Why Involuntary Attrition Is Killing Your Member Retention

"Why Involuntary Attrition Is Killing Your Member Retention." Woman training with ropes at gym.

When you’re losing the battle for member retention, it’s impossible to ignore. Complaints, poor attendance, and painful cancellations show a clear problem. But what about when content members disappear without notice?

While on the surface it seems like your member retention is rock solid, a silent killer may be lurking. Due to failed, expired, or delinquent credit cards, you may lose members without knowing to a phenomenon called involuntary attrition.

In this article, we’ll take a closer look at involuntary attrition, its impact on your business, and how you can prevent these needless cancellations.

What is involuntary attrition?

Involuntary attrition occurs when memberships are automatically cancelled due to failed payments. On average, 15% of recurring credit card payments decline. Some industries experience more than a 30% decline rate. When these payments fail, they are rarely retried. The delinquency goes unnoticed and ultimately results in a lost customer.

Mobile Payment Swiping Credit Card

Causes of involuntary attrition

To fight involuntary attrition, you must understand and address each of its underlying causes.

Credit card expiration

Credit cards expire about every three years. That means that about one-third of your members will need updated payment information every year. If you don’t have a system for keeping credit card data up-to-date, you risk losing a significant amount of revenue and members.

Credit card declines

Credit cards can decline for over 130 reasons. The most common reasons for credit card decline include credit limits, suspected fraud, late payments, and deactivation. Even when consumers are notified of declines, they may not remember to update their payment information with your business. Relying on members alone to troubleshoot declines will result in missed payments and unwanted cancellations.

Delinquency

While most membership management software platforms offer robust and reliable recurring billing, many still lack the features to handle delinquent accounts properly. Most software will not automatically retry a payment after it is declined. Likewise, automatic payment reminders via email and text message can help to prevent missed payments—but they do little to correct the situation once an account is delinquent.

If ignored, delinquent accounts can turn into lost members. Software helps streamline membership payments. However, solving delinquency requires you to employ staff to review accounts and work with customers to resolve issues.

How involuntary member cancellations impact your business

Although other business challenges often overshadow involuntary attrition, it can do significant damage to your finances and member relationships.

Lost revenue

The most obvious result of involuntary attrition is lost revenue. With each needless cancellation, you lose money not only in the current month but every subsequent month that the member would have stayed.

Losing money in the first month stings, but losing money every month afterward crushes your bottom line. This long-term multiplier effect means you must replace the lost member with a new one if you want to make up for the missing income. This puts additional strain on your business because it requires more time and resources to obtain a new member than keep an existing one.

Damaged relationships

Generally, cancellations come from your least engaged and lowest-quality members. Involuntary attrition, on the other hand, can impact any member. For example, a member who attends regularly may come back from vacation to find that his or her membership was cancelled due to an expired credit card. In some cases, this member is locked out of the facility and unable to access their workout history and progress.

Of course, involuntary attrition may not be permanent. Your best members are more likely to notice the error and return to your facility. However, the experience is unpleasant and may damage your relationships. As a business owner, it’s your responsibility to safeguard your relationships with members—especially your financial interactions with them.

A shrinking community

In some industries, involuntary attrition accounts for 20-40% of total attrition. This means that one out of every five cancellations is unnecessary and avoidable.

The loss of members has a compounding effect on your business. The smaller your community becomes, the less likely you are to benefit from word-of-mouth marketing and referrals.

Limited growth

If you’re constantly fighting attrition, it’s difficult to grow your net profit. The combined challenges of lost revenue, damaged relationships, and a shrinking community will limit your potential for growth in the short and long term.

Credit Card and Mobile Phone in hand

How to stop involuntary attrition

Despite its devastating impact, involuntary attrition is relatively easy to fix. Because these members (generally) want to stay a part of your community, you don’t have to change your service, facility, or staff.

To end involuntary cancellations, you need to make the billing process seamless and keep members’ payment methods up-to-date. Below are some of the strategies that we include in our managed billing service to reduce involuntary cancellations:

1) Update credit card information

Keep payment information current to avoid losing members to expired cards. Our team follows up immediately to get updated credit card information and to collect outstanding payments.

2) Communicate with members about missed payments

Catching overdue payments before they lead to involuntary attrition requires speed, skill, and determination. You need to follow up immediately, give customers multiple chances to resolve the issue, and phrase your request in the right way to make members act. At Member Solutions, we handle the scripts as well as reach out to your customers to resolve payment issues quickly and effectively.

