Case Study: How Points Based Rewards Programs Can Affect Revenue and Retention in Health Clubs

Points Based Rewards Programs are becoming more frequently used by top retailers. How do these programs influence overall Revenue and client Retention. A case study using perkville rewards at elements fitness clubs.

Boston, MA, July 21, 2013 --( To thrive in the competitive health and fitness industry, club operators must
focus on what differentiates their club from their peers. “The gyms and centers that do best are the ones that know who they are and do not try to be all things to all people. Most importantly, they truly focus on customer service and on making sure that they deliver an environment and services that will help their members meet their wellness goals,” said Meredith Poppler, VP of Industry Growth at IHRSA in May 2012 of South Source.

Points based membership rewards programs, such as Perkville, provide businesses with a competitive advantage -- giving businesses a platform to drive lifestyle changes by providing gamification tools to boost retention, referrals, and social media.

Perkville enables businesses to address the real long-term challenge of
converting the public’s sedentary status into active lifestyle habits. Many forward-looking fitness centers have already adopted Perkville’s gamification features, helping their clients achieve their fitness goals and in the process, improving engagement and retention. This paper will focus on how a forward-thinking health club brand, elements fitness for women, uses points-based membership rewards to drive revenue and retention.

“Lets face it… it’s all about the member experience in a club. If members love it, they stay – if they don’t… they leave. Perkville has really helped elements® measurably increased member engagement, which in turn has increased retention,” says Chris Palumbo, Brand Director, elements®fitness for women.

Gyms have the ability to log into Perkville and customize their reward program to reward class attendance, personal training sessions, and more. The reward program can be updated at any time to accommodate new behaviors, classes or services that the staff determine they would like to incentivized. Staff can easily modify the list of point-generating activities in just a few clicks.

Redeemable rewards are viewed as tangible tokens of achievement in the fitness game. While nothing can substitute for a great workout, redeemable rewards are motivational factors and help retain clients. For many clients, rewards provide a goal they can strive to achieve. Based on our discussions with gyms using Perkville, we recommend a 40 to 1 ratio where 40 works outs or activities equate to a retail, service, or discount reward.

elements®fitness, an upscale fitness franchise for women, demonstrates how a reward program can improve retention system-wide. elements®fitness centers are a 8,000+sq foot clubs with over 1,000 active members and extensive databases of potential members (non-members). They see 300-400 check-ins per day on average. elements® set up their reward program to reward clients for “positive usage behavious,” such as checking into the gym as well as attending classes, using personal training, and diet coaching sessions. elements® found that members participating in the rewards program sign up for nearly twice the classes on average than members that do not participate. Since implementing Perkville, monthly retention rates have also improved.

“We have to be mindful of the ‘good’ member behaviors that can really affect
a clubs bottom line… participating in activities, referring friends, using profit
centers, checking in on Facebook… with our rewards program we have a way to incentivize members to engage in activities which make our clubs more profitable,” said Chris Palumbo, brand director at elements® fitness.

To make accurate comparisons when reviewing retention, elements® fitness compares clusters of members for a 12 month period. “We found it most helpful to compare September 2011 membership with September 2012 membership in our yearly membership plan,” said Palumbo.

“Perkville has created a buzz in our clubs as well as on social media and has helped us perform better in comparison to last year. Our annual memberships grew by 6.6% this past September (2012) compared to 3.0% in September 2011. We saw an improved trend in October as well, and November is looking good too. I get really excited by annual membership growth,” says Palumbo.
Christopher Palumbo