Behind the Numbers: The Surprising Impact of COVID-19 On Gym Memberships

Behind the Numbers: The Surprising Impact of COVID-19 On Gym Memberships

Wodify is a leading all-in-one fitness management software, trusted by 5,000 of the world’s top businesses. With one of the largest & most accurate datasets in the industry, we decided to create this blog series in order to share specific metrics that are proven to drive results, insights from the most successful gyms, and how Wodify customers can track their progress. 

Intro

In the last Behind The Numbers blog we touched on tactics to increase the ever-so-daunting 90-day retention rate, along with annual revenue, by using performance tracking. In this edition of the Behind The Numbers series we explore another fitness business revenue trend, by analyzing the impact of the COVID-19 pandemic on gym memberships.

WARNING: the data we are about to uncover may result in an extreme mood boost.

There are three positive data trends related to gym memberships from pre-Pandemic levels to now, that will be discussed in this blog:

  1. The number of memberships purchased per month is increasing
  2. More clients are purchasing recurring memberships 
  3. The length of commitment is trending upwards

1. Number Of Gym Memberships Purchased Per Month

We have seen an overall increase in the number of memberships purchased per month. This is great news for all the gym owners out there because an increase in number of members means an increase in revenue. You can see the patterns in the table below.

This table shows that before March 2020 the average number of memberships per gym was 104. For the first few months of the COVID-19 Pandemic, the number of memberships per tenant dropped by 11% down to 93. Nevertheless, starting in July 2020, it hopped right back up to 104 and remained that way until April 2021 when it jumped up 7% to 112 average number of memberships per tenant per month.

This tells us not only that members are committed to their gyms but more members are willing to commit to gyms since March 2020.  

2. Increased Member Commitment

Once we looked at the number of memberships purchased, we decided to take a closer look at the distribution of membership types: session-based versus plan-based. To clarify, session-based memberships are sales of a fixed number of classes, such as a 10-class punch card. On the other hand, plan-based memberships allow a person to come to a limited or unlimited number of classes over a certain period of time, such as a month-to-month membership. 

Since most gyms closed their doors during the height of the pandemic, we expected an increase in the percentage of session-based membership sales, compared to plan-based memberships, due to the uncertainty of when people would actually get to go to the gym. However, the data revealed something quite different. With Halloween right around the corner, you could say that we were both tricked by the numbers and treated to some sweet news. Our research uncovered the fact that the popularity of session-based and plan-based memberships remained the same, respectively. 

Previous to the COVID-19 pandemic, plan-based memberships accounted for 93% of all sales and session-based made up the other 7%. Since the COVID-19 pandemic began in March 2020, plan-based memberships now account for 94% of all sales and session-based make up the remaining 6%. 

3. Increased Length of Commitment

Yes, there’s more good news from the world of data - not only are people signalling higher levels of commitment to their gyms by purchasing plan memberships, but they are committing for longer periods of time than they were prior to the pandemic. Prior to the pandemic the average length of commitment for a membership was 154 days and since March 2020, this number has risen to 163 days with the last 6 months averaging 178 days. That is a 16% jump in average length of membership commitment, which means members are more confident than ever in their gyms.


5,000 gyms are powered by Wodify.
The leading gym software.

The Impact to Gym Owners’ Bottom Line

You may be wondering why these numbers are so exciting to the Wodify Team, and I’ll tell you that it should excite gym owners just as much, if not more. Let’s put this data into one extremely encouraging sentence: not only are more people than ever purchasing gym memberships, but they are more committed to and staying longer at specific gyms than ever before. This is huge news for gym owners’ revenue streams.

Memberships are the main source of revenue for gyms, but the most important part of running a successful business is to have recurring revenue. Plan-based memberships account for predictable, recurring revenue and session-based memberships account for inconsistent & unpredictable revenue. In other words, revenue from plan-based memberships is revenue you can safely count on, whereas revenue for session-based memberships is revenue that you cannot safely depend on to run your business. 