3) Offer convenient payment methods

Often, members will proactively manage payments if given the opportunity. Our system allows members to make a payment or update payment methods 24/7 through an online payment portal or by phone.

4) Provide customer service for members’ billing needs

Your members’ needs are not limited to learning good fitness habits and training techniques. Maintaining a healthy financial relationship with members requires effort, too.

The customer service team at Member Solutions is trained to respond to the unique financial needs of your members. They practice responding to members’ concerns about contracts, personal financial challenges, and data security. The additional support strengthens relationships and makes members less likely to be lost to involuntary attrition.

5) Track overdue payments closely

Stay ahead of involuntary attrition by constantly tracking a list of delinquent accounts and past-due invoices. To make things easy, we track missing payments for you. All you need to do is check reports on collected payments, accounts receivable, and active members periodically.

Winning the war for member retention

Member retention is the key to your increased profitability and long-term growth. You can stop needless cancellation and build a strong community by learning to recognize the causes and signs of involuntary attrition. Through a payment recovery system and superior customer service, you can boost revenue and provide a better member experience.

Want to eliminate the threat of involuntary attrition? Get a demo of our managed billing services.

10 Ways To Increase Gym Revenue Without Selling More Memberships

Closeup over shoulder of woman looking at financial report of gym revenue on tablet device

Most gym owners drive business growth in two ways: by finding new members and by keeping the members they already have. While marketing and retention are great for growing your community, they represent only a fraction of the ways to increase gym revenue. By shifting your focus to maximizing every available revenue stream, you can uncover ways to improve your earnings overnight.

Consider how your pricing, service offerings, and operations impact your bottom line. Imagine being able to capture every payment reliably; selling memberships at a fair price that reflects the value of your services; and members who are engaged and enthusiastic about your brand.

In this ideal scenario, your business captures the maximum amount of revenue from every member. You can relax while your gym rakes in profits from multiple revenue streams. No more struggling to attract more and more new members each month with expensive and complicated marketing campaigns.

Realize the full potential of your business by using these 10 methods to increase gym revenue:

1. Reduce payment declines

According to publications released by major credit card issuers, 15% of recurring credit card payments decline. For some industries, the decline rate can reach as high as 30%.

To put this in perspective, if you have 100 members paying $50/month, you’d expect to receive $5,000 in monthly recurring revenue. However, credit card declines will cost you $750 to $1,500 per month. That’s $9,000 to $18,000 in lost revenue each year.

Credit card declines can prevent loyal members from paying what they know you deserve. These payments weren’t lost to poor customer service, low-quality classes, or high prices. These losses are completely out of your control—that is, until you put a process in place to avoid payment declines.

Use a combination of technology and customer service processes to recover declined payments and add back revenue to your bottom line. Choose a software solution that offers payment reminders and automatic retries after failed payments. While you can hire staff to collect declined payments from your members, third-party companies offer the most cost-effective service solutions. Well-trained managed billing professionals can increase recurring revenue by up to 25% for a minimal fee.

2. Raise your prices

Are you charging what your services are worth? Many gym owners panic at the thought of raising prices because they immediately envision a mass exodus of even their most loyal members. In reality, a carefully calculated price increase will improve your gym’s financial health and profitability with little impact on member retention.

Consider the following scenario: Your gym has 100 members each paying $50/month. You plan to implement a modest 5% price increase of $2.50/month per member. Given the new price of $52.50/month, you expect to keep 95 of your existing members. Following the price increase, you’ll earn an extra $2,850 per year.

No clever marketing tricks or slick sales pitch required. Your simple price change has increased your revenue all on its own.

To keep member attrition to a minimum, communicate your new pricing appropriately. Give members plenty of notice. Explain why the change is necessary to continue the high-quality services that they value from you.

3. Use paid trials

Most gyms offers free trial memberships or guest passes to prospective members. These freebies pay off when they result in new members, but sometimes you end up spending money to support non-paying guests who never return.

Paid trials help to secure a return on your investment. Payees are more serious about keeping initial appointments. They’re more invested in learning about your gym, understanding your value, and building relationships with your staff.

Consider using a combination of free and paid trials in a way that makes sense for your business. For instance, you might offer a free trial of your basic gym access, but a paid trial for your premium classes or training sessions.

