Customer Retention Strategy for My Gym: Reducing Churn to Boost Profits.
Why Customer Retention Matters More Than New Memberships
When managing my own fitness gym, we track multiple Key Performance Indicators (KPIs) every month. While many gym owners assume new memberships are the most important metric, we’ve learned that customer retention (churn rate) is far more critical.
What is the meaning of churn rate?
Churn rate is the percentage of customers who cancel their membership within a given period, typically measured monthly or annually. In the fitness industry, a high churn rate means a gym is losing more members than it can replace, impacting revenue and long-term growth. Lowering churn improves customer retention, stability, and profitability.
🔹 The Real Problem? High Churn = High Costs
Bringing in new customers is expensive. We invest heavily in marketing, promotions, and onboarding new members—but if they don’t stay, that investment is wasted.
The Real Cost of Acquiring a Gym Member: A Breakdown of Customer Acquisition Costs (CAC)
Most gym owners only focus on the cost per lead (CPL) when evaluating their marketing efforts—but the reality is, acquiring a new gym member costs much more than just the money spent on ads.
📊 In 2023, we tracked every expense that went into signing up a new member—from marketing spend to trainer time, administrative hours, and onboarding processes.
Here’s what we discovered:
Marketing Spend: Generating Leads & New Members
💰 Total Monthly Ad Spend: $1,200
📢 Advertising Platforms: Facebook, Instagram, and Google
📊 Leads Generated per Month: 36
✅ New Members per Month: 29
📌 Lead-to-Member Conversion Rate: 80.5%
📌 Marketing Cost Per New Member: $41.38
At first glance, $41.38 per new member seems like a great number—but that’s only a fraction of the total cost of acquiring a new gym member.
Trainer Costs: Trial Lessons & Initial Assessments
💪 Trial Sessions for Leads:
📌 Trainer Time per Lead: 1.5 hours
📌 Trainer Hourly Rate: $25
📌 Total Monthly Trainer Cost for Trials: $1,350
📌 Trial Lesson Cost Per New Member: $46.55
Since every potential member gets a free trial session, the time spent on non-converting leads still adds to our acquisition cost.
🔹 Hidden Cost? Many business owners don’t factor in trainer time when calculating Customer Acquisiton Costs.
Personalized Training & Onboarding Costs
After signing up, every new member gets a customized onboarding experience to help them succeed in the gym.
This includes:
✔️ Tailored Training Program
✔️ Body Composition & Strength Tests
✔️ Personalized Goal-Setting Plan
👨🏫 Trainer Onboarding Time: 2 hours
💰 Cost per Member: $50 in wages
Onboarding keeps members engaged and reduces churn, but it’s also a real cost that must be considered.
Administrative Costs: Account Setup & Registration
📌 Tasks:
- Helping new members set up their accounts
- Downloading the gym’s fitness app to Setting up payment plans
- Registering personal information
⌛ Time Spent Per Member: 15 minutes
💰 Admin Cost per Member: $6.25
Total Cost of Acquiring a New Gym Member
📌 Marketing Cost per New Member: $41.38
📌 Trial Lesson Cost per New Member: $46.55
📌 Trainer Onboarding Cost per Member: $50.00
📌 Admin Registration Cost per Member: $6.25
📊 Total Average Customer Acquisition Cost (CAC): $144.18 per member
📌 Total New Members in 2023: 348
📌 Total Yearly Acquisition Cost: $50,175
Why This Matters: The True Cost of Growth
Most businesses only focus on the ad spend and assume that’s their true customer acquisition cost.
💡 But in reality, marketing is only 28.7% of the total CAC.
🔹 If we had only looked at the $41.38 cost per lead, we would have severely underestimated our true expenses.
🔹 Failing to account for onboarding, trainer time, and administration could result in setting membership prices too low and cutting profitability.
🔹 Onboarding new members takes a lot of time, our trainer could also use their time to give personal training at a rate of 60$ an hour. If you would account for these costs the costs are even higher.
H4: A lot of new members but a high churn rate.
🚨 Our Reality Check: A 30% Churn Rate in 2023 At the start of 2023, our business consultant noticed a big problem—our gym’s churn rate (percentage of members leaving) was over 30% for the year.
- We had 1,000 total members at the start of the year.
- We signed up hundreds of new members.
- But at the same time, 300+ members left.
🔹 What Does That Mean?
📌 We were losing 30% of our customer base every year.
📌 Churn rates in the fitness industry can be as high as 40%, but that does not mean it’s sustainable or profitable to operate that way.
📌 If we didn’t fix this, we would always be stuck chasing new members just to stay in business.
H5: What is a good churn rate?
Our 2024 Goal: Reduce Churn Below 25%, Ideally Below 20%
For 2024, we set a clear, measurable goal:
✅ Lower churn to under 25%
✅ Target under 20% for maximum impact
To align our team with this critical business objective, we incentivized our two club managers:
💰 Bonus Structure for Club Managers
- If churn is below 25% → 0.75 extra salary month bonus
- If churn is below 20% → 1.5 extra salary months bonus
This ensured that our entire team was invested in keeping members happy and engaged.
H6: Client Retention Strategies were our game changer
It’s significantly cheaper to keep existing members happy than to constantly replace them. A well-managed gym with high retention sees steady revenue, loyal customers, and lower marketing costs.
Why do members churn?