To put this into perspective, think about the popularity of subscription memberships. There are TV & movie subscriptions, music subscriptions, vitamin subscriptions, clothing subscriptions, deodorant subscriptions, wine subscriptions...you get the point. Everything is a subscription these days and while, yes, it is convenient for the consumer to not have to go out of their way to purchase these goods, it is even more beneficial to the business. Instead of a customer buying one movie here and there, they are consistently paying regardless of how many movies they actually watch in a month. This creates a consistent revenue stream for the business without having to worry about re-marketing to customers. 

In summary, the reality of consumers continuing to purchase recurring, plan-based memberships at the same rate as prior to COVID is both a positive indicator for confidence in the brick & mortar fitness industry as well as a benefit for the financial health of fitness businesses recovering from COVID-19 shutdowns. 

Moving The Numbers - Pro Tips

Now, with this positive news, let’s take a closer look at what gym owners have been doing recently that may be encouraging more clients to commit and stay longer. You want people to call your gym home and not just stay a little while, so here are some tips to keep attracting new clients and to create a space that people want to be a part of:

1. Maximize Use of Client Performance Tracking

You’ve heard it once in the last Behind The Numbers post and you’ll hear it again in this one: performance tracking. The fitness industry continues trending in the direction of gamification and if you haven't implemented a gamification strategy in your gym you’re probably falling behind in terms of retention. Some common examples of gamification in other industries are coffee shop rewards, airline loyalty programs, and tracking steps. This encourages people to continue buying from the same coffee shop, booking on the same airline, and even walking around their living room just to reach 10,000 steps for the day. 

The easiest possible way to implement this in your business is by maximizing use of client performance tracking, which will increase community, engagement, and retention up to 20%. Performance tracking is a feature within Wodify Perform that can lead to upwards of $2,600 in additional annual revenue due to it’s gamification. You can read more about it here.

You can book a demo to learn how you can start using Perform as soon as possible!

2. Celebrate Client Achievements

Keeping clients engaged and feeling valued is key to improving retention. Celebrating achievements like gym anniversaries or personal records is an easy way to make your clients feel recognized as a part of your community. 

Try posting a story any time a client has an accomplishment and tag them, so they can re-post it and brag to their friends. This is a great way of simultaneously making the client feel proud, but also getting more exposure for your gym. If other social media users see your gym celebrating their friend, they are likely to want to be a part of that community as well. 

Another way of celebrating achievements is by giving clients a discount or swag. This could be as simple as giving them a month for free or giving them a branded water bottle. Small gifts show that you value them as a customer and are willing to give back to your community. Try running an attendance leaderboard challenge, like CrossFit Sanitas (pictured below) as a fun way to reward engagement.

The more people feel connected with the gym community, the more they have to lose by leaving. The goal should be to make it harder for the member to leave your gym that it is to stay. 

3. Ask For Feedback

Asking for feedback can be scary because of the potential negative feedback, which no one wants to hear. However, it is one of the most important things you can do to increase the likelihood of maintaining and gaining memberships. It may sound obvious, but people want to stay members of a gym that actively listens to and makes changes based on feedback from its clientele. Change is inevitable, so instead of guessing, why not get ahead of the curve and know exactly what your clients would like to change if they had the choice. 

This is another great strategy to make your clients feel like an active part of your community and create a gym that is staying up to date with the fitness trends. Instead of doing hours of research on what the new fitness trends are, just ask your clients what they would like to see.  

We hope you found these insights & advice useful for your business! Keep an eye out for more posts in this series as we continue to explore the data in Wodify. 

If you are a Wodify customer, you can learn more about Wodify Perform

If you aren’t using Wodify yet, you can book a free consultation here


Want to keep learning? Check out our other Behind The Numbers posts:

Why Every Gym Needs Client Performance Tracking 

90 Day Client Retention

Lead Conversion Rate & Attendance

Impact of the Pandemic and the Cost of Membership Holds

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