[Webinar] How to Save Membership Cancellations: 3 Straightforward Strategies

Webinar Overview

You have a member who wants to cancel. What now?
You can't save every cancellation but this webinar will cover 3 strategies to definitely increase your odds.
Join Keith McGregor, PerfectMIND Customer Success Manager, for a webinar that every membership-based business owner needs to watch.

PerfectMind Inc | 4333 Still Creek Drive 2nd Floor Burnaby, BC V5C 6S6 | www.perfectmind.com

About the Speaker

Keith McGregor
Keith owned and operated his own fitness and kickboxing club for 7 years before owning the title, Manager of Customer Success, at ChampionsWay. He has successfully set up over 400 membership based businesses and is often considered the retention expert and go-to man for business management solutions.

Video Transcript

Hi everyone, welcome to today's webinar; thank you for joining us. If you'd like to stay up to date with Future Perfect Mind webinars, promotions, and updates please like us on Facebook at facebook.com/perfectmindfans. I would like to introduce today's webinar host Keith McGregor, Keith is the customer success manager at Perfect Mind and ChampionsWay. He has been with ChampionsWay for five years and ran his own fitness club for seven years prior to joining our team. Through his years of experience he has become a retention expert for membership-based businesses. I'll let you take it from here, Keith.

Presenter (Keith McGregor)

Thank you Noah, I hope everybody can hear me. Again, yeah my name is Keith McGregor, customer success manager for Perfect Mind and ChampionsWay. We've done a lot of webinars about retention, how to prevent cancellations, and I wanted to kind of touch base in this webinar about what happens when somebody actually cancels. Some simple strategies that you can use, that should help. As Noah mentioned, I ran my own fitness club and kickboxing school; Maximum Fitness and Kickboxing for seven years prior to joining ChampionsWay, eventually closed it down, it became more or less of a chore to run it, and I wanted to move on to other things, but along the way I learned a lot. And I learned a lot more when I came to ChampionsWay.

I have successfully setup over four hundred membership based businesses in my tenure at ChampionsWay. So when you go about that, you learn a lot about how to deal with cancellations with the membership based businesses. The real key here and I will talk about that here is prevention; how you can prevent it from happening… We will touch base on some of that as well, but we'll get going and start with our first slide.

So, this is a big thing that I hear from all of the martial arts schools, fitness clubs, yoga studios…everything is about marketing. Everybody wants leads and they ultimately want sales. The one thing that I've always stressed and I've talked about this in my retention webinars is what good does it do to gain five members but lose six? And I talked to numerous, numerous membership based businesses and they're always talking about you know I gain on average five to seven new students or, members a month. But I always say how many did you lose? And that's one thing that they genuinely don't track. This is the attractive side of running a membership based business; how many did you gain? The unattractive side is going to be how many did you lose? And did you actually measure that? And do you know why you actually lost?

So, there're three reasons why members cancel. Anytime a member comes in and they request to cancel or they call you up and request to cancel, they're going to fall into one of these three categories. One they didn't see the value, okay, these are the people that ultimately don't feel that they're getting the results, they're paying too much, and so. Two they didn't use the service, these are the people that I always talk about; they could have been prevented. Had you know that they weren't attending your club, your school, your studio; you could have actually probably saved these people. Three they didn't like the service. Now these are the people that have issues with say the cleanliness, the atmosphere, and so on. We're going to go into each one of these, kind of dive into them. This could have been prevented. I know a lot of you, who have attended my webinars before I probably sound like a broken record, but I always say this; cancellations don't happen overnight. It is a process, and it starts when they stop attending your school, your studio, your fitness club…

These are the things that you can actually prevent, okay but now we're going to get into it because it's too late for that. You have the person on the phone, they're in front of you, and they're cancelling… Here's the basics of damage control, okay, and this is for any business not just membership based businesses. So this is something that you should really pay attention to. When somebody comes to you or calls you or requests to cancel, listen! That is really the key. Let them vent, let them get it all out, okay? The very worst case scenario here is you're going to get valuable feedback. They may still cancel, but you're going to learn something from them. The one thing I've seen and I know from personal experience is cancelling for say instance is my fitness club. And speaking to the manager of a fitness club and saying, "I'm going to cancel my membership," and the reason I was going to cancel my membership was an odd one. I remember there was a guy they let train in his underwear if you can imagine that. I felt that was absolutely disgusting. When I tried to cancel I talked the manager, and I know many of you would just walk out at that moment, the manager would interrupt me nonstop; trying to correct me. That's something that is going to backfire you, hugely. Anytime you interrupt somebody who's cancelling, they're already upset about it. If you start to interrupt them, they're going to guaranteed walk out.


