Social Bonding and Tribal Affinity: A Solution to the Retention Challenge
by Will Phillips
November 2009
Proven successful retention:
- REX Roundtable member and IHRSA president Ben Emdin reported in the early 1990s that single members at his club stayed an average of 24 months; couples an average of 27, and families a full 32 months (numbers approximate).
- Family-focused clubs also have higher retention, higher membership fees, higher non-dues revenue and less competition from typical chains.
- Fitness-only members stay for an average of only 24 months while group fitness members last for 46 months reported by a REX member in Georgia.
- Similarly, tennis members outlast fitness-only members by years. Because of this low attrition rate, owners are willing to spend two or three times as much to recruit a tennis member.
What do these examples tell us? In addition to providing guidance on the most cost-effective members to recruit, the message is that social bonding as it occurs in couples, families, and group oriented activities increases member retention.
During the 1990s, many clubs differentiated themselves by lowering prices. This approach often backfires as the next new competitor goes even lower. In contrast, smart owners differentiate through social bonding and tribal affinity, which so far has often been only a by-product of club programming. Traditional retention efforts also focused on giving new members a successful start, at best adds a few weeks to the average length of membership. REX Roundtable owners of both single clubs and larger chains tested this model, and found that it showed little impact on membership retention. Most retention efforts fall into the trap of poor thinking. For example, it was found that in middle school tall boys wore longer pants, so if you want your child to grow, buy him longer pants? Hmmm! Members who stay longer, are more active in the first few months? So, get people more active in the first few months? It does not work. You confused correlation with cause.
Instead, consider the Yuba City Racquet Club, a multipurpose club in California owned by REX Roundtable member Pete Bakis. Business numbers are not on the top of Pete's mind, yet the club performs remarkably well. Why is this? The club made decisions based on care and attention to member's needs. He ran the club like a host, connecting and introducing members, and so creating affinity groups. Affinity groups or tribes are fancy names for a group of people connected together by a common interest or passion.
One specific strategy is to create group exercise classes, which can almost double your retention and provide higher referral rates. In particular, clubs with weak sales and marketing—the majority of single clubs—will find this an especially successful strategy. Suppose fifty percent of your members stayed twice as long. Can you compute the bottom line impact on revenue? Say that 1,000 members stay an extra 12 months at $45/month. That's 12,000 times your membership fee, or just over a half a million dollars in additional annual income, all largely due to social bonding. LMI, Zumba and BTS are excellent examples of the power of this approach. With less than 10% to 20% difference between what they offer and traditional clubs offer, this is an area that must be utilized.
Your New Job is to become an Expert in Social Bonding
Your club is naturally expert in fitness and physiology, something that might have been a competitive distinction in the 1970s or 1980s, but excellent facilities, solid equipment, and popular programming are standard operating procedure these days. Unfortunately, fitness knowledge and physiology is only a ticket to enter the industry, but no longer sufficient to succeed long term. Leaders today must focus on learning how to connect with their members, and even more importantly to help their members connect to one another. These connections or tribes are more familiar to you than you might think. After all, you are more than likely with the world's most famous tribe: Harley Davidson riders. Harley aficionados have a bond that advertises the product so effectively that the Harley Davidson organization spends very little on promoting their brand, and instead put their money into enabling their riders to promote the brand for them.
Connecting an Idea, to One Another, and to the Leader
Seth Godin's book, Tribes, does a good job at explaining the principles of building a tribe. According to Godin, a tribe is a group of people connected to three things: an idea, one another, and to the leader. A good example of this is the Grateful Dead, who created their tribe of fans some 40 years ago. The Grateful Dead only had one Top-40 album, so it wasn't their sales that made them world renown. Rather, they succeeded by supporting and leading their affinity group—the Deadheads—who then followed them all over the world.
Tribes are first about passion and belief in an idea. This passion and belief is also evident in the Arthritis Foundation sponsored marathons which have raised over $80 million in one year. People run in cause-related marathons because they believe in something. It might be their mother's five-year anniversary of surviving breast cancer, or brother who has leukemia, or even for their own health issues. One series of interviews with runners who had completed a cause-related marathon indicated that the runners didn't have time to exercise in general. However, they did have time to practice six months for a marathon in honor of their brother's death from diabetes.
