Correlation Does Not Equal Causation; Cracking the Retention Barrier by Will Phillips March 2010 I entered the health club business some twenty years ago as the chair of an owner's roundtable. One of the first things that I learned was that those who didn't exercise regularly or couldn't make it a habit, lacked self-discipline, willpower and perhaps even had a weak character! An observation like this will cause many owners to nod their heads and agree silently. This response is so common across all industries that it has been given a name: "blaming the victim." In other words, if they don't do it the way we think they should, it must be their fault, and we have no responsibility to them. As a result, clubs tend not to dig too deeply into changing the behavior of their members in order to meet their deepest needs. Of course, they present the personal training and group exercise during their introduction to the club, but that is not the same as understanding the new member's most serious problem-how the club itself may undermine their desire to exercise. I was also struck by two items which represented significant barriers. The first obstacle is the penetration of only 14% of the market. The second is that we lose about half of our members annually, with the average membership lasting somewhere between 18 and 24 months. These numbers have been persistently troublesome to every club owner I know. Because of these numbers—particularly the attrition—the health club business has been driven more so than most industries by sales efforts. Sell well and succeed, sell poorly and struggle. Although there is nothing wrong with having a strong sales lever, it does lead to several dynamics endemic in the club industry. There are more sales consultants than any other type of consultant, and attention to sales numbers often detracts from the attention we pay to delivering value to members. The Deception of Correlation For the last 10 or 15 years, data has demonstrated the correlation among a number of factors, one of which is always retention. Members who pay a larger down payment stay longer; those who participate more in the first eight weeks stay longer, and so on. While it's understandable, it's quite incorrect to interpret these as cause and effect relationships when they are in fact completely separate dynamics. Consider this. In middle school, taller boys always wear longer pants. The correlation is about 0.98 which means that that 98% of the time, a tall boy will be wearing longer pants. These are co-occurring factors, but they are not cause and effect. Obviously, no parent who hopes to see their short child grow taller would buy them pair of long pants in order to achieve their goal. The same is true with the data correlating club retention with other behaviors. Take for example the concept that those who participate more in the first eight weeks stay longer. In fact, it's much more likely that the committed exerciser is likely to work out more during those eight weeks and stay longer. Those committed folks are generally also motivated to pay more upfront as an initiation fee. Extensive research by one substantial chain, which had about 26 locations at the time focused on improving new member experience at a club during the first four to eight weeks. The research showed only marginal; i.e., less than a few tenths of a percent improvement in retention. Yet people still raise the question about retention and come up with a variety of ideas that frequently have little to do with the reality of what goes on. The idea that things happening at the same time are not necessarily related is more familiarly known as: Correlation does not Equal Causation. Two Distinct Types of Members There are two distinct types of members, one is the committed exerciser, who has made exercise a life habit and have often joined health clubs long before the proliferation of clubs of the last century. Whether they do individual fitness, personal training, or group exercise, exercise is part of their life. This group, however is a minority. More people have joined your club—the 80% of uncommitted exercisers—for whom exercise is not an abiding habit. By selling these people a membership, you have also created a quandary that is difficult to solve: enabling them to actually change their exercise behavior. When asked, they may cite a time or money problem, but time and money are never barriers for a person doing what they really want to do. Time and money do impact sales but they are variable. Your club provides exercise opportunities, but it also needs to create opportunities to change long-term beliefs and behavior. Engagement and attention help in resolving the regular exercise behavior change problem. This comes into play when a new member signs up for personal training or group exercise. Both of these provide extremely intense engagement and emotional support that are powerful tools in forming an exercise habit. For example, simply having an appointment for every personal training session and knowing the trainer will call or email if the member don't show up provides an extremely successful motivation for engaging new members. However, very few of your members buy personal training, so more is required. Breakthroughs in Retention The most effective approach in retention is engaging new members in group exercise, because it instills a motivation similar to that of personal training: regularly scheduled classes where everyone feels obligated to attend. Further, connectivity occurs between those who dance together. Group exercise—or in its broader definition, dance—is one of the oldest human communal activities. There is reasonable evidence that human beings have been dancing for more than 10,000 years and in many societies, dancing is primarily a spiritual and emotional activity rather than one that bonds people together. In short, group participants in a strong group exercise program will remain members of your club twice as long as those which are in a fitness-only program. The next article in this series will help you understand your member's resistance to change, and how to deal with it.