those who visit you have a lot to show you in order for you to succeed.
Are you curious and want to know what the studies say? Take a look at our article about loyalty in gyms.

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