Key takeaways:
- Membership suspensions significantly hurt fitness business revenue.
- Identify and address common reasons for membership suspensions.
- Implement policies to limit and manage suspensions effectively.
- Communicate consistently with suspended members to prevent cancellations.
- Adjust revenue projections based on suspension rates to avoid financial surprises.
Membership suspensions are strangling fitness businesses.
Or at least, that’s what I’m hearing from many of the business owners I mentor and from the wider community in general.
They’re happy with their membership numbers, and their financial projections look healthy. But at the end of the month, these projections never materialize, and the bank account never looks as healthy as they were expecting.
Memberships on hold seem to be a big part of the problem.
Not only do they result in lost income during the suspension, but suspended memberships often lead to canceled memberships. I don’t have exact data on this, but I’d bet good money that the businesses with the highest number of suspensions also have the lowest retention rates.
So I want to unpack this and explore some of the reasons for suspensions, how to reduce their frequency and length, and some business strategy changes you can make to stop them from being such a damaging part of your business.
To help unstrangle your fitness business, we need to start by examining each of the reasons people suspend memberships. The strategy here is that by putting steps in place to remove the need for suspension, we can stop it from happening in the first place.
The first step here is working out why people actually suspend. I can’t tell you these reasons for your business—you need to have good record-keeping in place, where you have detailed notes on why every member has ever suspended. You’ll find there’s an 80/20 relationship here, where 80% of your suspensions are caused by 20% of the reasons. And this is good news because it tells us what we need to work on. Again, I don’t know the most common reasons for putting memberships on hold in your business, but finances, motivation, lack of time, and injury usually top the list.
So step one is identifying the most common reasons for suspending. Step two is putting steps in place to remove the need for suspension. Let’s look at the example of injury suspensions.
Your client or member puts their membership on hold because an injury means they can’t train properly, or the injury is being aggravated by their training. Incidentally, this is also a leading cause of client departures.
So what can we do about that?
At my business, Range of Motion, we have a system to help clients train around injury without departing from their normal programming. We’ve built a detailed resource to help empower our clients to work with their Personal Coach to modify their training. We’ve created a hierarchy of injury modification, from slight changes to a movement for minor injuries to major changes for major injuries.
For example, let’s say someone has a back injury that limits their ability to deadlift. A minor change might be to reduce the weight or volume. A slightly bigger change may reduce the range of motion, such as by doing a rack pull. A bigger change may see the movement being replaced with something different, while still keeping the same posterior-chain, hip-hinge dominant muscle activation patterns, like a prowler or sled push.
We’ve built this resource into the programming software we’ve created and have a huge poster on the wall at our physical location where people can easily modify their training for a wide range of movements and injuries.
By building these systems, we’ve reduced missed training due to injury to virtually zero.
We also have a lot of gamification built around training consistency. In our programming software, users are notified of their training streaks—the number of consecutive weeks of training they’ve done. You’d be amazed at the power of this gamification for keeping people engaged and attending.
This ‘injury reason’ is just one example—you need to identify the reasons for suspensions, then address each one to remove that excuse.
Once you’ve gone upstream like this and reduced suspensions at their source, it’s time to look at your policies around putting memberships on hold.
There are several strategies people traditionally use, like limiting the number of suspensions per year, limiting the length of suspensions, and requiring two weeks’ notice before a suspension can begin.
Tim Karajas from Extension Fitness has a policy that echoes the terms people might expect to see in a full-time employment contract. He told me, “…everyone gets a maximum of four ‘sick days’ and four weeks ‘holiday’ per year. So, not counting any leave I take, payment is locked in for 44 weeks/year if a client takes all of those breaks.”
If you’re not already doing these things, these contractual strategies are probably something you should consider implementing.
I’ll add a few ideas to the mix that you maybe haven’t considered.
