Customer Retention: Why Fitness Studios Need a Downsell Offer
Ah, the dreaded membership cancellation email (or call). Every studio owner hates to see clients decide to cancel their membership, whether for personal reasons or financial. The goal is always to have the number of new memberships outweigh the cancellations. Yet, when a client comes to you requesting to cancel, how do you approach the conversation? The approach you take might make all the difference in whether you retain the client or not.
Clients cancel for a variety of reasons. The number one reason is finances, which is intertwined with number two: they don’t feel they are using their membership enough. Oftentimes clients cancel with the intention of switching to a more “flexible” option like a punch pass. But what you often see is a client who was once attending regularly suddenly becomes an erratic visitor, showing up for class every once in a while. This not only is a problem for your bottom line; it’s also a negative for the client—they lose the benefit of practicing/moving with you on a more regular basis.
So what’s the fix? A downsell.
You want to have a pricing option in place that acknowledges their need to save money and visit a bit less frequently, which is where a limited membership comes into play. A limited membership gives you the auto-revenue you need each month while giving the client the ability to modify their routine to better fit their current needs. Having a limited membership option allows clients who cancel their membership in the summer, over holidays, etc. to downgrade and keep up their commitment to themselves and to the studio.
As fitness and yoga studio consultants, we also typically recommend studios have cancellation and/or commitment policies in place. We recognize that for some studios this isn’t an option, in which case we encourage studio owners to find the least restrictive policy to encourage clients to give memberships a try. The issue with having a cancellation fee or minimum requirement is that you’re essentially giving a prospect two additional reasons NOT to try the membership. They are likely already concerned about whether they will use it enough, and perhaps the overall cost, and when you tack these policies on top you’ll typically see a lower conversion rate.
Back to the downsell conversation. How do you approach this conversation? When a client comes to you explaining why they need to
cancel their membership, you want to start by hearing their concerns. Sometimes this simple step will encourage them to not cancel at all, and instead reprioritize their usage. Giving them the opportunity to talk through their objections might lead them to a different solution.
While you’re listening to them be sure to take note of whether they mention wanting to keep up their practice. If they are wishing to continue to be a part of your studio but are needing a different option, a limited membership might be the key. By offering a limited membership option, you’re giving the client the ability to make choices that better suit their needs while also retaining the client in the long run. It’s generally better for a studio to have more auto-recurring members than to have members slip to non-commitment based options like a punch pass or drop-in.
Ultimately, the downsell conversation is one you should be prepared for. Clients need to feel heard and you need to have options in place to acknowledge their current needs. Everyone has moments in their life where they have more or less time, as well as more or less disposable income, and addressing their concerns is likely to leave you with an even more loyal client.
Telomere Consulting provides business consulting and marketing services to studio owners in the boutique fitness and yoga space. The Telomere team helps you navigate business strategy from conception to implementation. We provide end-to-end marketing support and would love to hear from you. Click here to book your free intro call. We want you to treat your business the way you treat your body – making the right choices now to optimize its potential for a long and healthy life. Visit us here to learn more.
