Planet Fitness’s “Friendly Goodbye”

Summary

• When running a business with 10,000 members, like a brick-and-mortar gym, you might need your local market to only be around 50,000 people. This shows that you can still thrive in small markets with a good strategy.
• Maintaining a low churn rate is crucial. For example, having just a 5% monthly churn rate can keep your business stable compared to higher turnover rates.
• It's important to handle membership cancellations with a friendly approach. Instead of making it difficult to leave, make the exit process easy and welcoming. This can lead to members returning because they feel a positive connection.
• When a member decides to cancel, be polite and open to them returning. For instance, saying, “Let us know when you want to come back” can make them more likely to rejoin in the future when their circumstances change.

Video

How To Take Action

I would suggest implementing the "friendly goodbye" strategy if you're running a business, especially if it's member-based like a gym. When someone decides to cancel their membership, make the process as smooth and kind as possible. You can simply say, "No problem, let us know when you want to come back." This approach can create a warm connection, making them more likely to return later.

A good way of handling retention is by maintaining a low churn rate. Aim for around a 5% monthly churn rate as a benchmark. This can keep your business stable and ensure continuous growth. To achieve this, focus on the member experience and consistently deliver value to keep them engaged.

If you're targeting a small local market, don't be discouraged. Even in a town of just 50,000 people, you can successfully gather 10,000 members with a well-thought-out strategy. Focus on understanding your community and continually refining your offerings to meet their needs.

Utilize your existing memberships. When a person moves away or cancels, they might come back. Stay friendly and open, showing genuine care for their situation. This relationship-building can pay off in the long run with loyal returning customers.

By implementing these strategies, you can create a thriving business environment where customers feel valued and are more likely to stay or return.