In countless scientific studies, properly onboarding new members in the first month of membership has proven to be the king of the hill of member retention strategies. But how well do those studies translate to the real world? Can an onboarding program work in a large association of Ys or fitness centers? If so, how much real impact will it have?
In order to answer those questions, we recently completed a study of a large Y association in the Southern United States. The association recently enacted a robust onboarding program as a way to combat increasing member churn and declining membership revenue. We examined a number of metrics both before and after this change. The results were dramatic…
(To hear this association’s Vice President for Membership Development explain the changes they made and the results they saw, click here).
The Y we studied had enjoyed many years of steady membership growth over the last two decades. But, that growth began to taper off in 2013 and 2014. In 2015, the downward momentum continued and they experienced their first year of negative membership growth.
This development made it clear to the association leadership that it was time to take action. They hired a research firm to study their area and help them explore avenues for increasing membership sales. The study showed that they already had market penetration that was double the national average. Thus, selling their way out of the problem was not a viable option.
These findings drove them to conclude that it was time to seriously address member retention. After studying the research, they decided the way to achieve this goal was through a dynamic onboarding process.
The Change: Onboarding Implementation and Design
Once they came to the conclusion that retention would be a priority the association leadership contacted MobileFiT. We helped by running an analysis to understand their true new member retention rate. This gave visibility to where in the membership lifecycle members were dropping out.
The next step was to analyze their current member intake process and then custom design a new one based on research and industry best-practices. The final result was a five-step sales process called Y Greet and a wellness onboarding program called UFit.
After the necessary staff training and process alignment, the UFit program was launched. Membership staff made it a priority with all new members.
Since the program has now been in place for almost two years, we have ample data to analyze its effectiveness. We examined how UFiT had impacted membership from a number of different angles. Below is a summary of those results.
Onboarding’s Impact on New Member Retention
Our first objective was to discover the impact of the onboarding program on new member retention. In order to do so, we examined all the members that had joined since the inception of the onboarding program.
Of those new members, 6,965 enrolled in the onboarding program. Some of these members only completed one or two of the onboarding appointments rather than all three. To make our data as precise as possible, we compared the members who were not onboarded to those who had completed one, two, or all three UFit appointments. The membership survival graph below shows the results.
The results make clear three very important facts:
- First, and most importantly, onboarding had a dramatic effect on member retention. Almost a third (31.7%) of the non-onboarded members had terminated their membership within six months of joining. By comparison, only 10.6% of the members who had completed the program terminated in that same time frame. After 1 year, 49.6% of the non-onboarded members had terminated, versus only 24.8% of the onboarded members. At the 22-month limit of the study, only 32.26% of the non-onboarded members remained, while a whopping 55.71% of those onboarded were still members!
- One of the more important findings of the study was that there is a clear “dose-effect” to onboarding. In the real world, not everyone enrolled in an onboarding program completes all three appointments. Therefore, it is significant to note that even members who only completed one appointment had a significantly higher retention rate that those who did not. Moreover, the members who completed two appointments stayed longer than those that had only completed one. Finally, those that graduated all three appointments outperformed, by a wide margin, members in all the other categories.
- Finally, we learned that onboarding a member in the first month has a lasting impact. If onboarding only had a short-term effect, the curves would separate at the start and then move back together as time moved forward. But as the months pass, the curves don’t converge. They continue to move further apart! This is a strong indicator that the onboarding program has helped members be successful in reaching their goals. Since they are achieving the very things that drove them to join in the first place, they stay longer.
Onboarding’s Effect on Overall Member Retention
The results above show only the effect of the onboarding program on new members. But how much of an impact did the program have on the associations overall retention? We chose to answer this question by running a 13-month retention rollover, a common industry metric for measuring retention. For the calendar year of 2015, the overall member retention rate was 68%. The first full year of the onboarding program was 2016. The 13-month overall member retention rate for that year jumped to 72%. The association realized a one year gain of over 4% in the overall member retention rate. It must be noted that the longer the onboarding program is in place, the greater its effect will be on the overall membership rates. This is due to the fact that a higher percentage of the total membership will have been through the program.
Onboarding’s Effect on Membership Lifetime Value
Let’s look at retention from another angle. If you are an executive at a Y or fitness center, one of the metrics you need to be concerned about is the median membership life. Simply put, this is the length of time that 50% of your members stay before terminating their membership. Once you know this number you can calculate the total membership revenue you should expect from new members. For example, let’s say the median membership life at your facility is 9.8 months and you charge $50/month for membership. You can expect an average of $490 (9.8 x $50) in membership revenue for every new member that joins.
Now, let’s take that idea and plug it in to our findings from this study. The median membership life was 12.0 for non-onboarded members in our study. The average monthly price per member in this association is $40/month. Therefore, the lifetime value of a non-onboarded member is $480 (see chart below).
We have already seen that if a new member goes to just a single onboarding appointment, they stay longer. In this case, the median membership life for the members who went to one onboarding session rose to 16.1 months. This is an average of a 4.1 month increase in their length of stay! As a result, the lifetime value of these members jumped from $480 to $644! In a similar manner, the new members who went to two appointments had a lifetime value of $800.
The termination percentage of members who completed all three appointments had not reached 50% by the end of the study. Therefore, a median membership life could not be calculated. It had to be at least 22 months (the length of the study) and was projected to be over 24 months. The startling result is that moving a member through the entire onboarding program more than doubles their lifetime value!
Onboarding’s Effect on Membership Revenue
The bottom line for this study was to determine impact the onboarding program had on the membership revenue of the association. The association membership revenue in 2015 was almost exactly $18 million. In 2016, the membership revenue grew to $18.7 million. In total, there was a $673K increase in membership revenue after just a single year of the onboarding program. This equates to a 4% revenue increase. This figure does not include additional program revenue, personal training, or any other additional revenue generated by the member’s longer stay. And as we have already noted, the longer the onboarding program is in place, the greater the revenue increase will be.
The results seen by this YMCA association prove that member retention can be successfully addressed. An onboarding program, backed by leadership and implemented by a well-trained staff impacts not only retention, but also revenue as well. In addition, a major implication is that the program results in more members reaching their goals, staying at the facility, and living healthier lifestyles.
To find out more about how MobileFiT can help you analyze your new member processes, design an onboarding program, or train your staff, please visit our website: engage.mobilefit.com. Or, contact Kelly Kidd at (205)529-4616 or firstname.lastname@example.org.