For many businesses within fitness and health, member loyalty is a hot topic. However, does it really pay off to invest in member loyalty?
We have looked into some statistics proving that it’s worth investing in member loyalty. Check out the 7 statistics in this blog post.
Retention costs vs. Acquisition costs
It can be tempting to just focus on attaining new members at your facility and – maybe – deprioritise retaining your current members. However, that can become a costly strategy.
Studies show that it costs 5x more to acquire a new customer compared to retaining a current customer.
In the long run, that can mount up to a substantial amount of money that will exceed your retention costs considerably. In terms of costs, focusing on member loyalty is a much better investment.
Sky-rocket increases in acquisition costs
Let’s stay on the cost side of the acquisition. Even though acquisition costs might be high right now, tendencies show they are only moving in one direction – and that’s up.
Profit Well reports that over the last five years, acquisition costs have increased by 60%. And there is no indication of this “trend” slowing down.
If you want to become more cost-efficient, your acquisition costs might be a great place to start cutting down and instead focus more on member loyalty.
A small effort can pay off on your profits
Let’s have a look at the more fun part – potential profit increases. Investments will only be classified as good investments if you can see that profits will exceed costs.
That’s also the case when investing in member loyalty. It has to be worthwhile in the long run. Fortunately, research shows that member loyalty is a very good investment.
Bain & Company and Harvard Business School reports that when you increase your customer retention rates by 5%, it will increase your profits by 25-95%.
Speed up your business growth by focusing on loyalty
Not surprisingly, increasing your profits will have an impact on your business’ growth potential. The increased profits give your business the financial latitude to focus on the important investments that will grow your business even further.
If you want to grow your business, member loyalty might be the way to do it.
Studies show that “Businesses with the highest loyalty and NPS scores in their industry segments grow at more than twice the rate of their competitors.”
This indicates that focusing on member loyalty is a profitable way to speed up your business’ growth rate.
New offers? Your loyal members will receive them well
From time to time, you might introduce new offerings at your facility. For instance, new classes, new PT programmes, new events or new products that can be purchased at the reception.
You have probably already noticed that it is way easier to sell these new offerings to your current and loyal members compared to new members.
And that is not a unique case at your business. According to research, existing customers are 50% more likely to try your new offerings compared to new customers.
Kickstart your upsales strategy by focusing on loyal members
We will continue the focus on selling to current members vs. new members. Let’s say you are trying to upsell a product, a service or something else at your facility.
In walks a new member and a loyal member that has used your facility for months – or even years. Who do you think will be most likely to buy your upsale offer? Correct – your loyal member.
Actually, research shows that the probability of buying your offering is 60-70% for the loyal member – but only 5-20% for the new member. That’s worth having in mind if you want to set an effective upsales strategy.
Increase spending from loyal members
Based on research, we now know that it’s easier to sell products/services to your loyal members. But did you know that your loyal members will also spend more on your business?
Loyal members tend to trust your business more – meaning they will have a higher tendency to spend more. Research also backs this. Studies show that loyal members will spend no less than 67% more compared to new members.
Key takeaways – what you can learn from these statistics
So, what can you learn from these statistics? Aren’t they just numbers? No, there are so many learnings in these statistics. They give you a clear indication of how effective a greater focus on member loyalty can have on your business.
- Increase your profits
- Increase your business growth
- Optimise your upsales strategy
- Optimise your cost-efficiency
So, what are you waiting for? Start giving your member loyalty more focus, and access the many advantages it entails when done correctly.