Creating Effective Loyalty Programs: A Comprehensive Guide

Loyalty programs are an extremely important tool in client retention. Client retention is an extremely important tool in a successful business. A successful business is an extremely important tool in a happy, comfortable life. See where I’m going with this? Yes! Loyalty programs are an extremely important tool for you, a gym owner to live a happy, comfortable life.

Just kidding. That’s a bit of a stretch.

There are, without a doubt, many more factors that play into your life being happy and comfortable. However, creating a reward system for loyal customers can create a little sense of comfort in managing your business. Cultivating an effective loyalty program for your customers can grow your client base and can increase retention by 5%. An increase in retention by as little as 5% can increase your profits by 25% to 95%. That margin may be large, but with a 25% increase as the minimum, your fitness business will benefit from employing a reward system.

Importance of Loyalty Programs in Fitness Businesses

Fitness centers are the ideal businesses to employ loyalty programs because the business focuses on returning members and consistent relationships with clients. Getting fit and staying fit is a continuous process and definitely not an easy one. So why not make it a little easier on your customers’ wallets if they have been returning to your facility for a period of time?

Clients who have invested in being members of your gym have important information and reviews to share about their experience there. Therefore, rewarding them for their investment encourages them to become advocates for your fitness business. On top of the powerful retention loyalty programs provide, they also give your clients more to brag about on your behalf.

In the last year, the number of health and fitness facilities has increased by 4.5% this means more competition. That number is rising every year. Keep your clients engaged and keep your business competitive with an effective loyalty program.

The metrics that you will gather data on, and eventually be able to control, are customer behavior and engagement. This will help you to better personalize your services and rewards later on down the road. Thus, increasing your conversion rates in almost every aspect of your gym’s services.

Who are your customers?

Before starting the process of building a loyalty program, first, understand who is visiting your gym. Right now, the demographic that is most influenced by loyalty programs are Gen-Zers and Millenials. That just so happens to be the majority of the people who are visiting gyms this year.

87% of Gen Z claims to train at least three times a week according to a consumer survey by LesMills. To go even further, 81% of the participants in group fitness classes are Millennials or Gen Z. People this age love to socialize, and participating in group classes is a great way for them to get fit and get social.

Whoah! There’s an idea coming together here. Use the social factor of group sessions or classes as a selling point. This also makes for a great reward to offer this group for being loyal participants. This also increases the number of people that this age group will bring to your gym.

As for the rest of your customers, look through the data that you already have collected, and make sure you have the right information lined up for the right audience. The data could possibly be very different than what is listed above depending on the audience your gym attracts in the first place. Different audiences will require different reward systems. For the most part, however, loyalty programs will have a greater effect on Gen Z and Millennials.

Who is successful with loyalty programs?

Many different types of loyalty programs exist and they are successful for different reasons. You could even be creative and come up with a completely new system that works well for your business.

Point systems are usually where loyalty programs begin and provide an easy means for keeping track of progress over time. Points can be beneficial for rewarding members for the amount of money they spend at your business or the time spent visiting.

Overall Success

Ultra successful cases of the point systems are in the business of coffee. Starbucks and Dunkin’ Donuts have rewards systems that allow their customers to receive free drinks, drink add ons, or food for every certain amount of points they earn. Starbucks even offers a Visa card to use for any purchases you would like to make inside and outside of Starbucks. Every purchase made on that card racks up points that you can use to redeem Starbucks goodies.

Providing a Visa card probably will not be beneficial or possible for you to employ at your gym, but it is a good model to understand. Starbucks is using a rewards system to drive sales to their company through outside purchases. Employ a program that will drive sales to your business through every means possible.

Starbucks absolutely had the purchasing power to design and employ their own unique loyalty program. This requires resources that I don’t imagine most of the readers of this article have. If you have resources on par with Starbucks, then I guess I am a bit honored that you decided to read this article anyway.

Success in the gym market

Let’s go over some more humble examples of loyalty program success specific to the fitness market.

Perkville is an app that has provided a notable increase in revenue for gyms, retailers, salons, and yoga studios. During my research, a case study that stuck out was their work with O2 Fitness, a chain of gyms in North Carolina.

