M ember retention and loyalty though outwardly similar terms are different business wise and from customers point of view. Member retention refers to your brand’s ability to gain repeat business from a member whereas loyalty goes beyond financial transactions. Both imply the member continues to use your services.
Retaining members should be a part of your business strategy.
You might think as members leave, new members will arrive, however, there is no guarantee that this will happen. To be successful, it is important your existing members continue renewing their memberships. The longer the member pays for your service, the better for your business.
Retention and loyalty from customers point of view
From the customers point of view a successfully retained member will find your fitness service “pretty good” where as a loyal member will find it “amazing”.
A retained member will passively look for better deal options in case your service fails. A loyal member will never switch to any other service because they are completely satisfied with your offering. A retained member do not actively promote your service whereas a loyal member will never shy away from recommending you to their contacts. They feel a certain sense of belongingness with the brand. Here, it is important you reciprocate their loyalty by timely rewarding them. It can be in the form of reward points which they can later redeem for a personal training session, discount or some merchandise.
Retention and loyalty business-wise
Business wise, when member retention is the goal, the approach is more reactive. The problems are solved after they appear. When member loyalty is the goal, the approach is more proactive. The focus is on eliminating problem before they have a chance to appear.
Let's dive in an example to understand the difference between reactive and proactive approach. Imagine, you as a fitness studio owner visit the workout area in it's peak hours. You notice that the lower leg machines are not being used by majority of the members and the treadmills are always in use. Using this information you could swap out the leg machines for more treadmills to provide your members with more equipments they use. This is a proactive approach. You anticipated the problem and worked out a solution. The reactive approach would be to wait for the members to complain about the lack of treadmills and then take an action.
How are they calculated?
Member retention can be measured as a percentage value for all members during a predefined time period whereas there is no mathematical formula for measuring member loyalty. It is measure for each member in particular.
Which is better?
Building a loyal member base takes time and cannot be done overnight. Your exceptional service should reach each new member joining. A business built on good-will will thrive longer. To conclude, it is preferred the focus should be on building member loyalty as not all retained member is a loyal client whereas every loyal client is a retained member.
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