Key Reasons Why Our Gym Had a High Churn Rate
when we were analyzing churn rates in fitness memberships, we discovered several underlying issues that we hadn’t fully addressed. While we were focused on attracting new members, we weren’t doing enough to keep them engaged.
Here’s what we found:
1. Lack of Scheduled Follow-Up Visits
👉 Some members needed regular check-ins with a trainer to stay motivated, but we weren’t proactively scheduling follow-ups every six weeks.
👉 While some members are independent and don’t require extra guidance, others need structure, encouragement, and progress tracking to stay engaged.
🔹 Solution: We implemented mandatory check-ins every six weeks for new members, ensuring they received personalized feedback and motivation. We also did the check-in after three months of being a member. Afterwards we would ask if they needed another check-up, if the answer was no. We knew that the members were adjusted to the gym. The trainers would always check-up on the members if they came in to train again. With this solution we were reducing gym membership cancellation by keeping the onboarding process active for longer than we used to.
2. Inactive Members Were Not Engaged
👉 At first, we assumed that inactive members who were still paying were good for business. They were, in a way, “sponsoring” the gym.
👉 However, after three months of inactivity, most of these members ended up canceling their memberships if given their membership would let them to.
🔹 Solution: We started automated our check-in system. Our members needed to check in before they get into the gym. With this measurement, the administration systems was detecting people who hadn’t been in the gym for 4 weeks. When this was detected, an email was automatically sent to the member. Here is an effective follow-up email for inactive gym members. We used all different kinds of templates and until today we have the best result with this template. Here is a sample letter for a inactive gym member.
Dear (Insert member name),
We haven’t seen you at (Insert Fitness company name) for a while!
According to our system, you haven’t trained with us for the past 4 weeks—is that correct?
Are you lacking motivation or guidance in your workouts? Click the button below to schedule an appointment with one of our trainers. Together, we can evaluate your training and progress!
Our trainers are here to help you restart with a challenging and motivating workout plan, so we can see you back in the gym every week!
Schedule Your Appointment Now!
Greetings, the team of (Insert Fitness company name)!
When we didn’t receive a reaction, another email was sent automatically after 6 weeks. When we didn’t receive a reaction again after two weeks, one of our trainers would call the member to find out what the problem was.
Usually about 10% of the people would react on the first mail, 10% would react on the second mail and about 13,5% was reached when we called them after 8 weeks. Of all the people who would reach out on the emails or book an appointment through the phone call, only 5% ended their subscription, 95% became active members again.
This gave us the following numbers.
100 people inactive minus 10 after first email
90 people inactive minus 9 after the second mail
81 people inactive minus 11 after the call
This gave us a total of 30 members that became active again, 70 people would leave eventually. But, this was way better than the 100 people who would left if we wouldn’t have done anything. .
3. Impact of flexible membership plans on customer retention rate
- Our monthly flexible memberships had a 50% annual churn rate—the highest of all membership types.
- Many members didn’t see results after just one month and canceled before we could provide long-term guidance and value.
- Worse, we invested time and money onboarding them, but they left before we could break even on their acquisition costs.
🔹 Solution: We redesigned our membership model to encourage long-term commitment:
- We removed the flexible contracts. From now on it was only possible to sign for a 12 month or 18 month membership. We would explain during our trial training that this is needed to see the growth you want. You can’t accomplish a lot in a couple of months, improving your health takes time!
4. No Exit Conversations When Members Left
- When members canceled, they simply emailed our general info inbox, and we processed their request without asking why.
- This meant we lost valuable feedback on whether they were:
- Unmotivated?
- Unhappy with our services?
- Lacking support?
🔹 Solution: We implemented mandatory exit interviews (either online or in person) to gather insights and make necessary improvements.Even though these conversations weren’t a lot of fun for the trainers, because the conversion was low. Still, 8% of our members who would have cancelled their subscriptions decided to stay and become active members of our gym again!
How Many Members Did We Retain with Our Customer Retention Strategies?
By implementing our retention strategies, we successfully reduced membership cancellations and improved overall retention rates. Here’s how the numbers played out:
- Inactive Member Re-engagement: 30% of members who had stopped visiting the gym and were at risk of canceling reactivated their memberships after our follow-up process.
- Exit Interviews & Cancellations: 8% of members who initially intended to cancel decided to stay after an exit interview.
- Other retention efforts: While we couldn’t quantify the exact impact of every strategy, improvements in engagement and structured follow-ups contributed to overall retention.
The Impact on Our Churn Rate
In 2023 we lost approximately 300 member in that year, based on 1.000 members in total, that was a churn rate of 30%
In 2024 we lost 220 members in that year, we started with 1.048 members, that was a churn rate of 21%,. That was well below our first target of 25% but just shy of our target of under 20% but we ended the year with 1.200 members. Our goal for 2025 is to get the churn rate below 20%, I will update you if I have the details!
This improvement not only stabilized our gym’s revenue but also significantly reduced the need for aggressive new member acquisition, making our business more sustainable and profitable.
How to Calculate Your Gym’s Churn Rate:
To calculate churn rate, divide the number of members who canceled during a specific period by the total number of members at the start of that period. Multiply the result by 100 to get the percentage. For example, if a gym had 1,000 members at the start of the year and lost 200 members, the annual churn rate would be (200 ÷ 1,000) × 100 = 20%.
So in the end, what did our churn rate improvements cost?
CTA,
Do you want to improve client retention in your fitness center or want to know how to reduce gym membership cancellations? Please let me know in the comments, maybe I can help you!
