Methods to reducing membership cancellation – DSP 46

Everything about how to keep your members. Or… get rid of your members? Graham and Ashkahn share their personal philosophy around the membership program at Float On and how they retain their members.

FTS Blog – Happy Tanksgiving (Giving Gifts to Monthly Members)

FTS Blog – Float Memberships and Packages

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Transcription of this episode… (in case you prefer reading)

Graham: How do you stop your member’s from canceling their memberships?

Ashkahn: That’s a good question.

Graham: So first of all, we can’t. It’s a universal problem right there, and one that I think you just get better at over time but you’re never going to have 100% retention. It’s just a difficult nut to crack, to be honest.

Ashkahn: Yeah, memberships are important and it is tough to keep people. I find blackmail to be an effective act. We record what they say in their float and then we use it against them.

Graham: Snap all those ‘nudies of them when they’re in the room, yeah.

Ashkahn: Yeah, that’s right.

Graham: “You really want these coming out?”

Ashkahn: And then they can’t leave.

Graham: “It would be a shame if someone were to cancel their membership there.”

Ashkahn: Yeah, so I guess there’s other gentler tactics as well. I mean, some people have literally, like, contracts that they never read, that don’t allow you to cancel your membership.

Graham: For a certain amount of time, right? So I guess what this problem is addressing, is that there is a relatively high membership churn in the float industry.

Graham: We at Float On, don’t have a contractual minimum number of months. So people can just have a membership for one month and then cancel after that single month. What Ashkahn was saying, yes, some people actually have contracts that are more, like, three or six months that they kind of lock people into things. No judgment either way, we just made our choices for how to run things and either one of those can be successful.

Ashkahn: Yeah, the tricky thing about talking about memberships is that there is so much variety in what a membership is. Kind of a base structure of your membership changes all these conversations about contracts, or length of time, or what your attention is, or how many members you have. Those are very fundamentally different questions and of different value depending on what your membership structure is.

Some people have a membership structure where … if you float more than once every six months or something it makes sense to have a membership. Kind of like, “Hey, you’re getting a slight discount as a member, but it will make your first float cheaper” whatever, you know, some sort of system like that. Other people have memberships that are way more significant. You don’t have a membership unless you are seriously floating on a normal basis as part of your weekly routine or something.

Graham: Which is kind of more our side. So our base level membership starts at two floats a month. We don’t even have a one float a month option. Already, that barrier to entry to get a membership at Float On, specifically, is pretty high.

Ashkahn: That might change this question, you might not be as concerned about members leaving if your membership is really just a great way to convince people to float two or three times instead of once. For us, our members are kind of our most serious floaters. They’re our best customers, the people who actually do generally come in over and over again and we see on a frequent basis. So, when we lose members, it hurts a lot more. We’re like, “Oh, no, those are our members!”

And we have, probably, a lot less members than you would with a different membership structure. The ease of entry is a lot lower.

Graham: Yeah. I think, just for the record, our membership numbers as of right around now when I was checking them was around 95. That’s kind of where we are at right now. It’s sort of hovered around that 100 point pretty historically, sometimes below and sometimes above. That’s anywhere from two floats a month to eight floats a month. We have about 20 yearly members who buy a giant bulk package of 52 floats all at once. Just a little background for our own structure there.

So, one big thing is what’s the price difference between your base level floats and membership floats. If we’re looking at reasons why members ultimately leave, maybe it’s that they’re not actually saving that much money or don’t feel like its worth that bargain for them.

Ashkahn: Yeah, I think members leave often because they just start stacking up floats on their account that they’re not quite using.

Graham: That’s that float on, at least. That’s definitely the number one reason that people either pause or cancel their membership.

Ashkahn: Right. We used to have people’s floats expire, as a way of deterring that kind of behavior. Your floats would roll over for one month and then they’d expire because we didn’t want that stacking up thing to happen, but it didn’t really work. People would contact us, they’d be like, “Hey, my floats are about to expire” and we’re like “Oh we’ll extend them for you.” We were never really enforcing it and if anyone asked at all we’d extend their floats. We just felt bad having these things they paid for expire on them. We ended up just instead of having a mean policy and constantly being nice about it, just having a nice policy.

Graham: Yeah, also note here that we actively go through every month and call/email people who aren’t using floats.

Ashkahn: So, if people are accumulating floats or they haven’t been in at, I’ll say, a max of two months, they’re for sure getting contacted by Float On, being like, “Hey did you still want to keep the membership? Do you want to use these floats that you’ve been collecting?”

Some people, their memberships … and this is kind of more like the gym model, I guess, where you’ve got a bunch of members and then that’s it. It’s sort of their responsibility to keep track of their own life and make sure to responsibly cancel that if they’re not going to be using them.

What we found was that our policy just ended up being really nice. People would call us after 5 months of not using their floats and they’re like, “Hey I haven’t used these in 5 months, can I get a refund, on like all 5 months worth of memberships?”

Graham: And we’d be like “Yeah, you totally can.”

That would suck because we had a lot of money coming out of our bank account all at once. That’s when we decided that we didn’t want people keeping things just on the passive basis anyway, it just felt not quite like how we wanted to run Float On. We were actively now calling them to make sure that they aren’t continuing down that path.

In a sense, we set the bar high for ourselves, for not having memberships cancel. If you’re not using it, we will actively make sure that you don’t want to cancel it. We’re almost encouraging people to cancel their memberships that are on the list.

Ashkahn: Yeah. Even our yearly members, who are using their floats, we’ll still call them before their thing renews, because it’s a huge chunk of change to come out. It happens once a year, so we’ll, like, before they get charged call and make sure, like, “Hey we just want you to know this is coming up in a month. Do you want it to renew? Do you want us to turn it off?” It just seems like an insane thing to pop up on your credit card out of nowhere.