Let them say their thing, let them get it all out, and then plan the course of action after that. Now, I talked about two different types of cancellations, okay? The two categories that I call are one is the cry for help, and the other one it is called the real deal. The cry for help is the most savable type of cancellation, okay? These people need a little more attention. These are maybe the people that signed up at your fitness club and they didn't lose the weight, they didn't gain the muscle, they didn't get the six-pack that they thought they would. Maybe these are the people that thought they would become black belts in one year at your martial arts school. Maybe these are the people that find it hard to hold yoga positions. They just need a little more attention. Now this is where I recommend private sessions, and this is something I did a lot of at my fitness club. I was a certified personal trainer and I had a background in bodybuilding. And what I would do is I would take these people aside, these people were only paying twenty to thirty dollars a month mind you; just that one hour you spend with them made a world of difference. Show them a few tricks if you're a martial arts instructor, take them aside for a private intro. Monitor the progress.

The other thing you can do is set reminders for yourself. And again, I know we have a lot of champions with Perfect Mind clients here, but we also have people who are not champions with Perfect Mind clients here. In our system we can set reminders, we set tasks; we set calendar reminders, and so on. We always teach our clients to do that, because the one thing you can do is you can actually help someone but if you forget to check in on them later; it starts all over again. These people are damaged, and like I said it doesn't hurt to check on them maybe once every two weeks. Setup a reminder; setup a task to call these people, see how they're doing. This is one of the biggest things you can do in the cry for help situation.

Now, we talked about the real deal. These are the real cancellations and you should be able to sense these right away. Is it a cry for help, or is it the real deal? These are the guys that are leaving to a competitor. The ones that leave to a competitor they have made up their mind, they're switching over, and they're going to go to another fitness club. They're going to go to another martial arts school, another yoga studio, another dance studio and they have already talked to those people, and they've made up their mind. These are the ones that are the hardest to actually bring back. Now, if you let it get to this point, the one thing you can learn from these people is, why are they leaving? What was it? You want to get information. Were they overpromised? Did you tell them for instance that they would lose twenty pounds in one month and they didn't? Maybe it was an issue of the price, the competitor down the road is charging less. Maybe they just didn't like the facility overall. I've been to a lot of fitness clubs where a lot of women haven't felt comfortable. Those sorts of heavy, free weight type gym facilities women just don't feel comfortable in it, that's why they have all the ladies' fitness areas now. They didn't like the classes, this one is tough. No martial arts instructor, because I deal with tons of martial arts instructors; no martial arts instructor wants to hear this. That the classes weren't engaging, but if you hear it time and time again, it's something you need to look at.

Now this is one I personally had; did not like the staff. I couldn't be in the gym all of the time. I had par-time staff, generally young people who would run the front desk. And I learned a lot and I acted too late. I lost numerous members because of one particular staff member. If you get feedback about a particular staff member, do something about it! We're going to talk about these a little more in-depth. People who are overpromised, were they? Ask yourself that. Is it the sales process? Maybe it was with you, maybe it was with your front desk person; maybe it was with your sales staff. Were they overpromised? Did they promise them something that they could not possibly achieve, and therefore they decided to cancel? Investigate that. What is being said in the sales process? You need to know these things. If they didn't like the prices, this is one of those things that I maintain. We don't want to talk about lowering prices, because that can cause an uproar… Lower the price for one member and the other members also want to lower their membership price. Instead, add value. Give them something extra. If you're charging somebody one hundred and twenty dollars for martial arts classes, give them something extra so they see the value.

This is a big one, and this is one that I got personally a lot too. They didn't like the facility because of the cleanliness. A lot of people would tell me that, and I had a largely male dominant gym. A lot of free weights, a lot of bodybuilders, and so on. The one thing that the women would always complain about was the cleanliness. The fact that people weren't putting away their weights, we had a ring for the king boxers and people felt that it was always dirty; it wasn't being cleaned, the mats weren't clean, and so on. They were giving me feedback and they would constantly cancel because of this. And it's one of those things; you have to react to this. People want to be in a clean facility. This is something that I really stress.


We talk about Champion's Martial Arts, part of ChampionsWay, we also have Champion's Martial Arts which is the largest martial arts school in Canada with seven hundred active students. And the one thing we do for all of our new staff members, so they know how martial arts schools run because so many of our clients are martial arts school owners we take the new staff up to Champion's, and the one remark I always get when they come back is how clean it was. It's a huge place, it's got three floors, but every mat, every bag is spotless. It's something they maintain, and they're very successful at it. Cleanliness, atmosphere, this is getting back to that whole thing. Atmosphere for gyms, is it intimidating for them? That's one thing that you have to address. Do you need a ladies' fitness area? Are people putting back their weights? If you have a fitness club, and you have people that do not put back their weights; that is a complete turnoff for a woman. They will walk out. They do not like lifting heavy weights off of machines. You need to build an atmosphere that is comfortable for all of your clientele.