One idea is to not allow suspensions at all, but instead, allow your clients to ‘bank’ their sessions for future use. This works well for Personal Training, Semi-Privates, and Group Training. Greg and Seth Maserow, the owners of BodyMBrace Studios, use this strategy, and they have zero problems with suspensions. Seth told me, “We actually don’t do suspensions as such. We have a ‘plus one’ system allowing our members to ‘bank’ their sessions to use at a later date. It works for us as a continuous stream of direct debits.” The swim school we take our daughters to does the same; if we miss a class, we get credit for a make-up class.
Another strategy is to use the principle of scarcity. This is something both Scott Hook from Vasse Strength and Conditioning and Nicky and Ange from Fitness Revolution do. Both these businesses have caps on member numbers. Let’s say you have your member numbers capped at 150 people, with a waiting list to get in. If someone suspends their membership for too long—maybe four weeks—you could move them from suspension to the bottom of the waiting list and give their place to someone who’s waiting.
A less drastic version of this could mean that if people are suspended for too long, they lose their preferred PT time or lose their spot in their favorite peak-time class.
Either way, using scarcity calls on the powerful human tendency towards loss aversion to help people stay consistent with their training.
Whatever policies you choose, you need to clearly communicate them, and then be consistent in upholding them. I know many business owners who have great suspension policies in place but then fail to adhere to them. They become their own worst enemy and the reason for their own business’s shortcomings.
Look, sometimes, you’ve done everything you can to remove the need for suspensions, and you’ve got an updated suspensions policy, but there will still be memberships on hold. It’s a cost of doing business. In this case, your focus then becomes reducing the length of the suspension (if your policy hasn’t already capped that) and ensuring the suspension doesn’t turn into a cancellation. And there’s one simple thing you can do: communicate. Every single week, each of your suspended members should hear from you. Maybe it’s a quick check-in to see how they’re doing. Maybe it’s a handful of rehab exercises that will help their back. Or a recipe you’ve found that you think they’ll love. Or a photo of the girls from the 9 am class looking sad because they miss their friend. Just because they’re not paying you money doesn’t mean you should stop providing value and care. If you do that, they’ll be back, and they’ll be back sooner.
Ok, let’s get a little more ‘businessy’ and talk about some higher-order ideas that can help with this issue.
If you’re getting blindsided by suspensions, there’s a hard truth you need to hear, and it tells me there’s a bigger problem in your business than a few people putting memberships on hold.
The number of people who come running to me in the middle of winter with dwindling direct debits tells me that they’re not correctly predicting the seasonality of their business. It happened two years ago, it happened last year, and it’ll happen again next year. So you shouldn’t be surprised; you should be prepared.
These losses of income should come as no surprise. If you’re tracking the numbers in your business as you should be, you’ll know that, to a degree, these suspensions are a part of business. And you should know they’re coming.
Your projections need to be adjusted based on this historical data you’ve got from your KPIs—your key performance indicators. If you know your historical numbers, you can predict future numbers.
Some of the smartest fitness business owners I know track their numbers intimately.
Ange from Fitness Revolution, who’s also an accountant, has calculated that her business has a 12% suspension rate. That means, at any time, 12% of her members are on suspension. Or, put another way, memberships will be paid 88% of the time—or 46 weeks of the year. And she knows this—it’s no surprise. So when she’s doing projections, she bases it off this. If she has 100 members at one time, she calculates revenue based on 88 members.
Tim from Extension Fitness does something very similar, but instead of 46 weeks, he assumes clients will attend 44 weeks of the year.
And neither of these smart business owners have their bottom lines suffocated by suspensions because they expect them.
So once you know your suspension rate, use this as a more accurate multiplier of your revenue, and you’ll no longer be surprised.
But then, what can you do with this data? Well, if you need 100% attendance rates for your business to be successful, and you have 12% of memberships on hold, then you either need 12 more members, or you need to increase your membership prices by 12%.
You can see there’s a three-pronged attack here. We need to reduce the number and length of suspensions, change our policies to control suspensions, and know our numbers so that drops in revenue aren’t a surprise and we can adjust targets and projections.
If you can do these things, you’ll have a more resilient and more successful fitness business that’s less reliant on things outside your control and more reflective of your hard work.
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