- The average business doesn’t due great with client attrition
- It is easy to track month-to-month
- 7-12% more expensive to gain clients than to keep clients
- Stop involuntary attrition
- Credit cards expire, people get new accounts, etc – make it easy to pay
- Proactively update credit card info
- Use down-sells if necessary
- Think of ‘lifetime value’ vs ‘highest offer’
- Stop voluntary attrition
- Minimize by targeting correct people
- Onboarding needs to be strong
- Have simple indoctrinating – more is not better
- Associate joining as quick win
- Weekly check-ins/Stay visible/Touchpoints
- Integrate mindset – reassurance, inspiration, applause
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Hey, Pat Rigsby here and in this episode, we’re going to go through the third part of our recurring revenue blueprint series. This time around, we’re going to talk about retaining clients. We’ve talked about crafting our business model. We’ve talked about acquiring clients, but now we’re going to work on improving retention. So we’ve got a lot to cover.
Welcome to the fitness business school with Pat Rigsby, the podcast for fitness entrepreneurs who want to make more income, have greater impact, and enjoy more freedom in their ideal business. If you’d like an accelerated route to these goals, email me at [email protected] and put BGA in the subject line and I’ll get you all the details about our business growth accelerator program.
One of the interesting things that I’ve noticed in the fitness industry is the average business owner does not really do a great job with preventing attrition or at least trying to mitigate attrition. They, they probably almost always think they have good retention because the people who are engaged and visible, the people they get to know for the most part stay right. And if the majority of people are staying, we feel like attrition is low, but most people in the fitness industry, most people in the online world, they don’t track their numbers. They don’t know their month over month retention rate. And that’s something that, you know, for the better part of a decade, I’ve probably really tried to hammer home to people. It’s a simple number to track. You know, how many people did you have on day one of the month and of those people, how many people are around on day one of the next month? So not the new people, but just those same people that, that started the month with you. How many of them stick around? And so that’s our retention rate. And I, it’s just amazing how few people track that, but you know, there there’s been so much research out there that it’s probably one of the first things I heard when I started to study business was how it was seven to 12 times more expensive to acquire a customer than it is to retain one. So, you know, we should be focused more on retaining the people that we have.
So I’m going to talk to you about basically two different sides of attrition, the voluntary attrition and involuntary attrition. And it’s interesting because there are, you know, I don’t think people think about it that way enough, but they should. So let let’s start with involuntary attrition in voluntary attrition is basically people kind of fall off and maybe they don’t want to maybe you know, maybe it’s just, you know, a credit card expiring you know, maxing out a credit card, something them switching banks, bank accounts, and you kind of getting lost in the shuffle you know, them losing a credit. So they’d get a new in the mail. I can’t tell you how many subscriptions that, that I’d see in when I’d get a new credit card. So if we want to minimize involuntary attrition, the first thing we want to do is make it easy to pay. We want to make it super easy to pay us. So we’re not going to require somebody to bring us a check every month, we want to automate things. We’re going to use the payment method. That’s easy for them to, to, to work with. We’re going to really make it easy if they need to update their credit card. We’re going to make it easy to do. We’re definitely not going to make it cumbersome for somebody to continue to pay us. And then kind of on the heels of that, you know, I just mentioned updating credit cards, proactively update credit cards.
If you, you know, if you have a list of credit cards and you see that, you know, cards are going to expire within the next 90 days or 60 days, reach out and proactively update those cards so that you don’t hit that, that point where somebody’s card expires. And then even if you know, even if they want to continue, maybe you have a month without payment. Well, it’s, it’s a lot easier to keep somebody in continual payment than to say, well, you know what? You missed four months of payments. So you owe us for that, that, that is a much tougher thing for somebody to swallow. So proactively updated credit cards and then have down sales of need. That’s one of the smartest things that, that I’ve seen people do. And we adopted it as soon as I, I learned that when it came to the different things that we did, whether it be offline with training or health club or online moving people into something like virtual fitness mastermind, if they don’t want to continue at the end of their initial term with business growth accelerator have down sells because ideally we want somebody to stay under our care. We want them to really always be part of our community. We want to always be there as a resource to them. So if that means having something to down, sell into that, that’s okay. Like I think of the lifetime value of somebody not, Hey, are they all paying their highest possible transaction fee? Now, admittedly, a lot of times, the longer that somebody is with you, the higher their monthly value exchange is going to be. But the, the thing about it is I’ve had plenty of people who you know, were clients of mine 10 years ago and stayed loosely connected through like virtual fitness mastermind.
So, you know, our lowest cost subscription and then say, Hey, you know what, I need a little bit more help. I need a need to do something different. So, you know, they might rejoin and get more involved coaching. And it may be several years between, but by staying connected with them, by staying top of mind, you’re able to maximize that value exchange and keep them around. So that’s been huge for me and I think it would be the same for you. And then finally, we see a lot of people, especially like during the pandemic, this, this really ramped up. Even more people pausing people saying, look, I need to pause my membership. You know, you have people that pause memberships for any number of reasons. Maybe they go on vacation, maybe their financial situation changes, whatever else. Well, Apollos, isn’t a canceling. You need to be clear about that. If somebody chooses to pause, then they need to know the billing will automatically start at a predetermined time. It’s not, Hey, we’re going to pause you. And you’re going to unpause whenever. If, if somebody wants to cancel, don’t let them just pause. And that kind of act as a cancellation, because what that does is it allows them to still feel connected without paying, without being involved. And, you know, there, there needs to be like part of human behavior. Part of motivation is that pain of loss, like you know, they need to, to feel the pain of loss if they’re actually going to quit. And if you give them a pause into perpetuity, they never feel that.