Now this is the other one. I get this with martial arts school owners all of the time, okay? They don't like the classes. This goes for you yoga schools as well. No one wants to hear this, but you may learn something. Find out exactly what it is about your classes that they don't like. Or is it your instructors' classes? Look for trends, and I'll talk about trends a little bit later, and this is something you all need to practice. But I will talk about that in a little bit, maybe there's a specific instructor that people just don't seem to like the way that they teach their classes. You can learn something about that. Maybe you need to remove that instructor, but maybe it's you though. Okay, and this is again they didn't like the staff. Address it immediately. Find out what's going on, because you don't know what's going on behind your back. Is your staff doing something that's hurting your business? And I see this a lot, and with membership based businesses especially, you're going to hire young staff. You're going to have those part-time eighteen to nineteen year olds that are going to be on the phone the entire time, chatting away with their friends. It doesn't look professional. These are the things that you have to know are going on behind your back. Always listen to the feedback that people give you about your staff.

I'm going to talk about collections, and this is something we get quite often they say, "Do you offer collections at Perfect Mind and ChampionsWay?" We offer full-service billing. Now that's a little different than collections, okay? Full-service billing is a service where they will actually do the billing for you, and they'll call clients that don't pay. They don't put them into collections though. Collections is a really, really tricky situation here. I call it a dinosaur mentality. In social media today if you put somebody in collections, they're likely going to trash you. I'm going to say that it's highly ineffective. And if they do collect, they're going to take a large chunk of what the member owes. I honestly say to all of my clients now, "Do not put people into collections!" And you can see the social media backlash when you do. You can see it on yelp; you can see it on all different sorts of social media outlets. When somebody gets thrown into collections, they will backlash at you. They will blast you on social media. This is something that I say is useless these days for membership based businesses.

Full-service billing on the other hand; a completely different thing… Full-service billing means they're actively contacting the student or member just making sure that they're paying. Very effective, but collections not so much… Okay, so now I want to talk about this, and we talked a little about trends, and I'm going to get into this a little bit with all of you. You can't manage what you can't measure. Are you measuring how many people are actually cancelling? Can you tell when people are cancelling based on say for instance the trend, time of year? Do you actually know how many members cancelled this year? This is something that you need to track at least monthly, if not weekly. And I have a tool for this and anybody that wants this, you'll be able to email marketing@ChampionsWay.com or marketing@perfectmind.com and they will send this to you, and I'm going to show it to you in just a little bit, how you can track this. Do you track your competitors? This is another big thing. I find that a lot of the actual school owners, gym owners, yoga school owners, they don't even track where they're losing their cancellations to. You need to know who your relevant competitors are. You need to track the trends. And this is one of those things, it's a basic simple thing to do and maybe some of you do do it…okay, but the one thing that I personally did was I tracked where I was losing to my competition. I would always know how many requests I was getting, and I would always know how many I was losing, and how many I was saving. And I'm going to show you this. This is a simple excel sheet to track this, your trends.


From here you can have your months and your year, and you can simply put in the numbers of who tried to cancel, who actually cancelled, and who you saved. From there the numbers will plug into this graph, and show you your trends. So you can see the blue line is the requests; these are the people that are trying to cancel. Okay, this is not real stats. I just plugged these stats in myself. You can plug them in any way you want; obviously you want to plug them in accurately. But the idea is the blue line will now show you the actual trends; the people that are trying to cancel in your business. So you can see back in January of 2011 it was steady, jumps a little bit here in the summertime. This is a big thing for martial arts schools we've all seen it. Summertime they will always jump, again summertime it jumps, and then all of a sudden it starts going up, and up, and up, and up. Then you know that you have a major problem, but hopefully it doesn't get to that point. But that's the logic behind this one, okay?

So, over here you can see how many you actually save and so on. And over here you can see how many you lost. And it's just a simple excel sheet that you can use, and what I can do is I can actually send this to anybody that's actually interested in it. Just again emailmarketing@ChampionsWay.com or email marketing@perfectmind.com and we can send you this excel sheet, it's just a simple one so you can actually just plug in the numbers yourself anyway you want to choose to do so. You can actually track your trend, and you can use it for competitors as well. Use the three columns that say for instance "your competitors," you have three major competitors in your area, so what you can then do is you can actually track the trends to see who you're losing to. This is actually a really effective method. When you can actually watch the trends, now you know how to fix things. If you're losing to a specific competitor you want to investigate this competitor. Why are they actually losing to you, or why are you losing to them? Find out exactly what they're offering that's so enticing to your members. You have to combat things because when it gets too far it will be un-savable.

