Fitness Business School – The Difference Between Connection and Retention

Full Transcript

Hey Pat Rigsby here and in today’s episode, I want to talk with you about the difference between connection and retention. Let’s get to it.

Welcome to the Fitness Business School podcast, the show for fitness business owners who want to grow their income, increase their impact and improve their lifestyle. Be sure to listen to the end of this episode because we have a brand new special offer exclusive for listeners. So stay tuned.

Once the subscription type of model really became paramount in the fitness industry, people having 12 month memberships that either they’re closed ended or auto renewed or people doing month to month memberships or whatever else the idea of.

Retention became paramount and for good reason, right? We, the better our retention rate is, the healthier our bus, healthier our business is. And that is I think that’s very true, but it’s an incomplete statement because sometimes people think of an unbroken membership about, in the same way they think about maximizing lifetime value.

Those two things are different and unbroken membership means, but probably means a few different things. It means that when somebody comes in, they have a positive experience. They stay, it probably means that you’re convenient. You continue to improve and adapt so they don’t get bored. Sometimes it means you’re.

The only show in town and there’s not a bunch of competition. There are a number of reasons why unbroken memberships are a valuable metric for the health of the business, but it’s not the same thing as lifetime value, right? And let me give you a really simplistic kind of way to think about this.

I’ve been doing the business coaching side of what I do for about 19 years now. It didn’t always take up the bulk of my business time because I, at various points, I’ve spent most of my time. Owning a lot of businesses. But during that 19 years, I’ve had a few people who’ve been around almost for the entire duration with a few stops along the way, right?

Like I’ve had a few people that have been clients since between 2006 and 2008, who have been active clients with me for at least 90 percent of that time. But during that span, I’ve also had. Any number of people, hundreds who have been in and out. And so let’s say over a 15 year span, they may be a client.

Eight of the 15 years, nine of the 15 years. Contrast that with somebody who has a hundred percent retention rate and somebody sticks around for 36 months and that’s their unbroken membership, or maybe the average person does stay for 36 months, but then none of them come back. The lifetime value of the person who’s there for eight or nine years.

Everything else being equal, pricing being equal or whatever else, that person is going to be worth more to the value of your business. And so the way that I would think about this is how do we pursue both? Neither of them. In a vacuum is the right answer. Neither of them like we want to keep people engaged and active as long as we can, as long as it makes sense.

But we also have to accept that these are human beings that have plenty of other variables in their life. And sometimes it doesn’t make sense for them to be an active client and that’s okay. We want to create a relationship where we’re showing up for somebody, where we care about them and we’re connected with them in a way that.

They feel very comfortable coming back, even if they leave that they know that this is the best place for them whenever they are going to be an active client. This is the place they want to be active or you’re the coach. They want to have when they’re an active client. And if we think about it that way, it makes a ton of sense.

In fact, there may be people who, let’s say that you run Three or four transformation challenges during the year. And there are people that just sign up for the challenges over the course of time. Let’s say every challenge is 200. That person four challenges a year. That’s 800. If somebody does that for five years with you, that’s 4, 000 for your business.

Don’t spend all your time comparing them to this is what they pay. If they were a subscription member. Compare them to zero, compare them to all the people who aren’t coming in and they are worth 4, 000 to your business. And they’re getting the experience they want to have if they keep coming back.

Recurring visits or repeat guests or repeat buyers says something positive about you. It means you’re creating an environment that they want to be a part of. And sometimes they’re just not going to make this commitment in perpetuity, but Understand that connection and retention are different things.

And then they compliment each other really well. The stronger your connection is, odds are the better your retention is going to be. But the stronger your connection is, the better your reactivation is going to be. The higher your client lifetime value is going to be. And if you’re retaining clients at a 95, 96, 97 percent rate, and then those 3 5 percent that are leaving, still, they come back later on.

Now we’ve got a really healthy business. We’ve got a lot of things working in our favor. We’re creating an environment that we’re not burning bridges. We’re not closing doors on people. And that doesn’t mean you want everybody to come back. Some people are just a bad fit and that’s okay. But on average, if somebody leaves because it doesn’t fit in their life at the moment, but then when it does fit. They come back. Odds are that’s a pretty good indication that you’re running your business the right way.

Thanks for listening to this episode of The Fitness Business School.

Before you go, I have a quick announcement:

One of of the things that we’ve been doing with our current clients is taking them through this Ideal Business diagnostic and really what it is, this checklist that allows you to pinpoint exactly what your business needs next so you can keep improving, keep growing, and build a business that you love to own, one that pays you well, one that allows you to have the impact you wanna have and one that allows you to have a lifestyle that you truly enjoy.

In this diagnostic, we walk through everything and we do an evaluation and can instantly pinpoint what you need to do next to build that business that you want. I’m going to extend this opportunity to get on with either me or my team and take you through this evaluation and fix your business’s most vital needs fast.

So if we take you through this, you’re gonna be able to make those vital changes that you need to finally have what I call your Ideal Business. If you’d be interested in going through this entirely free, risk-free diagnostic with us and learn what you already have in place, what you’re doing well and where are your greatest opportunities for rapid improvement are just shoot me an email with diagnostic in the subject line to [email protected].

Again, an email to [email protected] with diagnostic in the subject line will get
you scheduled and take you through this evaluation to help you build the business you want.