Membership retention in the fitness industry: A qualitative study and the development of a

predictive model

Helen N. Watts

Dr Jan Francis-Smythe

Overview

• Industry background/ the problem

• Research questions

• Approaches/ literatures

• Design/ methodology

• Sampling

• Results (final template)

• Implications

• Limitations

Industry background

• 2004, 4.2 million adults - members of private clubs in UK

•9.1% of the adult population (Mintel, 2005). 11% (2007)

• Increased governmental campaigning to increase well-being and reduce health problems associated with sedentary lifestyles (Robinson, 2004; UK Government, 1999).

• Rapid growth over the last 15 years to £2.5bn.

The problem

• Poor retention rates of members

• Average retention rate- approx. 60%

(Mintel, 2005, FIA, 2002)

• Membership fees- 76% of revenue

• Driven by economic competition

2000 – 2004 MV ↑ 43%, growth ↑ 30%(Mintel 2005)

‘any industry that is losing nearly 40% of its customers on an annual basis needs to scrutinise itself very carefully and ask if it can do more to try to retain their business.’

(Mintel, 2005)

• Retention- cheaper than acquisition (Reicheld, 1996)

Research questions

• What determines cancellation decisions?

- satisfaction ratings?

- members’ usage levels?

- intention to cancel?

• What makes members give good ‘word of mouth?’

Existing approaches

• Health psychology - physical activity• Consumer psychology - satisfaction/ service quality

• Mostly measure either activity levels or intentions, not actual cancellation decisions

• Mostly descriptive or concurrent, not predictive

Mixed design

1. Telephone interviews

2. MRQ

a) Concurrent b) Longitudinal

3. SEM of questionnaire results (n=500+)

4. Interviews at the end of/ exit from longitudinal study

QUAN

qual

QUAN

qual

InterpretationMethod

A priori themes

Retention

The club The activity

CommitmentBrand identity

Service quality

AttitudeSubjective

norm

Perceived behavioural

control

Telephone interviews

• Literature review- a priori themes

• Recorded interviews (n=25) using Skype and Callburner

• Approx. 23 minutes each

• To avoid biased data and provide comfort

• Manually transcribed and thematically analysed

Sampling

• Maximum variation

• Initial pool of 72, 24 current, frozen and ex members (expecting 50% response rate)

• Most non-response due to invalid numbers

5 yrs (n=2)

1 yrs (n=2)

3 mths (n=2)

X15 pm (n=2)

x5 pm (n=2)

X1 pm (n=2)

Length of membership

Monthly usage

Current members

(n=12)

Frozen members

(n=3)

Ex members

(n=10)

A priori

The club The activity

CommitmentBrand identity

Service quality

AttitudeSubjective

norm

Perceived behavioural

control

Final template

The club The activity

CommitmentBrand identity

Service quality

AttitudeSubjective

norm

Perceived behavioural

control

The individual

Social Physique Anxiety

State anxiety

Social identity

Rapport

HabitSelf-

determination

Service quality “Well, I just think my club has got everything, good classes, cleanliness...

Brand identification “I’m not one of those people that needs a really posh club… that’s what I like about it.

Commitment “The fact is, if another club as good as mine opened up closer to where I live, I’d cancel my membership in a shot. But at the minute, there’s you know, no alternatives for the same monthly price”

Attitude “Yeah, I think going to the club really helps stop me from piling on the weight and stay a bit healthy!”

Subjective norm “My boyfriend always tells me off if I’ve not been to the club this week, says it’s a waste of his hard earned money!”

PBC “The fact is right, that for some people, they can go to the club when they want, for me I can’t always go…when I’ve got to stay late at work…”

Habit “I’m one of these club nuts, that when the clock strikes 5pm, I say to myself “right, off to the club”

Social identity “I just want to feel like I belong somewhere, some clubs I’ve been a member of are just really cliquey”

Rapport “Not everyone’s like me , but I always feel like I want to belong somewhere. I like it when I go to my greengrocers and they talk to me... Whereas you don’t really get that in a supermarket do you... Which is what my gym is like really, a supermarket.”

Social PhysiqueAnxiety

“For me, the best thing about going to my club is that no one is looking down their nose at you”

Implications

• The same club- different experiences for different members

- different levels of rapport and feelings of identity

- different levels/types of anxiety

• A club can be also be a place of anxiety as well as well-being

• The need for individual profiling and monitoring throughout membership

Limitations

• Low number of frozen members

• Same interview technique used for different groups- concept mapping may have been better for ex members

Any questions?

Thanks for your time, enjoy the rest of the ICSS