Members want to cancel health club contracts all the time. It’s a part of the business. It’s easy when the member has a legitimate right to terminate the contract as set forth in its terms. But in a grey or clear breach of contract situation things can get tricky. In these circumstances, sometimes letting a member break a contract is more profitable for your club than enforcing it.

Four Reasons Members Cancel Health Club Memberships

1. They move out of the area
2. They can’t afford it anymore
3. They don’t use the club
4. They are dissatisfied

Who’s To Blame?
There’s not much you can do about the first reason. However, for reasons 2-4 the health club is partly to blame. Yes - even when someone says they can’t afford to keep their membership it’s because they have reduced its value in their budget. If they placed higher value on the membership - they would be cost cutting somewhere else.

Attempting The Membership Save
When a member wants to cancel their contract they should be directed to the club manager best at making the save. Saving health club memberships is like selling health club memberships but in my opinion takes more skill, training & finesse. (Becoming a great membership saver is the subject of another post.)

If the member still wants to cancel their membership after a save attempt you now face a risk / reward situation.

Enforcing The Contract

• Risk: The member will take legal action, alert the local media, create negative word of mouth and become a toxic presence to your business. Case in point - check out the media attention this club received:

  Tussle with fitness club outlasts a membership
  Toronto Star : Gerri Hynes is more financially fit, if not physically fit, after going through a bruising dispute with Premier Fitness in Burlington.

• Reward: You keep the membership cash-flow.

Letting The Member Break The Contract

• Risk: Needlessly losing the membership cash-flow.

• Reward: Enjoying the goodwill of the member, getting positive word of mouth about how you conduct business.

My suggestion - review membership cancellation requests on a case-by-case basis, but in the vast majority it will not pay to keep a member in their contract. Instead of getting frustrated about membership cancellations use them to increase your profit. Here’s How:

1. Do A Debrief: Let the canceling member know by law you do not have to let them out of their contract. However, your are going to do so because you want to be of service. Then ask them for favor. That favor is to answer two questions. a) Ask them to please offer their advice on how you can improve the club. B) Ask them what they will say to someone if they are asked their opinion about the club.
2. Look For Patterns: Keep a cancellation debrief log. Review it often to see patterns for profit. It will alert you to your greatest areas of opportunity. It also gives you the true story about the strengths and weaknesses of your club from the members perspective rather than yours. This information can be invaluable when adjusting business strategy.
3. Act & Improve - Put the cancellation intelligence to work. Turn a negative into a positive by improving the areas of your club that are responsible for membership cancellations.
4. Follow-up & Reactivate Canceled Memberships with a Two-step Process:
   a) Contact past members one month after they canceled their membership. Tell them you’ve acted on their suggestions and thank them for their support.b) A month after that, contact them again. Tell them you want them back and provide a special incentive to re-join the club month-to month.

Attrition is a major revenue drain for fitness businesses. How do you handle membership cancellations in your health club or gym?

Tags:fitness club, gym, health club, health club contracts, health club memberships, membership cancelation, memberships, word of mouth