6 reasons why your Health Club should be using reccurring payments

In running a Health Club, you have been blessed with the opportunity to offer a service that customers want to buy repeatedly on a month by month basis – don’t waste it. 

In the UK, most of the larger gym chains are already operating on a recurring payment basis, but there are some clubs, particularly boutique gyms and independents who are still supporting other membership types such as monthly and annual cash payments. 

In this post, I will highlight the reasons why all Health Clubs should be selling monthly recurring memberships in an automatic fashion. 

1. Best for both parties.

The reason recurring billing is now the most sought-after way for Health Clubs to operate in the UK is that it is mutually beneficial for them and their members.

For the member, it provides a simple, frictionless experience – they are only required to set up their payment details once and they can then enjoy all the experiences that follow without being tied into any contracts (unless stated). One month down the line, they don’t need to actively go through the effort of making a payment, this makes life easy for the member and thus encourages further spending which is ideal for you as an Operator. 

Recurring payments also offer your members more flexibility. Most recurring billing systems allow members to change their payment details, to add bolt-ons to their subscriptions, and to freeze or cancel their membership – by allowing your members to take such actions on their account, they always feel in control. 

As an Operator, you gain benefit from improved retention and steadier cash flow. Both of these upshots will enable your finance team to forecast future revenues with greater accuracy, which means Chief Executive Officers, Marketing Directors and other key stakeholders within your organisation can make more informed, smarter business decisions.

Recurring payments will provide your business with a steadier income, meaning you can use Machine Learning AI to predict your Health Clubs future revenues and profits.

2. Decreases late payment issues

Alongside reducing the administrative costs associated with manual payments, recurring billing also decreases the likelihood of a member making a late payment. 

Traditionally, when operators collected cash payments, members would often either forget to make their payment on the day it was due, or they would simply be unable to do so due to other commitments. As a result, they may have faced a penalty charge.

With recurring billing through a one-off card payment, the member does not have to even be present in your facility to renew their membership each month which makes for a far less stressful experience, and as such monthly dues are paid automatically, it’s far less likely a member will miss a payment. 

As a Health Club Operator, members paying you on time is not only advantageous for your cash flow, but it also saves you time, effort and energy from having to chase down those late payments. This means that you can concentrate on tasks that can actually improve your business. I will go into more detail about this in my next point…

3. Improved reputation.

Your Health Club should not want to garner a reputation as a ‘debt-chasing’ company, as frankly speaking it is not a pleasant image and takes the shine away from the actual service you offer.

If a potential member looked at all your reviews online today, what would they see? If all your Unique Selling Points are overshadowed by complaints pertaining to your shoddy member payment experience, then that is likely to be very off-putting for a prospect in the initial stages of their buying cycle. A poor payment experience leads to negative word of mouth and as that spreads, it will eventually eat into your sales figures. 

Through recurring billing, you can limit the amount of negative sentiment by tidying up your payment making process, but that’s not the only way offering recurring payments will improve your reputation…

When a prospect views your monthly subscription packages either online or in the gym through a self-service kiosk, they feel empowered to make a choice based on their budget and personal needs. As long as your terms and conditions are clearly stated within each package, this joining process gives the customer a feeling of ultimate control and generates a positive sentiment towards your Health Club from the get-go. When faced with options, members are more likely to choose recurring payment methods because it saves them money and is more convenient.

 

 

The use of self service kiosks give customers a feeling of control. This combined with a recurring payment option make a member feel at ease when they join. It is also environmentally friendly!

4. It’s environmentally friendly.

One further advantage of taking on recurring payments is that it is eco-friendly. With this method, all payments are made by members online or through a self-service kiosk, meaning there is no need for any paper. As you go paperless, you’re contributing to making the world a better place.

Although this may seem trivial, as I stated in another post, research shows that 80% of Millennials favour brands who have a social purpose and this cohort are immensely passionate about causes which protect the environment. It may, therefore, be worth highlighting to this age-group just how the adoption of recurring payment methods is helping you to significantly reduce your companies’ carbon footprint. 

5. Keeps payment information secure.

As well as protecting the environment, the use of recurring billing payments should also help you to protect your customer’s sensitive information in a more secure and reliable manner. 

When choosing a recurring payment service provider, just make sure you look for a well-renowned expert in payment security measures like eFitness.

If you select the right provider, then you can be sure that your members who make payments electronically on a recurring basis will not be susceptible to fraud. In fact, by going cashless, you will be minimizing the risk and reducing the potential damage that may have otherwise occurred through human error in the process of collecting cash manually – another reason why you should go for recurring payments!

6. The more data, the better.

Without data, you are just another person with an opinion.

It is really useful for Health Clubs to collect data relating to each members tenure and the number of months each member has remaining on their contractual agreement. It is equally valuable for Operators to be able to view is the number of payments each member has made. 

By having such information, you can cross-reference this against other key areas of interest such as visitor-behaviour, geo-location, app-engagement, secondary-spend purchase behaviour and cancellation data to help you predict the future success of your business and act accordingly.

To use an example, if your data shows that a noteworthy proportion of your members reduce their number of visits in the fourth month of their tenure, you can predict likely active membership rate, usage and capacity for the future with a view to improving it. To make such improvements, you may need to refine month 3/4 in your member journey to keep your future members active.

 

 

 

As an alternative example, if your data reveals that those who live more than 4 miles away from your club are significantly less likely to commit to their membership for more than 3 months, then you can gauge which members may be at risk of leaving in the next quarter based on their post-code, and you can, therefore, predict the future profitability of your club based on your members geo-location among other possible factors. 

There is an endless amount of data you can collect simply by offering recurring payments, this insight can help to dramatically enhance the performance of your Health Club from both an acquisition and member journey perspective. 

Microsoft Azure Machine Learning will help your day-to-day operation results by forecasting sales figures, attrition and retention, and can even recommend products to your clients.

Wrapping up on recurring…

This post has outlined some of the advantages for Health Clubs in offering such payment methods. In a nutshell, memberships paid with recurring card payments lasts on average 2x longer than those paid in cash. If you haven’t got a recurring billing system in place already, then you’re leaving money on the table.

As an avid gym member myself, I would always want to set-up an automatic payment so I can fully appreciate the points made within this post. 

If recurring billing abolishes the need for envelopes, large ATM cash withdrawals and that day of unnecessary mental strain that comes with making a monthly manual payment then I’m all for it, whether that’s on membership, protein or Personal Training. As long I can keep my balance free from debt and cancel my subscriptions at any time, recurring payments give me a feeling of tranquillity and control knowing that I don’t ever have to worry about making a manual payment again.

What do you think?

Learn more here about the benefits of using recurring payments with eFitness.

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Written by
Joe Hall
Joe is a content creator for eFitness Club Management Software. He holds a degree in Physical Education and Sport and Exercise Psychology, alongside an MA in Sport Business. He is a qualified Level 2 Fitness Instructor and Level 3 Personal Trainer and was the previously Head of Customer Engagement for a leading UK gym brand for 6 years. Nominated as an IHRSA rising star in 2018, Joe has got a lot to say on all things FITNESS!
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