Now the rules of attendance, okay, there are different rules for different businesses. Now I'm going to take the three major businesses that we deal with. Martial arts schools, this is dangerous, when somebody doesn't attend within seven days they're gearing up to cancel. We say this time, and time again. And we rate these people, and everybody in the martial arts industry knows we call these people C students. A C student is somebody who is getting ready to cancel, you need to stop it right there, and you need to call these people and find out why they're not coming to class. Now for fitness clubs it's a little bit different, okay for a fitness club that run say for instance two hundred, three hundred, four hundred members and so on, they're sort of that niche sized fitness club…no attendance in fourteen days. Now, the reason why fitness is a little different is because they're not offering classes, these people are using your cardio equipment, your weight equipment, and so on. Fourteen days is the danger zone there. Again, in Perfect Mind you can adjust these settings, so that you can actually track these people. Yoga studios are the exact same, no attendance in fourteen days. So that's really one of the things too with yoga studios, it's not quite as set as martial arts. You will have people that do not take classes for say for instance for two weeks, it's not a huge concern at that point, but past fourteen days though that would be the concerning point. These are the people that you want to contact immediately. Or have your system automatically email them to say, "Hey, we've noticed that you haven't been in class lately." And again our system actually does that for you. But a phone call adds a nice little personal touch to this.

So if you have front desk staff, this is something that they should be practicing on a day to day basis. The first thing that they should be doing is going through their list; their views typically look at the people who have not attended in seven days. Look at your C students, and again for fitness it would be fourteen days, yoga studios fourteen days, and start contacting them. Finding out exactly why they haven't been to class, or why they haven't been to the gym… Now I just want to show some of this, and then we'll take some questions here. This is our dashboard for Perfect Mind, and I know many of you are familiar with it, but I just want to show you it does track these, okay? It will show you how many students you lose. So, it does show you. The same as the excel sheet, the excel sheet may just be something that will help you track the trends a little better, but we are actually offering something now new with the dashboard where you'll be able to adjust it. So you'll actually be able to see the trends on the dashboard as well. And you'll be able to see you A/B students and your non-actives. And you'll actually have a pie chart so that you can actually see how many of your members are actually active versus non active versus gearing up to cancel…those C students. Now again, I get back to this and I always sound like that broken record. Attendance, I always say attendance is the key.


If you're not taking attendance and you're a membership based business, I can tell you right now your competitors are, and they will hurt you because they will know who's about to cancel. It's the simplest thing in the world, all you need to do to attend people; you go to your check-in app, you can go to your class, and you simply click attend, and it automatically attends that person. Now, the other thing it does too is it tells you whether or not they have a C rating. So when they're coming into class, or they're coming into the gym, you know this person hasn't been coming very often. This person in this case, this is a martial arts database, hasn't come within seven days. They're coming less than once per week so it rates them a C student. Now, in the yoga database it will rate you as a C member depending on again how you adjust your, A, B, C settings. So, this is really imperative now. You have a chance now to actually talk to this person and find out why they're not coming to class on a regular basis. This is really the key here to taking attendance. And again, having the knowledge at your fingertips; knowing what's going on.

Each and every day for those of you who use Perfect Mind you will receive the twenty four hour report. The twenty four hour report is going to show you exactly how many students you lost, how many students you gained, it's going to show you the attendances this month, and so. So this is really a screenshot of how your school, or your fitness club, or your yoga studio is doing. It sends it to you each and every day, you receive this email, and you can see it. You cannot manage what you can't measure. This is really the thing here now. So what I'm trying to stress, and I've stressed this time and time again, the apps are at your fingertips, you just need to use them, and prevent people from cancelling in the first place. That's my presentation here, we had almost a half hour; I wanted to open it up to some questions from all of you. So, Noah I was going to let you to take over here. And if you could maybe read out some of the questions that we have, I will give you a moment to actually type them in. One note that I'm going to actually just give a quick mention to is next week we will be doing an attendance and retention webinar. The webinar host won't be me. It's going to be somebody much more qualified than me; it's going to be Master Ingrid Kasper. She will be running our attendance and retention webinar, and as I've mentioned she runs the largest martial arts school in all of Canada with seven hundred active students. So, she will actually be offering her webinar next week, and we'll get the exact date for all of you. There will be a popup on your Perfect Mind; we'll send you an email to you, that's a webinar you don't want to miss. So Noah, we'll open it up to you.

22:48 (Q & A session begins)