Take a week away from chasing new leads and put all of your eggs in the client retention basket to see huge results.
Let me tell you a quick story...
In the fall of 2014 Eric Cressey transitioned away from CSP Massachusetts to coach in a full time format at our Florida facility for the duration of the winter. This was worrisome for us up here in the northeast because October through March happens to be our busiest time of year. One of the areas where we anticipated losing business was in the one-time consultation (OTC) category. During the calendar year leading up to this point, OTCs accounted for 17% of our revenues.
The way we saw it, if someone was going to reach out to us in search of a short-term visit of this nature, and the service would be available in both our Massachusetts and Florida locations, the combination of warm weather and the opportunity to be assessed by Eric Cressey would be enough to draw a great deal of these leads south.
We were correct. OTC numbers dropped by more than 90% during that six-month span here in Hudson, MA.
So, after losing 90% of the leads that once accounted for 17% of our gross revenue figures, you'd imagine that we were in trouble, right? You would be wrong. The first six months that Eric was gone ended up being the most profitable six-month period in the history of CSP.
What?!?!
Here's what happened...
The first thing you need to know is that here at CSP, there is no type of client that is higher-maintenance than one who is visiting for a one-time consultation. When you bring a brand new client in for a 24 to 72-hour window of time, they are inevitably going to call for a great deal of one-on-one attention. While this isn't ideal in a semi-private training facility such as ours, we are ok with it because the price point we have in place for this service model reflects the increased coaching resources consumed. Additionally, the lifetime value of this type of client can be huge if we effectively monetize him in a distance-based program design format moving forward.
We could have lost sleep over the fact that these OTC leads were all but gone, but it didn't take long for us to realize that their disappearance meant that we'd freed up a great deal of coaching moving forward. Scheduling less coaching-intensive supervision scenarios meant that we suddenly had an additional staff member available to float on the training floor and focus purely on client interaction. We suddenly had an opportunity to over-deliver more frequently with our semi-private training clients.
Casual conversations about food consumption habits led to more scheduled nutrition consultations. Once-a-week clients who fell in love with the coaching interaction began increasing their training frequencies to a second, and sometimes third day each week. Client referrals began to increase ever so slightly.
The concerns surrounding a 90% decrease in scheduled OTC's soon got lost in the realization that existing clients were sticking around more, and spending more dollars with us. We were learning on the fly that you are dramatically more likely to increase the spending habits of an existing client than you are to recruit and convert a new one.
Here at CSP Massachusetts, we saw a 26.2% increase in revenues during October through March of 2014/15 compared to the corresponding period the year before. While some of these additional dollars were a reflection of consistent and anticipated growth, it is evident that improvements in client retention and increased word-of-mouth referrals were allowing us to survive and thrive in the wake of disappearing potential OTC clients.
Statistics from www.RetentionScience.com
You don't need to wait for 17% of your revenues disappear before getting started
The takeaway here isn't that we needed to decrease our OTC work-load moving forward; this segment continues to be immensely profitable. Instead, we chose to add an additional full-time staff member and slightly increase the size of our internship program. This ensured that we could return to accommodating the short-term clients that would inevitably return when Eric made his way back to Massachusetts in the spring without losing focus on delivering quality client interaction during our training sessions.
I encourage you to take the next week off from fine-tuning your 2017 marketing calendar and put some thought into how you can improve the training experience for your existing clients. Stop worrying about generating your next 5 leads, and start thinking about how you can ensure that you lose one less client during the coming month. You'll be pleasantly surprised to see how much improving retention will positively impact your bottom line.
Do you enjoy my fitness spin on business concepts?
I publish my “Friday Four” newsletter at the end of each week featuring links to useful articles and insights on applying concepts from each to your own fitness business endeavors. Check it out HERE!