Employing a rewards program through Perkville increased this business’s personal training session attendance by 33%, monthly referrals by 17%, reduced cancels in the fourth quarter by 3.5%, and the company had over 4,000 shares on social media. This was all data collected within the first four months after the users signed up for the rewards program. Talk about stellar success!

Participants of the program were rewarded for their attendance, referrals, and shares on social media with a point system. The highest reward is a free year of membership for 25,000 points and the lowest reward is $10 off any in-club purchase.

They also partnered with local businesses to offer other rewards like massages and tanning sessions. This is a strategy that I would encourage anybody to use when implementing a loyalty program.

Partnering with other businesses for rewards can reduce the cost out of your pocket for provisions.

Perkville does its own marketing very well with its detailed case studies, but take a look at other programs that offer the same services.

Loyalty Program Softwares

A loyalty program software should let your customers access their rewards account on all devices (especially mobile), encourage them to share about your business on social media, and integrate with any other software you use for client management.

Perkville

The majority of this company’s users are gyms and yoga studios. This company has extensive case studies to exemplify their success in creating loyalty programs for health and fitness clubs, so this is a great option for getting right to the point about what you want out of your loyalty program.

Perkville offers custom branding for all client-facing applications in order to streamline brand engagement with your business.

Pricing starts at $99 per month for each location you would like to use it. The $99 services up to 2,500 rewards members. If you are looking to service over 5,000 rewards members, then it will cost $199 for each location per month. Perkville does offer discounts for contracts spanning over two years.

Glue

Glue is an extremely responsive and automated software that consistently provides your members with coupons, incentives, and updates about their reward membership. The selling point is its automation in membership management. This software is easy to set up as you can fill out a questionnaire outlining the needs and goals of your business. Glue will custom brand all client-facing apps and interaction points and provide you with the reports you need to stay in the loop with how your customers are behaving.

Glue’s pricing starts out at 99 cents per member for up to 50 members on your rewards program. The price drops in two tiers to 69 cents for 121 to 500 members. Therefore, this software is a good option for smaller businesses.

HaloLoyalty

The fitness industry is one of the main focuses of this company, therefore what HaloLoyalty offers to fitness businesses is extensive. You can track and get a responsive report of all customer behavior and have rewards offers automatically generated to tailor to your rewards members. Data that is collected is updated instantaneously so that you know what is going on with your customers in real-time.

Pricing for this company’s services is not listed, however, they guarantee a response within 24 hours of your inquiry.

Fivestars

Fivestars wants to bring the power of million-dollar loyalty programs to local businesses. They know that not all businesses have the resources to create ultra-effective loyalty programs like the aforementioned Starbucks. Fivestars also provides the technology you need to sign members up at the point of sale.

This company connects local businesses through generating points at every location serviced. Therefore your customers can generate points to spend at your location at any other location affiliated with Fivestars.

Pricing for their services comes in two different plans: the Essential and the Pro. The essential plan lets you employ up to 8 autopilot campaigns and one promotion per month. The Pro lets you employ unlimited promotions and unlimited messaging.

Kangaroo

This business has a couple of unique features that can be beneficial for franchised gym locations. If you have locations around a region, Kangaroo will use geo-location tags to send offers to rewards members when they are near the location of your gym. You can personalize it to match your brand identity on all client-facing apps. Employ email, SMS, and push notifications.

The pricing for this company starts at $79 per month and goes up to $149. It does not require a contract so you can cancel at any time. Pricing is based on the featured offered rather than the number of rewards members.

Kickback Rewards Systems

KickBack offers clients the tools to build and manage their own loyalty programs while integrating with others. Users enrolled with kickBack rewards can earn points by shopping or visiting a multitude of different places. The selling point for this company is the ability for clients to integrate multiple rewards systems. Thus, the network that KickBack provides for members can be beneficial to client attraction to your fitness business.

This company provides custom pricing based on the needs of your business, but the website notes that they try to maintain affordability as much as possible.

In Summary

Lots of businesses exist in the market of getting your business set up with a loyalty program. This is just a little more evidence of the importance and effectiveness of loyalty programs in customer retention. say goodbye to gym hopping clients and hello to increased revenue.

If you have any feedback, then please leave a comment below. If you know someone with a gym who just might benefit from this information, then feel free to share. Check out the rest of our blog for more information tips and tricks in the fitness business.