Lowering the Attrition of a Health Club Chain
The Problem We Solve
The Client is one of the top five health club chains in North America, with approximately 200 locations and 500,000 members. Client was struggling with attrition rates of approximately 46% annually. Coupled with declining sales, the high attrition rate resulted in a declining monthly membership count. As a result, client engaged Enabled Concept to help develop a comprehensive attrition reduction program utilizing predictive analytics.
Our team was engaged to reduce the monthly member attrition rate on a sustainable basis by:
»Developing and back-testing a predictive model to identify a list of members at-risk for cancelling their membership
»Segmenting at-risk members, then designing and deploying tactics to attempt to retain the members.
»Building internal capability to institutionalize the models and retention tactics
Our team created a predictive model which outputs a monthly list of members who are at risk of cancellation in the next 90 days. The list can predict actual cancellations with 60% accuracy.
Compared to the report previously used by the client, the Enabled Concept model is almost 15 times smaller and 6 times as accurate.
The use of the predictive model and corresponding retention tactics generated $6.9M in gross annual benefit from reduced attrition.