4. Offer premium memberships

Do you offer tiered membership options and pricing? If not, it’s time to start. Rather than forcing your members into a one-size-fits-all model, structure pricing options around their needs and preferences.

If you’ve tracked purchases and attendance in your membership management software, you can use reports to investigate spending patterns and identify popular services. For example, your members may fall into three categories:

Once you’ve categorized your members and set your pricing model, you can send targeted promotions to each group to entice them to upgrade their membership package.

5. Sell retail items

Do you know how often members get to the gym only to realize they’ve forgotten something that will prevent them from working out? Stock essentials like earbuds, water bottles, and socks in your retail store to make sure members can get what they need.

If you’ve built a loyal following, invest in branded merchandise. Use an online service to print your logo on t-shirts, hats, yoga mats, bags, and more. A beautiful, eye-catching design goes a long way, so if you’re not confident in your logo or layout, try an online graphic design service.

6. Book private training sessions and lessons

Almost all fitness businesses offer one-on-one sessions, and most of them wish they could book more of these money-making services. The trick to maximizing this revenue stream is a combination of staff training and communication with existing members.

Market your private sessions to members using low-cost, easy-to-use communication channels. Put signs throughout your facility, post on social media, and send emails with special offers. Your goal is for every member to know that you offer private sessions.

From there, leverage your staff’s relationships with members to close the deal. Teach instructors to observe members’ behaviors and to discuss goals with them. An instructor may notice a member who puts forth great effort and attends regularly, but her technique holds her back. With a bit of coaching the member could excel. In seizing this opportunity, you’ll help a member meet her fitness goals more quickly and open a new revenue stream for your business.

7. Childcare

If lots of parents visit your gym, you may want to consider adding childcare services at your facility. A busy mom or dad who doesn’t want to give up gym time will gladly pay extra to know their child is happy, safe, and nearby during a workout.

Before introducing childcare services, be sure to review the legal requirements for your staff, facility, and business. While these services can bring in a significant amount of additional revenue, you’ll need to plan carefully to make sure you’re able to provide high-quality care.

8. Host events and workshops

Members love workshops, boot camps, and fitness challenges because they help them stay motivated and reach goals more quickly. These paid events provide a lump sum that has an immediate positive impact on cash flow.

To make the most of this revenue stream, think strategically about the needs of your business and members. Review the calendar for times when an event could provide extra cash during a seasonal downturn. Add events to help members meet a common goal, like staying fit through the holiday season.

Need some fresh ideas? Browse this event list to get started.

9. Nutrition and health coaching

According to IHRSA’s senior research manager Melissa Rodrigues, 25% of fitness club revenue comes from ancillary services. Your members aren’t just looking for a place to work out. They’re looking for all kinds of services to help them stay healthy, fit, and confident.

Most members would be happy to pay extra for services to help them eat better, make healthy choices, and track their fitness progress. These services will make your bottom line happy as well. By adding health coaching or consulting, you can increase the amount of revenue generated by each member.

10. Sell advertising

Looking for an out-of-the-box way to increase gym revenue? Try selling advertising space in your facility or email newsletters to local businesses. If you’ve done a good job building your membership base, you’ll have a fitness-conscious audience that’s attractive to an array of advertisers. Create a list of local grocery stores, specialty shops, salons, spas, venues, and restaurants who might be interested in your new advertising opportunity.

Go beyond marketing and retention to increase gym revenue through alternative revenue streams, new services, and operational efficiencies. In doing so, you’ll allow members to strengthen their relationships with you, giving your gym its greatest potential for growth.

4 Steps to a Genuine Membership Sales Pitch

Two smiling colleagues practicing a genuine membership sales pitch

Does selling memberships make you feel greasy? It shouldn’t! Think of it this way: Your sales process is not only the key to more money for your martial arts school—it’s also the way to discover who needs your talents the most.

A good sales process is less of an outright pitch and more of a dialogue that helps your prospect envision success with you. The result is an opportunity to build trust, fellowship, and emotional investment.

Being good at selling memberships and running a business does not take away from your existing relationships at your martial arts school. Developing your sales skills protects your livelihood and adds value to the services that you provide.

4 Steps to Build Relationships in Your Membership Sales

1. Be the best at what you do.

You can’t make a case for yourself if you don’t have something valuable to offer in the first place. Get your school organized. Nurture the unique qualities of your classes and community. If you feel like you need more time to focus on developing your business, try automating admin tasks with your martial arts software or delegating office work like membership billing.

