Retention Management

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Retention Management ways to reach and maintain
your desired occupancy levels Develop long
term family relationships by giving your
students, and their families, the best experience
possible, so that they stay longer, bring other
family members and recommend you to their
friends Neil Uden Michaela Kmetko
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Introduction

• What is it that makes your growth sustainable?

VALUE

• If you Create loyalty through Customer Retention
  Plans?

PROFIT
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What is a Retention Management Plan?

• A clear and concise, set course of action, that
  is guaranteed to every customer

• Must be relative to the customer group

• Regular pre determined contact with each customer

• Varied forms of contact, i.e. Phone Calls,
  Emails, Letters, Text Messages In Person

• A retention plan should include key components
  but will always be unique to YOU and YOUR business

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Why do you need a Retention Plan?

• A 5 increase in customer retention will
  increase business revenue by 25 to 125

• Retaining existing customers whilst sourcing new
  customers will increase occupancy

• Studies have shown that it can be six times more
  expensive to attract a new client

• Ad-hoc attempts to increase communication can
  fail if not continued consistently

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Financial Advantages

• The industry average to gain a new student is
  around 150

• If you can increase your retention rate by a
  marginal 5

• Based on a school of 1200 students charged at
  800 annually

• This will mean an increase of 48,000 in dues
  without increasing payroll

• This can be done effectively without cost if your
  software has retention tools

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Consider the scenario

• If a parent walked in wearing a T-Shirt that
  said
• Im going to be cancelling my childs lessons
  today
• Would you treat them differently?

Most of you probably said YES
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Comparison to fitness industry

• In Australia the swim school industry in the past
  ten years has to looked to the fitness industry
  for best practice

• Sadly however, it is still 5 years behind

• Direct Billing saved the fitness industry in
  Australia in the early 1990s

• The first swim school to use Direct Billing was
  in 2001

• Typically most swim schools do not have a sales
  force, nor retention management plans

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Important criteria for retention

• Using facilities as much as possible

• Provide professional environment

• Consistently communicate with parents and students

• Give special attention to the low or non users
  (do not let them create a habit of not attending)

• Try to have had at least 6 contacts within the
  first six weeks with the parents and student

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What is often missed

• Regular facility use

• Consistent and regular personal communication

• Special attention to low and non users

• Weekly contact with customers when they first join

• Interaction and communication away from the centre

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Whats happening in Australia

• Swim Schools in Australia are now beginning to
  have a structured automated Retention Plan

• Carlile Swimming make regular contact directly
  with each new customer in their first 6 to 8
  weeks through phone calls and in person contact

• Aquatic Achievers and King Swim send postcards to
  students who have deferred over colder periods

• Polar Bear Club rewards students who swim over
  winter with a T-Shirt and party

• Phone call when a student has missed 2
  consecutive lessons

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Case Study

• Introduction of structured enrolment process

• Introduction of Deck Supervisors

• Update of child progress by letter each session

• Personal contact with parent when child moved a
  class

• Personal contact with parent if a child had not
  completed a skill for approx 6 weeks

• Birthday Cards

• Phone call, text or email for non attendance

• Personal contact with parents when classes were
  covered by relieving teacher

• Weekly follow up with parents and child on how
  they are going and resolve any issues

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Case Study Outcomes

• Occupancy rose from 55 to 80

• Student numbers rose from 550 to 1000 in 2 years

• Word of mouth referrals the highest reason for
  new customers

• 1100 advertising budget

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Considerations

• What are your customers asking for?

• What are the common cancellation reasons?

• What contact can you afford both in time and
  resources?

• How many different plans do you need?

• Direct Billing

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Case Study

• Used to drop at end of August, now dropping end
  of October

• Used to sign up for 12 week course over summer,
  now they get about 20 weeks from them, thats a
  60 increase

Example

• 1000 students pay 210 for 12 weeks

• Sign up 1st week of June Finishing last week in
  August

• 210,000.00

• Monthly

• 1000 students pay 70 per month for 5 months

• 350,000.00

• An increase of 140,000

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Recommendations

• At least 6 contacts in the first 6 weeks

• Contact after the first lesson

• Contact during/after move to a new class

• Varied contact methods (Phone, Email, Text,
  Letters)

• Welcome packs

• Low and non-attendance contact

• Reward loyalty, regular attendance and referrals

• Direct billing

Create an environment your customers dont want
to leave
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Developing YOUR steps to success

• How will you complete the first 6 contacts

• On your budget, how can you contact the customer
  regularly for the entire length of stay

• What are your different customer groups, i.e. new
  students, returning students, moved students

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For Further Information or a copy of this
presentation Contact Neil Uden, LMS
America neil.u_at_linksmodularsolutions.com Or Mich
aela Kmetko, Links Modular Solutions michaela.k_at_li
nksmodularsolutions.com www.linksmodularsolution
s.com