What passions are held by some of your club members that could form a tribe? Can you identify any tribes in your club? What are they? These and the following questions in italics are based on Seth Godin's approach to building tribes, as well as your club's potential for creating and nurturing affinity groups. Grappling with these questions will get you and your management team thinking about building affinity groups at your club.
Here are some more concepts about affinity groups that will help you think these ideas through:
Tribes are No Longer Just Local Groups
The internet has eliminated geography and offers unprecedented access to groups that want to bond through social marketing websites like FaceBook and LinkedIn, Twitter, Flickr, Squidoo, Basecamp and so much more. In what ways could you use the power of the internet to build affinity groups for your club?
Crowds Versus Tribes
A crowd is a tribe without a leader, a tribe without communication. Most organizations don't understand this difference and spend their time and money marketing to crowds. Crowds are interesting and can create all kinds of market impact, but tribes are longer lasting and more effective for a long term success.
Factory-Styled Organizations Don't Encourage Social Connections
The traditional approach to running an organization, popularized over the last 200 years, is the factory model of producing goods and services. This model is extraordinarily efficient, but increasingly less profitable, although it does serve the natural human need for stability in that there are no surprises and no changes. Because of this, factories that produce commodities are also easy to relocate into a different country, resource, or close. We saw this when Ford laid off 20,000 workers.
In the health club industry, low cost, low service clubs are like factories because their main strategy is efficiency. How much of a factory is your club? Several mid and high end clubs in REX Roundtables report that they had no fitness floor staffing on Sunday afternoons and many evenings after 8 PM. In other words they were mimicking low-service clubs during those times. When they then reduced staffing at peak hours, only a handful of members even noticed. This approach is similar to a factory approach: easy to compete with and high attrition.
Tribe Building Principle #1: A Passionate, Shared Interest
A shared interest is the foundation of a tribe. Godin points out that a leader can increase the effectiveness of the tribe and its members by transforming this shared interest into a passionate goal and a desire for change. Nick's Pizza and Pub has a simple but very effective manifesto: Our Dedicated Family Provides This Community an unforgettable Place; to Connect with your Family and Friends, to Have Fun and to Feel at Home. When REX Roundtables held a workshop at the pub, Nick and his partner Chris explained how their manifesto results in people lining up to work for them, and patrons regularly driving forty-five minutes to eat there.
What is your club's manifesto? How can you make it easy for your ideas to spread far and wide? A manifesto isn't a mission statement, but something designed for the tribe. It speaks to the heart, and doesn't need to be printed or even written down. CrossFit.com has done this with in the fitness area, creating a worldwide tribe passionately committed to fitness. Their website posts fitness challenges and hundreds of people post information on their own goals. Its worthwhile visiting their website and reading their manifesto: What Is Cross Fit?
Tribe Building Principle #2: Communicate Up, Down, and Sideways
There are four different types of communication that help build a tribe.
- Leader to tribe: Make it easy for your followers to connect with you. It could be as simple as visiting, emailing, or watching you on a DVD.
- Tribe to leader: Listen to the needs of the group and keep the flow of information open and upward. Tom Peters started this concept in the 1980's with what he called management by walking around.
- Tribe member to tribe member: Make it easy for your followers to connect with one another, and you'll build the kind of familiarity we see when a regular guest at a restaurant nods to another guest that they see often.
- Tribe member to outsider: Provide tools so that people in the tribe can spread the word and gain new members such as providing informative e-mails that they can forward to friends, free visit passes, and so on.
The leader's job is to provide tools to strengthen these four areas of communication. What can you do to enhance, deepen and accelerate each of the four communication channels in your club? The National Rifle Association is effective in all four areas, and has had an impact on the political and legislative culture of the United States far in excess of its size. Godin explains that their success has to do with the tribe being extraordinarily passionate, well-connected, and able to communicate up, down and sideways.
Tribe Building Principle #3: Tighter Versus Bigger
Leaders of most organizations put their emphasis on growing bigger, but this approach in itself does not create tribes. Instead the goal is to make the company tighter, meaning that communication flows more quickly, with more information, to more people. A tight tribe which is closely connected can also better hear its leader. The opposite is also true: the leader will be able to better hear the members, and coordinate the group's action and ideas.