2. Talk about value, not price.

Price questions require that you follow a specific sales script that can make or break the sale. When you’re asked about prices, avoid answering with a number. Responding with a number forces you to justify your value before your prospect has experienced your services.

Many prospects ask about price because they don’t know what they want or what to ask about your martial arts school. Rather than discussing price, show the value of your services by talking about your prospect’s goals and past experiences.

A) Discover prospective members’ goals.

Always say that pricing will depend on the program your prospect chooses. If you give your prospect price when he or she asks, you create an objection that immediately puts you in a position to defend your services. Make the conversation option-oriented with questions like:

“Why did you call us?”

“What do you hope to get out of this program?”

“Are you a beginner, or have you trained before?”

Much like if you were a journalist, an interview-style conversation helps you get to know what the person actually wants. Particularly if the person has never tried martial arts before and doesn’t know what to expect. Focus on a dialogue that reveals goals first. Write down your prospect’s responses on paper so that he or she knows you’re attentive.

B) Discover past experiences.

Again, when you talk about the value of your school, differentiating factors are important. Now that you know what your prospect wants out of your program, you need to know what hasn’t worked in the past.

“How long have you been thinking about this goal? When did you begin to consider training to meet your goal?”

Asking this question upfront avoids the possibility of hearing I need to think about it later in the sales process. Tailor this question as appropriate for parents talking to you on the behalf of their children.

“What else have you tried to accomplish your goal, and why didn’t it work for you?”

Asking what your prospect has tried before gives you a better sense of his or her needs (e.g. support, beginner-friendly instruction, class structure). It also gives you the chance to empathize with his or her struggle and to talk about how your school addresses those pain points.

3. Overcome 4 common membership objections.

An objection is any roadblock to a prospective member saying yes to your school. Objections arise when you don’t know how to address them early in the conversation with your prospect. Taking the lead, however, confirms that your prospect won’t flake later.

When asking these questions, avoid accepting I think so as an answer. If you hear it, don’t proceed any further unless your prospect can confirm with 100 percent certainty. Your recipe for success: question, listen, and verify.

Objection 1: Location & Transportation

Confirm that your prospect is in the area and has transportation to get to class. Even if you’re talking to a parent, ask.

Objection 2: Schedule & Time

Propose days and times. If your prospect is unable to confirm, ask when works better in his or her schedule.

Objection 3: Motivation & Commitment

You’ll need to help your prospect envision what it would be like to achieve his or her goal with the help of your school. Lead with positive reinforcement first. Ask your prospect:

“What do you see happening when you achieve your goal? What is that going to do for you?”

Follow up with asking what makes them unhappy about his or her current situation. Again, write everything down.

Not only does vision help your prospect, but it also helps you know how to best support the person.

Objection 4: Family or Significant Other

Oftentimes, prospects will say he or she needs to consult a family member or a significant other before moving forward with your school. Ask in your own words, Is there anyone who isn’t supportive of your accomplishing this goal? Who is the first person you’re going to tell when you get home and are they 100% supportive of you?

4. Offer a trial membership

Trial memberships are a powerful sales and marketing tool for your martial arts school. It’s key to walk through the discovery process first with your prospect so that he/she understands your value and they feel empowered toward their goals. Afterward, give your prospect a chance to experience what your school through a free class, free week, or a paid trial with a free uniform.

7 Ways to Handle Late Member Payments

Mobile invoice for member payment on cell phone

Asking your students for money is never easy. When a member of your martial arts school doesn’t pay on time, it’s tempting to let the delinquency slide to avoid confrontation. But you run a business. You deserve to be paid for the valuable services you provide. Still, how can you ask for late payments without sounding cold or impersonal? These seven tips will help you navigate how to collect and prevent late member payments:

1. Automate member payments

Automating credit card and ACH payments through your member management system is an easy way to prevent late payments. Talk to your members about switching to one of these methods if you notice them struggling to pay on time. Be sure to highlight the added convenience of auto-payments and address any concerns about data security.

2. Set expectations with new students

Review key points of your membership contracts with new students and families. Make sure students or parents sign off on payment amounts, due dates, and the membership duration. Be honest and open about your expectations for on-time payments. Just like your members expect consistent, high-quality martial arts instruction from you, you will expect prompt, full payments from them.

