Metric 1 – Attrition

Many facilities calculate attrition as a baseline for success. Attrition is measured by taking the number of cancelled memberships at the close of each month and dividing this by the number of active memberships from the beginning of the month and multiplying by 100.

Attrition = (Cancelled Memberships / Month Starting Members) x 100

Typical rates here are 3-4% (If you have a 5% monthly attrition this means you are turning over more than half of your membership base in 12 months which is not good). Ideally, you want to be aiming for less than 3.5 as a baseline.

Metric 2 – Length of stay

Another commonly used indicator of retention is to calculate the average length of stay (LOS) for a member. Divide the total number of months your members stay by the total number of members to get the average number of months that a member stays.

Length of Stay = Total Months Stayed / Total Number of Members

Note – this number can be misleading because your long-term members skew the result as artificially higher.

The easiest way to calculate this is to get a spreadsheet with all your members and their membership start date. Create a column for the length of membership. (Ideally, your membership system has this metric already). Total the column in excel for months stayed to get a total and then divide that by your total membership base.

Metric 3 – Annual Retention Rate

Retention rate is the number of members you keep over a period of time. I.e. 12 months.

Steps to calculate annual retention rate:

1. Make a 12-month chart and record: Starting number of members for each month from Jan to Dec
2. Total the beginning number of monthly memberships (overall 12 months) and divide by 12 to calculate the average beginning monthly membership.
3. Total the number of cancelled memberships divided by the average beginning monthly membership to get your attrition.
4. Subtract from 100

E.g. – If your average beginning monthly membership was 1523 and you had 576 members cancel over 12 months

576/1523*100 = 37.82% annual attrition

100-37.82 = 62.18% annual retention rate

According to the International Health, Racquet and Sportsclub Association’s 2015 industry statistics, the average rate of member retention for IHRSA clubs was 72.4 percent.

The key to having accurate figures for member retention rates is collecting accurate data. Consider setting up a spreadsheet or google sheet to collect these key data points such as month-end membership and total cancellations for the month.

Set a reminder in your calendar for the 1st day of each month to record this data for the previous month. If you are a busy manager, schedule this as a task for one of your team members. We use a tool called Asana for scheduling team tasks which can be set up on a recurring basis which works great for helping team members stay organised with these sorts of tasks.

I personally suggest recording all 3 metrics as all 3 have their pros and cons. The monthly attrition helps keep your finger on the pulse each month and you can react or identify any cause if a poor month takes place.

You can also take this data further – For example, you may look at different membership segments or programs and the effect these have on the average length of stay. For example, you could compare members who receive support from trainer vs. those who go it alone and compare the average length of stay between those groups. You could compare the length of stay for members who have a single appointment with a trainer vs. member who have 3 or more appointments with trainers. This more in-depth analysis can help you identify drivers of retention. Once you understand what leads to improvements in member retention you can then structure your programs and process to try and maximise these drivers.