Graham: This turned into an episode of how to get your members to cancel.

Don’t have any contractual length. Actively call to check in, to make sure they want to keep going with the membership, and cancel them if they don’t.

Ashkahn: Alright, so what do we do to not have our members cancel?

One thing is we try to make it just seem like being a member of Float On is awesome. Right? We’ll buy surprise gifts for our members, every few months we some sort of member giveaway. The last one we did we made these nice metal water bottles that had our logo on them that we gave for free to all of our members.

Graham: For World Water Day.

Ashkahn: We made them a shirt around Thanksgiving, like, a Tanksgiving shirt … had a bunch of Fall kind of gourds, like pumpkins and squashes and stuff that were shaped to look like float tanks.

Graham: Which is cool. Yeah, free floats and things like that. That even starts when they first get their membership.

Ashkahn: Yeah.

Graham: So they get a membership … And none of this is advertised by the way, we don’t say, “Hey, we’re gonna be giving out gifts”, so every time it happens it’s a surprise.

The first thing they get is a pair of color therapy glasses and a miracle fruit pill. That’s just kind of their initial surprise sign up bonus. “Hey, here’s some extra presents now that you’re a member with us.” So it starts early.

Ashkahn: Yeah we give them free Kombucha that we have at our lobbies, so when then come out of their floats they’re kind of like VIP membership, they can just go up and drink as much Kombucha as they want. This is … I don’t know, it’s always been kind of my thought on good ways to keep people in. Just to make it such a great experience that, like, why would you want to leave.

In my ideal world … we’ve never really gotten to this point, and maybe we can work on this project at some point but-

Graham: Great, another project.

Ashkahn: In my ideal world, that’s almost more like a secret society or something, you signed up for a membership and you go home, and like, sitting on your doorstep is, like, a black package and you open it up and you have this solid, nice Float On membership card. I don’t know why you’d need a card for anything, but at least you have one so you feel awesome.

Graham: With a note that says, “You can never leave”

Ashkahn: Yeah. Yeah, there’s, like, a cape in there and maybe other things. It just feels like all of a sudden now you’re a part of this awesome thing. We’ve been testing this with giving people gifts and stuff like that but I have a suspicion that if you do even spend money or do that upfront effort, that people are gonna not want to cancel one month later. That they’re gonna be like, “Aww, man, I signed up and I got all this stuff” and it’s just going to make it a harder thing to frivolously cancel your membership.

Graham: Yeah, social guilt is a real thing. You should abuse it for your own benefit whenever possible.

Ashkahn: That’s right.

Graham: Yeah. Even what you’re saying right now feels like kind of a contrasted philosophy to the idea of putting in contractual lengths that you need to keep your membership for. Letting people sign up for memberships and then just accumulate floats and not reaching out to them. I guess on the logistical side of, here’s our exact policy and our rules, we try to be really lax and we don’t really use those to boost up our memberships. Instead, we go for what Ashkahn is talking about, which is this more boosting up the overall quality to get people to stay on board and allowing our policies to stay as lax as possible.

Another thing we’ll do is we’ll have members invite events as well. We used to do Meet Up, occasionally we’ll have things at our shop or even invite our members out for drinks, whether that’s one on one or with groups of other members, things like that. Definitely, personally, from inviting out members, especially our most regular members, to go grab a cup of coffee or a beer or whatever it is … just kind of hang out and chat, pick their brain about what could be better. That’s been an awesome experience for our members. I think that some of those people who have kind of been in that one on one, hanging out with an owner of Float On, they’re grabbing you coffee, you’re saying what you would want changed about the float center. Those members have stayed on for a fairly long time, I think, because they do feel like they have that bond with your business.

Graham: Getting to know your members and actually hanging out with them outside of your shop can be a really solid way to improve that life span as well.

Ashkahn: Yeah. Seriously, though the blackmail thing is really effective. I think you should consider it.

Graham: So there’s a few ideas. If you’re having trouble keeping your membership numbers high … again especially if it’s your numbers of active members who are using the floats that they’re accumulating, you’re not alone. This is not the easiest industry to have members who just come on board and they’re going to stay there for several years.

Graham: Ashkahn and I were talking about this recently. It’s something that’s for you, it’s not for other people. It’s an event that … a lot of people get memberships to maybe a rock climbing gym, or a regular gym, and part of them going there is that they also get to socialize and meet new people. It’s probably not the case in an isolation tank, right? The social element is sort of removed.

Ashkahn: Yeah, it’s time consuming too. You’ve got to take a good chunk out of your day, out of your week to come do it.

Graham: Yeah, even longer than going to the gym for a session or something like that.

Ashkahn: Right.

Graham: So we kind of have … Self-care that takes a long time, it’s not a social activity.

Ashkahn: It’s kind of expensive too. A membership for a float center is more expensive than a gym membership or something of the like.

Graham: We have a lot of things working against us, I guess. In that the basic premise of floating itself is not something that encourages people to hang around for an incredibly long time. Yeah, you’re not alone, it is a challenge. At Float On, at least, we always double down on quality, and just trying to make both the experience in our tanks and the awesomeness of being a member as salient as possible so the people are just less likely to quit because of the extreme amount of value they’re getting.

Ashkahn: Yeah. Alright, well I think that about wraps that up.

Graham: As always, if you have your own questions, your own salty … Is there another word for questions that starts with S? I was going for an alliteration thing there and I couldn’t think of one.

Ashkahn: Suggestions, for questions?

Graham: Anyway, go to Floattanksolutions.com/podcast and leave your ideas and concerns there.

Ashkahn: Alright, we will see you tomorrow.

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