So that’s minimizing involuntary attrition on the flip side of this, there’s voluntary attrition people just saying, Hey, I don’t want to continue. So it’s going to happen. People are going to move. People are going to change interests. People’s financial situation will change, but how do we minimize this? Well, first we need to target the right person. Bringing the wrong person into what we do is pretty shortsighted. And I’ve been guilty of doing it myself, a handful of times you know, bringing somebody in who isn’t a good fit because they’re not going to be somebody who can execute the plan. They’re not somebody who want accountability there. Maybe they’re not good for the culture of the business. They’re not going to fit, but making sure that you target the right person and knowing that sometimes, you know, you’ve got to step past the immediate gratification of getting a client or a member because they’re the wrong fit and just continue to pursue people who are the right fit. So that’s first, second onboarding. And this is something that I will tell you has been more challenging than probably any part of running a recurring revenue program is because it’s, it’s critical. It’s probably as important as anything that you’re going to do, because if people aren’t using things they’re going to leave or they should leave, even if they don’t leave, they should leave because there should be a value exchange. And so we need to have strong onboarding.
We need to get somebody indoctrinated into what we have to offer and how it’s going to help them. We need to make it simple because I can’t tell you the number of times people have told me they’ve been overwhelmed, but when they join virtual fitness mastermind or something early on you know, more is not better. The person joining usually has this problem they want to solve and they need a simple next step, not 10 next steps. So onboarding is huge. Ideally on boarding has a human interactive element, whether it’s one-on-one or group we’ve always found that interactive onboarding is infinitely more successful than just trying to do it via email and watching videos. The more somebody is interacted with their onboarding, the better off we’re going to be. And then they need an immediate win, right? Like they need to associate what you do and what you offer with being successful in reaching their goals. So find things that they can do to get quick wins. We’ve tried to get people to use some of our most effective, simple, easy to execute promotions. We’ve tried to get them to, to just deploy things very quickly. You know, I think when, when, when Holly started her workouts always having kind of modifications for the workouts as somebody could get and actually complete a workout successfully, instead of feeling like, well, Hey, I’ll go do this. When I get in shape. I think things like that where somebody can get started and start to feel successful. I, I think it’s critical. And I think that like, if you’ve ever paid attention to Dave Ramsey and you know, the whole financial piece methodology, he teaches, he talks about this debt snowball. And the first thing that they do is like pay off the small credit card first, even if it doesn’t have the highest interest rate or whatever else pay off the smallest debt first, and that gives you momentum. And it basically gives you confidence, like, Hey, I’m in the right place and this is working. And that’s the same thing that we want here. We want immediate wins. And then you know, we, we need to make sure that they have some consistency of execution. We, we need to provide some accountability. I know in our business growth accelerator and ideal business mastermind programs, we send out a weekly check-in where people reply and to me, and, you know, it’s just kind of staying in front of them that way, you know, sure. Everybody’s going to have a week where they’re not on track, but what we don’t want is a week to turn into a month and a month to turn into three months. Because if somebody is not executing for three months or four months, they’re not sticking around. And I know that people will tell you the average membership duration is like three months. Well, we’ve never had that experience with my business, with Holly’s business. We’ve always been able to retain people much, much longer. And I think that, you know, the that’s because of the interactive nature of things and helping to facilitate that consistency of execution. And then finally, I think when it comes to retention, we’ve got to integrate mindset.
People come back for good feelings, for lack of an easier way to put it right. They want to believe they’re on the right path. They want to feel connected to you and to the community. They want to be reassured that they can have success and do what you’re helping them do. And they want to be inspired and encouraged. They want to feel like they have somebody in there and, you know, people will pay for that because it’s painfully absent in a lot of their lives side of your program. So if you’re providing that to somebody as valuable, it’s not fluff, it’s not filler, it’s something that’s truly valuable because you know, they, they need to stay motivated in order to consistently execute. And if you can address mindset, they’re going to be so, so much more successful. All right, that’s it. That is part three in our three-part series of the recurring revenue blueprint. We’ve talked about your business model. We’ve talked about acquiring clients and we’ve talked about retaining clients.
Now, admittedly, there is far more to this and it can be customized and personalized. I’m really in it. I mean, it’s endless, right? Like you can do this stuff for as long as you want, but I think we, we’ve given you a strong foundation through these three episodes. If you would like to work with me specifically on building your recurring revenue program and really getting past what we covered here and going deeper and customizing something for you and building something out, I’m going to take on a couple private clients to help them do this. It’s fun for me. It’s obviously been the lifeblood of my business. So it’s exciting if I can help somebody else do the same. If you are interested in doing that, just shoot me an [email protected] and put recurring revenue in the subject line. And I’ll get you all the details, but I’m only going to take a couple people to do this. I think it’s pretty involved, pretty exciting, and I think it will be a lot of fun. So [email protected], if you’re interested in seeing how we might be able to work together to craft you a recurring revenue program, talk to you soon.
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