3. Charge fees for late payments

If late payments are a chronic problem for your martial arts school, you might decide to add late fees to your contract. Some gyms and martial arts schools charge late fees of $5 to $25 per overdue payment. For some individuals, the extra incentive will motivate them to stay on top of payments.

Before deciding to use late fees at your school, consider how this will impact your relationships. Ask yourself how new members will react to hearing about late fees before they’re even a part of your community. In the end, you’ll have to determine the best balance to protect your business without harming your relationships.

4. Send email reminders

You probably already use your martial arts software to automatically remind your members about upcoming payments and due dates. Hopefully, these reminders help prevent late payments before they occur.

Once invoices become past-due, you can use another type of email reminder to collect late payments. Create a short series email scripts to ask for late payments. Be polite but direct. Make sure to clarify any consequences of late payments, including interest fees or deactivation of the membership.

5. Make a phone call

Because phone calls are more difficult to ignore than emails, they’re particularly effective for collecting late payments. Be friendly but firm on the phone. Clearly and calmly explain the details of the past-due invoice and ask for the payment in full. While on the phone, you may uncover new information about your member’s situation that reveals the true reason for late payment. Use these insights to find a long-term solution to help you and your member avoid future missed payments.

6. Be kind, not argumentative

Your students are only human. They make mistakes. They forget to update expired credit card information or to check their bank account before payments are due. There are hundreds of reasons students miss payments. Avoiding financial disputes is crucial to maintaining a strong, long-lasting relationship. Before jumping to conclusions, see if a friendly reminder is all that is needed.

In some cases, your student may be dealing with a difficult or complex situation that has impacted their finances. Use good judgement to come to an agreement that’s fair and mutually beneficial to you and your member. It may make sense to be flexible or forgiving in order to preserve your relationship and retain your member.

7. Call in an expert

Collecting late payments is complex and challenging. To truly be successful, you’ll need to dedicate resources to make sure someone is responsible for follow up and collections. If you handle this follow up in-house, make sure to incorporate this task into one of your job roles so it does not become an afterthought for one of your busy employees. You can also outsource payment collection to a team of managed billing professionals to bypass the awkward conversations and eliminate the complicated follow up process.

If you follow the steps above, you’ll see your overdue invoices decrease while your relationships with your students improve. In the long run, the combination of these two factors is what will keep your martial arts school financially stable and successful.

Have you tried these tips? How do you encourage students to pay on time? Tell us your thoughts below.

How to Avoid Financial Disputes with Your Gym Members

Member-owner relationships are a bit like marriages. You work hard to cultivate strong, long-lasting bonds. You do all you can to show you care and provide what your member needs. Despite that effort, you can still find yourself dealing with absences, arguments, and painful breakups caused by disagreements about money. Among married couples, financial disputes are the second leading cause of divorce. Likewise, uncomfortable conversations about missed payments can make members feel like your gym is not the right place for them. To avoid losing members, put a plan in place to prevent financial disputes and strengthen your relationships.

What can you do to avoid financial disputes with your members?

At Member Solutions, we have over 25 years of experience providing billing services and collecting member payments. Think of us as a financial counselor who wants to help alleviate some the strains money puts on your member relationships.

Follow these 5 tips to avoid financial disputes and keep your billing practices running smoothly:

1) Talk about your billing policies

Clear billing policies allow you and your members to stay on the same page. Put yourself in your members’ shoes. Would you enjoy surprise charges to your credit card? While surprises can be fun, financial surprises can damage your relationships.

Create a membership welcome packet that clearly details what your members can expect financially. Address the when and how of payment processing, late fees, cancellation policies, payments dates, and how members will be notified if fees change.

2) Be flexible when members have money problems

Eventually, one of your members will show up to your gym after months of racking up an unpaid balance and overdue fees. They’ll say they had no idea it was happening. They’ll ask you why you didn’t remind them and possibly tell you they can’t afford to pay.

While it’s important to enforce your policies, sometimes it’s important to find a middle ground. Ask yourself, “What’s best for my long term relationship with this member?”

Sometimes it’s in your best interest to give a member a break. You may decide to waive fees or set up a payment plan to get a member caught up. When you make an exception, let them know that you’re doing it because they are a valued, long-term member. Explain that your policies are in place because newer members—who don’t have strong relationships like yours—might try to avoid paying.

