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In the dynamic landscape of subscription services, an intriguing parallel emerges between gyms and streaming giants like Netflix. How do you ask? Well, this blog offers a perspective for gym owners and operators that underscores a crucial opportunity: the power of data-driven customer engagement, a strategy where Netflix excels and many gyms lag behind, leading to significantly different outcomes in customer retention.
The Subscription Model – Uniting Gyms and Netflix:
The foundation of both gyms and Netflix is a subscription-based model. It's a promise of ongoing value in exchange for customer loyalty. To succeed, subscription models must cater to individual expectations, needs, and wants. However, when it comes to this, gyms and Netflix have different approaches and vastly different performance outcomes, which we’ll explore further below.
The Struggle with Member Data in Gyms:
Despite their potential, gyms often miss the mark in effectively putting to use their member data. The International Health, Racquet & Sportsclub Association (IHRSA) highlights that most gyms primarily track basic check-in data, offering little insight into the individual member’s preferences or fitness journey.
This gap results in a generic experience for members, contributing to the industry's high churn rates, which, based on IHRSA research, hover between 30%-50%.
Netflix’s Triumph Through Data:
Netflix, on the other hand, is a testament to the power of data. It meticulously tracks and analyses viewer habits, preferences, and engagement metrics. This rich data allows Netflix to provide highly personalised content, ensuring that each subscriber finds value in their subscription.
As a result, Netflix maintains an impressively low churn rate of about 4%-6%, as reported by Statista.
Churn Rates – A Critical Comparison:
The differing churn rates between gyms and Netflix paint a stark picture. The statistics mentioned above reflect how personalisation – or the lack of it – directly impacts customer retention. Gyms, with their limited use of data, struggle to maintain relevance to their members’ evolving needs, leading to high dropout rates.
Actionable Insights for Gyms:
To bridge this gap, gyms must embrace a more nuanced approach to data. Collecting detailed member data on workout preferences, progression, and feedback can transform the gym experience into a personalised fitness journey. Leveraging platform tools to analyse and act on data makes it possible to create personalised workouts, offer personalised support, provide proactive guidance, offer goal-oriented challenges, and build a community where members feel they belong. Such initiatives not only increase member satisfaction and foster loyalty but are also what members expect and are essential in reducing churn rates.
This comparison between gyms and Netflix is a wake-up call for gym owners and operators. It underscores the untapped potential of leveraging data to deepen customer relationships and enhance retention. By adopting a more data-driven, personalised approach, gyms can reduce their churn rates and redefine the fitness experience, mirroring the success seen in the world of digital streaming.
Gym owners and operators face a critical stage as the fitness industry adopts new technologies like wearables, connected fitness, and AI. If not addressed properly, these technologies can minimise their ability to connect and engage with their members. However, operators can thrive and succeed in this new era by utilising tools to access essential data sources. By following the lessons in Netflix's playbook, gym owners can transform the traditional gym experience into a more personalised and engaging fitness journey. This can lead to enhanced customer loyalty and business success, all through a retention-led growth model.
To learn more about this topic and how FitFlo empowers operators and trainers to unlock their potential through data and engagement tools, reach out to us here.
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