Effective leaders also provide people with stories they can tell themselves about what they're doing, stories about the future and change and hope. This is because people most believe what their friends tell them and of course they always believe what they tell themselves; both concepts which are exemplified in social marketing websites like FaceBook which encourage members to make recommendations to one another. The goal is to encourage your customers to tell your story to one another. Steve Jobs of Apple Computers does an excellent job of doing this. Within hours of a new product announcement, word spreads online to tens of millions of users. So the strategy is the reverse just trying to grow bigger, because that can prevent growing tighter. When the tribe grows, it doesn't do it for the organization, but rather for each other because they want to. Ultimately tight communication also creates organizational growth; but the important thing is to start with building groups, and grow from there instead of the reverse.
How could you build tighter communication in each of these the four main areas: leader to tribe, tribe to leader, tribe member to tribe member, and tribe member to outsider? For example, could you develop an online social network forum to build a tribe of Younger Next Year members, a group committed to losing weight, or parents of autistic children? These are all groups that are building and growing in clubs today.
Tribe Building Principle #4: Exclude Outsiders
Who is part of your tribe is almost as important as who is not a part. In contrast to an election which only needs a majority of the votes for one side to win, a tribe requires close to 100% commitment by its members. It's your job as a leader to motivate them to join the tribe, as well as allow the rest of the population to move on. In other words, not everyone is going to be a Harley rider, a Starbucks aficionado or a Southwest Airlines fanatic. Find the people who want to commit to what you have to offer, focus your time and money on them, and forget the rest.
Because tribes are increasingly voluntary, effective leaders avoid making their marketing message too broad simply in order to make the tribe larger. Some tribes work better when they're bigger such as the tribe of people who use Twitter. In contrast, other tribes work more successfully when they're smaller, such as a REXRoundtables. You can create growth by creating a tribe that is not like other people, a tribe that makes your members feel special.
Tribe Building Principle #5: Your Club can be an Umbrella to a Hundred Tribes
The Appalachian Mountain Club (AMC) in Boston nurtures dozens of tribes including: canoeing, easy hiking, winter hiking, snowshoeing, kayaking, bird watching and more. Each tribe is led by a volunteer champion who organized the group and training, as well as social events. The AMC is over 130 years old, and has 90,000 paying members in twelve chapters from Maine to Washington D.C. More importantly, they have 20,000 volunteers and use no particular technology to grow their affinity groups. Each one has resulted from individuals who are passionate about one particular thing, and was encouraged and enabled by the club.
How to Make Money on a Social Site
Most social sites have not figured out how to make money except by using advertisers, but gamemaker Zynga has solved this problem. After two years their revenues are $100 million annually with some 70 million unique visits a month. Their games (FarmVille, Mafia Wars and Cafe?) are accessed through sites like Facebook and MySpace. The fifty million players on FarmVille can farm only by buying tractors ($20 real money), seed and land. Most interesting is the gamer's ability to monitor the play and use that data to extend the levels of play. This quality of ever increasing challenge is one of the key factors in the flow experience: the highly satisfying state where humans exhibit the greatest level of engagement and retention. For more see Fortune November 9, 2009 page 43.
Next steps you can take: Play the games and imagine how you can bring games to your club and website. When playing, notice what creates engagement in you and transfer it to your members. And just a note: group exercise, tennis and golf all have the same underlying flow principles in action. Google The Flow Experience for more information.
Your To Do List:
- Review the questions from this article and write down your answers for each one. Then meet with your management team to work on their responses, and plan your next steps. They are:
- What passions are held by some of your club members that could form a tribe?
- Can you identify any tribes in your club? What are they?
- In what ways could you use the power of the internet to build affinity groups for your club?
- How much of a factory is your club?
- What is your club's manifesto?
- What can you do to enhance, deepen and accelerate each of the four communication channels in your club? Leader to tribe, tribe to leader, tribe member to tribe member, and tribe member to outsider
- How could you build tighter communication in each of these the four main areas: leader to tribe, tribe to leader, tribe member to tribe member, and tribe member to outsider?
- Three books to read:
- Email your ideas and thoughts to Will Phillips at Will@RexRoundtables.com, and share them at your next REXRoundtable meeting!
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