This method has a variety of benefits:

  1. You were likely going to receive no payment. Now that you have made an exception, you are likely to receive some compensation.
  2. You increase the odds that this member pays on time going forward.
  3. If this member is leaving, it’s more likely that he or she will return to your gym.
  4. The likelihood that member talks highly of your gym will increase.

Every gym owner is unique and has different opinions on this situation. All we recommend is that you consider the value of each customer on an individual basis.

3) Automate member payments and billing

Automated billing services virtually take you out of the dues collection process at your gym. All you have to do is set up client accounts, due dates, and payment amounts. Voilà! Your clients’ accounts will be billed automatically.

What does this mean for you? It means that you no longer have to directly collect member payments. This saves time on administrative tasks and reduces strain on relationships with your members.

4) Offer secure online payment processing

The convenience of online payments has obvious appeal for both businesses and members. However, when it comes to online payments, choosing a service with maximum security is critical. The last thing you want is for your or your members’ financial information to be compromised.

Choose a Level 1 PCI compliant provider to protect your business. Providers that follow these data security standards offer the highest level of protection against credit card fraud.

5) Enlist a professional team to bill your members

In addition to damaging relationships, tracking down member payments is confusing and time-consuming. Pursuing missing payments can take up to 10 hours every week. That’s time you could spend with your members, growing your business, or relaxing with friends and family.

Outsourcing to an affordable managed billing service that specializes in tracking down delinquent accounts can reduce stress and help preserve relationships. Billing professionals have an in-depth understanding of the payment processing business and are better able to troubleshoot issues with failed credit card payments or delinquency. In fact, members are more likely to settle monetary issues with a billing company than a gym owner.

If you decide to collaborate with a third-party billing provider, choose a team that will uphold your policies while still offering flexibility to your members. A good billing company will be able to advise you on when to make exceptions for members who are having trouble paying.

Overcome financial disputes to strengthen member relationships

Financial disputes are one of the main reasons relationships end—whether it’s between spouses, business partners, or band members who pursue disappointing solo careers. To beat the odds, you need to be proactive. Talk to your members about your expectations regarding payments. Be open to a financial partnership with your members. If you decide to partner with a billing company, choose a team with the same commitment to customer service and fairness that you do.

How do you manage the financial aspects of your member relationships? Share your comments below.

Webinar: Uncover the Hidden Profit Center Inside Gyms & Martial Arts Studios

Can you turn a profit on your billing expenses? Expert sales consultant and school owner Erik Charles Russell says yes.

Members love convenience. In this webcast, Erik Charles Russell shares how to create a new revenue stream by appealing to members’ desire for convenient billing options. Through this model, you can generate higher income from fewer members as you reduce administrative costs. What you’ll learn:

  • How to create a profit center from service and transaction fees
  • How to raise prices and retain current members
  • Why low prices do not lead to more members

Presented by Erik Charles Russell.

Erik Charles has been in the Martial Arts and Fitness industry for more than 25 years and is the owner of Premier Martial Arts and Fitness in Watertown, NY. In 2015, he published a book based on his successes called The Art of Selling Memberships. The book became an international best seller—hitting number one in three categories in the US, Australia, and Germany on Amazon.com.

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10 Ways to Reduce Your Delinquency Rate & Increase Cash Flow

Business charts and graphs
In the 26 years that Member Solutions has been in business, we’ve discovered that there are ways to alter member payment behaviors to ensure prompt and predictable cash flow to your facility. Here are 10 tips to reduce your delinquencies and facilitate collections with our managed billing services.

1. Avoid statement or coupon billing methods whenever possible.

Customers that pay by statement or coupon are 23% more likely to become delinquent than those who sign up for auto-pay. Enroll customers for bank draft or a credit card option. It’s a double win for you. Customers are more likely to pay on time and electronic payment options save you money.

2. Acquire e-mail addresses for every customer.

Email is one of the fastest ways to communicate with your customers. It has become an effective tool in delinquency management. When we send email reminders as part of our payment collections service, we provide a direct link to our customer-only website where your members can make payments and update their billing information.

3. Provide a contract copy promptly when requested.

Your agreement is legal proof of the customer’s obligation to pay. The quicker we receive the agreement, the better chance we have in recovering your funds.

