As the cost of living continues to rise, the fitness industry is one of many sectors beginning to feel the pressure with a growing number of consumers reassessing their finances and having to make some difficult decisions around their discretionary spending.
In fact, research from MetLife UK, published in April 2022, revealed that 8 million people would be prepared to unsubscribe from gym memberships to make cutbacks to pay for essentials. This is 80 per cent of the estimated 10 million UK gym memberships, which would have a disastrous impact on the industry. Whilst it won’t come to that, many gyms will almost certainly experience a big drop in membership numbers over the coming months.
For gyms seeking to retain their existing customers while also attracting new ones, there are a number of steps that can be taken. From offering greater flexibility around payment plans and subscription models, to running deals and special offers.
Challenges facing the fitness industry
The COVID-19 pandemic and the various national lockdowns placed immense pressure on gyms and leisure centres across the UK, with the Daily Business Group revealing that at least 500 gyms and leisure centres permanently closed during the pandemic.
Despite many gym owners hoping that 2022 would be the year to rebound, the ongoing cost of living crisis, rising utility bills and wage inflation continue to create challenges. Similarly, the home workout industry is thriving, with a number of regular gym-goers adapting to exercising at home while gyms were closed, leading some to question if their gym remains a worthwhile investment.
Streamlining subscriptions
Despite some gyms offering pay-as-you-go or day passes, the majority prefer members to sign-up on a longer-term basis. Not only does this provide a greater level of financial security, but it also helps with forward planning, future investment and may even push some to take the leap of faith and expand into new or larger premises.
However, without the right systems in place to manage these on-going subscriptions and regular payments, staff may find themselves spending hours on administrative tasks – time that could be much better spent on growing the business.
Implementing digital payment software in your gym streamlines the entire payments process. With the invoicing and record keeping process automated, the chance of human error or duplication is also significantly reduced.
Armed with real-time information and metrics, finance teams can easily run reports on financial performance and track this over time.
Should they notice a drop off in revenue, they can immediately engage with the sales and marketing team to discuss the option of potentially running a special deal or offer to attract new customers. For those reliant on paper-based or legacy systems, obtaining this level of insight and adapting quickly becomes virtually impossible.
Offering more flexibility
A robust and reliable digital payments system will also allow gym users greater flexibility around the frequency of their payments. With budgets squeezed, large outgoings are understandably unappealing and splitting payments out into more frequent, yet small amounts may help retain some valued customers.
Whether they choose weekly, bi-weekly, monthly or even quarterly payments, it’s essential that the system in place can automatically keep track of these payments, as well as automatically flag any issues. For example, should a customer miss a payment or a payment fails, this needs to be flagged and followed-up immediately, to prevent late payments from negatively impacting cash flow.
Similarly, as a person approaches the end of their membership, having a system in place that can automatically prompt the sales team to engage with that individual will improve customer retention rates. When the time comes, long standing customers may be offered a new membership deal or potentially want to discuss a different payment plan for the following year. Via a digital payments system, this process can be seamless, as much of the legwork is done automatically.
At a time when consumers are having to reassess their spending, businesses need to be doing everything that they can to set themselves apart from the competition and offer flexibility when it comes to payments.
For more information, please visit: https://www.accesspaysuite.com/late-payments/
Author: Dave Carr, transformation director at Access PaySuite.
