Finding Your Retention Rate and Why It Matters

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  • Finding Your Retention Rate and Why It Matters

Back To Basics Yet Again

Even in this digital-first era, when it comes to operating a business, it still all boils down to the basics. By this, I mean a few specific skills and functions that we have addressed in some detail over the years, here on the Gym Insight Blog. But being basics, they never suffer for a little repetition. Of these, membership retention stands out as one of the most critical factors. Small progressive improvements can take you from a struggling small business owner, sleeping in the back office, to the top of your local marketplace.

The economy and culture of North America have entered an era when you can’t deny the power of digital technology. Software and the right equipment make a team that is hard to beat. And yet, if you are concerned about gym ownership fundamentals and success, you can’t help but worry about the core skills that are going to get you where you need to go. Increasing your average retention rate makes every one of your members more valuable to you.

Holding On To Those First Customers

If you start a fitness center or studio, you’ll be thrilled when you get your first members. They are probably the local early adopters, and they base their choices on initial impressions. They are also likely to have friends and contacts that they influence directly.

Here’s the thing about retaining the kind of customers who talk about your business: Not only do they stay longer when they are happy with your service, they tell more people. Make these early adopters your brand ambassadors and they’ll be indispensable to you; as long as they are with you, they’re for you; never underestimate the value of that!

Calculating Your Gym Membership RetentionRetention Rate

Your express retention is as a percentage that you can easily calculate: For a given period, subtract the number of new members gained from the number at the start of the period. Then divide the result by the number of members at the end of the period. You can express this as a percentage; e.g. 0.97 is 97 percent.

For an excellent example of how this works, see the article on this link. Knowing the percentage of retained members each month is the first step toward increasing it. Your retention rate tells you if you are growing your membership or if there’s a problem that you need to address. It also relates to the cost of marketing that you will have to spend to keep your gym moving in the right direction.

Doubling Down On Retention

As your gym business grows, the discipline of retention will serve you well in another way. You might initially do everything yourself or only have one or two highly committed staff members, loyal lieutenants who, like those first adventurous customers, join early and stay with you.

You’ll need to increase your staff and keep the turnover down; that means retention. It’s an expensive proposition to replace restless employees. Fortunately, the methods and strategies that work for customers can also be applied to the team you build to operate the business.

A Tool To Put You Ahead Of Your Competitors

In most of the locations suitable for a fitness center, it’s easy for your members to go across the street or around the corner and find an alternative workout space. That means you have to look at your customer satisfaction efforts as binary; you either thrill them or lose them. But then again, your competitors face the same challenges.

If you can do a better job than the other guys, you can win a marginal advantage as your members stick with you just a little longer than theirs. Increasing your retention rate is one way that will keep you in business when the current competition’s location is being leased out as a new burger joint.

Gym Insight is a suite of tools that include all of the elements that you need to keep on top of your small gym business. Our club management software includes cloud-based retention tools to keep the customers coming back. As for practical tips and methods to retain customers and staff, I’m going to leave that for a future blog post.


Fagan, Lawrence. Is It Time To Hire A Gym Business Manager? March 1, 2016. (accessed March 19, 2016).

Haden, Jeff. Best Way to Track Customer Retention. July 12, 2013. (accessed March 19, 2016).