4. Select due dates early in the month.

If a customer does miss a payment or has a declined or returned payment, Member Solutions has a better chance to recover your funds within the same billing cycle. We recommend setting the 1st or 5th of the month as the due date for all of your members.

5. Know who’s delinquent.

Our most successful clients know how and where to find this information online. Here are ways to stay informed:
  • Review the delinquency report at least twice per month.
  • Sign up for Email Alerts. We’ll email you and any staff member you designate whenever a customer has a returned or declined payment.
  • Examine the Activity Report on a weekly basis. Not only will it provide you with a list of new accounts and funding activity, it will also list any customers with an active follow up that is preventing or delaying billing.
Member Solutions Managed Billing Solution - Software on Monitor

6. Work together with Member Solutions.

The clients we see with the lowest delinquency percentages work with our team to make it easy for members to manage their accounts and make payments. Some clients prefer to be direct with their members, while others prefer a subtle approach. Either method will increase collection results, so long as you’ve communicated your preferences to our team.

Once you know who is past due, you can simply hand your customer a Member Solutions’ business card and say “Member Solutions has informed us that they have been unable to contact you. Here’s a card with their website and contact information.” Once a customer is aware that you may know that they have a billing issue, they are more likely to pay on time to avoid embarrassment.

7. Ask your customer to provide you with their most accurate billing information.

Have them provide it to you directly, rather than obtaining it from a driver’s license or previous billing account which may be outdated. Ask the customer to verify their vital billing information when they are signing the agreement.

8. Make sure that your customer knows that Member Solutions is servicing the billing portion of their agreement to avoid having payments charged back.

Your endorsement of Member Solutions provides your customers with a reassurance of your professionalism and commitment to quality service. Place the Member Solutions Decal in your business and hand out Contact Cards, both provided free of charge. Talk about our Customer Account Access Website, designed specifically for your customers to make payments, update their billing information, print payment history, or contact our Customer Service Team.

9. Offer settlements to members who have trouble paying.

The longer an account remains delinquent, the less likely you are to receive payment. When a customer is no longer attending class or using your facility, they are more likely to stop paying altogether. Once an account reaches 90 daysdelinquent, we recommend automatically offering the customer a settlement for a percentage of the remaining balance. This could bring you income in the form of a lump sum payment, and leave the customer on better terms which could result in new customer referrals or re-enrollment in the future.

10. Don’t accept payments at your business.

Generally, we discourage our clients from accepting payments at your place of business. Accepting payments creates more work for you and increases the likelihood that your customer will receive delinquency phone calls and correspondence when they are not past-due. Worse yet, it also increases the chance of double billing your customer when the payment is not reported immediately to Member Solutions. Finally, once you accept that first payment, chances are it will occur again and diminish our authority when the customer decides not to pay.

4 Ways to Build Solid Customer Relationships in Your Fitness Business

Personal trainer and client smiling while discussing workout scheduling at fitness center

Are you focusing as much energy on your current members as you are with your new ones?

Having engaged, happy customers not only helps make your business more successful, but it also makes your job worth going to every day. When you open your doors on day one, it’s pretty easy to remember the important details of your first clients’ lives; birthdays, family events, career successes. As with any relationship, these are the details that form strong bonds and create customers that will stay with you for a long time.

As your member base grows, it becomes increasingly more difficult to have enough time in the day for those meaningful conversations—it’s not that you don’t want to, but if you spent even just five minutes a day with 200 members, that wouldn’t leave you with time to do much else. It is, of course, still vital to engage your customers. As with so many parts of your business, having systems in place helps to ensure that your customers know how important they are to you should be a key part of your operations.

1) Technology

Most modern technology is geared towards one thing: convenience. In this case, let technology do the work for you. If you have only a few short moments with one of your members, would you rather spend that time collecting an overdue payment or asking them how their weekend was? Assuming you answered the latter, letting your members know that they can make payments online will help you to forego the often times awkward conversation you need to have about their tardy payment.

If you have an event or class for which they need to register, let them know that they can register from the convenience of their home. Don’t make them stand at your front desk signing forms and writing checks when you could be asking them about their goals or soliciting their feedback.

2) Go Above & Beyond

What may seem like a little thing to you may alter the entire scope of somebody else’s day. You never know how an email to one of your customers may brighten their mood. Because it would be nearly impossible to manually send an email to each and every current and former member you’ve ever known, have a system in place to do it for you.

At a minimum, make sure you’re collecting birthday information and setting an email to be automatically sent on the right day. Remember, every email you send doesn’t necessarily have to contain information about upcoming events or sales. Sometimes a simple “Happy Birthday!” will go a lot further for your business.

3) Connect on the Phone

Of course, not everything can be an email or text message. Speaking to your customers directly, even over the phone, can help cement the relationship you’ve built. If you’re worried you may be missing someone, set yourself a reminder. Assign an ongoing task for someone on your staff to do touch base calls. Most importantly, don’t wait until the member hasn’t been there for a while; engagement is proactive, not reactive.

4) Hold Member Appreciation Events

Everyone wants to grow their member base. Holding “Bring a Friend” events is an effective and often times lucrative way to hit that goal. Remember, though, you can’t grow your member base without doing your best to keep the current roster engaged and happy.

Holding member appreciation events can do just that. Host a free event in which your only expense is your time (a special group class) and only invite your current customers. Some may argue that the value gained from these events can even far exceed the cost of an event you pay for out-of-pocket, such as hiring a special speaker or trainer.

Before and after the event, give them the chance to mingle with each other. Take the opportunity to talk to them on a personal level. Cultivate a community within your business. If you host these events regularly, not only will your relationship with your customers improve but your customers’ relationships with each other will improve, too.

As always, Member Solutions is invested in your success. We offer a variety of tools that can help you systemize important aspects of your business so that you can focus on what you do best. If you’d like to learn more about how you can make the most of these tools, don’t hesitate to contact the Training and Support team at 877.600.3811 or support@membersolutions.com to schedule a training session today.

About the author: Justin Bodamer is the Product Support Manager for Member Solutions. The Training & Support team is dedicated to helping you and your team make the most of your software and services. You can contact him at membersolutions@membersolutions.com.

How to Respond to Membership Contract Complaints

membership contract signature with pen on paper

A written billing agreement―otherwise known as a membership contract—is a standard business document used by many membership-based businesses. Every day, martial arts schools, fitness clubs, yoga and Pilates studios, and MMA gyms establish agreements with their members. The membership business offers classes, lessons, equipment, and/or training in exchange for payment from the member. Through the membership contract, the member agrees to use services provided by the business and pay for them at an agreed price under certain terms and conditions.

Sounds clear-cut, right? Unfortunately, issues surrounding membership contracts arise, and those issues can be anything but clear-cut. Members often oppose the terms of the signed billing agreement, stating, “That is not what I was told when I joined.” Membership contract complaints turn into a ‘contract dispute’ and can then escalate to a formal consumer complaint filed with the Better Business Bureau (BBB) and/or the State Attorney General.

Formal complaints issued through the BBB and/or State Attorney General aren’t to be taken lightly. Here are 6 tips you should consider before responding to these complaints:

  1. Make sure you fully understand the membership contract complaint before you respond. Angry customers tend to throw everything they can into a formal complaint in order to prove their case. Before you formulate your response, find the customer’s proposed resolution. Once you know of the requested resolution, you can better address the complaint.
  2. Keep your personal feelings out of it. Your anger or disappointment has no place in a formal response letter. Many local BBBs post responses online for others to review. State the facts only.
  3. Back up your responses with documentation, e.g. a written billing agreement or cancellation form. Be sure to black out any bank account or credit card numbers if they are included in your documentation.
  4. Keep copies of the complaint and your responses. If the issue is not resolved with the first correspondence, you may receive a rebuttal complaint. Having a copy of the first letter helps in responding to the second letter.
  5. If you do not agree with the customer’s suggested resolution, offer an alternative. This displays your willingness to compromise and end the dispute on amicable terms.
  6. Whether the consumer complaint is filed with the BBB or the State Attorney General, it is very important to respond by the suggested deadline date. This is especially true of Attorney General complaints. The Attorney General has the power to investigate further and can prosecute if it finds wrong-doing. Your best bet with Attorney General disputes is to find a way to resolve them as quickly as possible.

As I’ve mentioned before, your ability to resolve the membership conflict complaints is an extremely important part of keeping your business successful and your business reputation protected. Often times it is best to find a resolution that works for both parties.

For additional guidance, read my post on how to properly handle member cancellations.

About the author: Margo Stauffer has extensive experience in managing customer service teams in several industries, including eight years in the health and fitness area serving franchisees throughout the world.