OK, I admit it, the title ‘Marketing or retention’ is a little clickbaity and most people running a martial arts club will probably have realised that they need great marketing AND retention to grow efficiently. That said, what I see out there in the wild is often a different story.
If I asked you when you last did any marketing, you would probably be able to rattle off dates that you ran specific campaigns (or at least ads), tweaked your website or nudged your current members to refer new members. If I asked you ‘What was the last element of your club you reviewed and changed to improve retention?’, would you be able to answer the question with the same level of confidence?
I am hoping that in this community we will have at least some coaches that could answer the last question, but I would understand if many can’t. The majority of services provided by the leaders in our industry seem pretty focused on the marketing side of what we do, to the point that it’s hard to find people trying to help you improve your core product. We obviously need marketing skills to get new students through the door but we also need to keep them once they are in.
By improving your service I don’t mean giving them more ‘stuff’ such as stickers, trophies, certificates or selling them add on services they don’t need and if asked directly, don’t really want. I am mainly talking about the quality of your curriculum and your coaching. While there are tweaks you can implement to improve your retention from an admin point of view, if your curriculum and coaching are poor, it’s like putting lipstick on a pig.
Is the focus on marketing justified?
I am not a diehard old school martial artist that thinks you are selling out if you run a thriving club that happens to market on a regular basis. I just want to suggest that the attention marketing seems to get in our industry is sometimes to the detriment of the development of our core service (delivering martial arts programmes). In fact, the number of times that I hear ‘You know great coaching, you just need great marketing now too’ is scary.
Many of you will have heard the saying that it costs 5 times as much to obtain a new customer as it does to retain an old one. The Havard Business Review looked at several different studies and found that acquiring a new customer generally costs between 5 and 25 times as much as keeping an old one. With this in mind, the effects of increasing your retention by even a couple of a percent could be huge.
After recent changes in the digital ad world, the cost of acquiring a new customer has started to increase and I can only see future changes going one way. This will make great retention the focus of most membership based businesses, including martial arts clubs.
If you deliver a great service to your students (and their parents), and you retain a larger percentage, this also means that you will spend less time on the marketing hamster wheel. As well as knowing you are making a difference in the lives of the students you serve, having great retention can also have some other attractive side effects too.
In an article from Forbs, ‘Provide jaw-dropping customer service’ was listed as the top way to obtain referrals from your current customers. In contrast, rather than over delivering on the service clubs provide, too often I see the advice given by the leaders in our field as ‘done is better than perfect’. While I agree we need to complete version 1 of our service before we can gather feedback before moving on to version 2, what i see on a regular basis is martial arts coaches producing version 1 and never revising the product/service again.
I understand that we need to put time aside to market our product/service but when it comes to the marketing or retention discussion, I feel we don’t spend enough time refining our offering to the world.
We are surrounded by unremarkable products and services. For the most part, they are commoditised and forgettable. We all want to feel like our martial arts club is special and not like every other club in our town or city. It’s hard to deliver a ‘special’ service if we are focused on being just good enough.
If you don’t believe your martial arts club is special, nobody else will. If you have forgotten what makes your club special, take a look at the IKIGAI graphic and make sure you are meeting your ‘Reason for being’.
Why is retention often the ugly sister to marketing?
The question I often pose myself is ‘If providing a great service not only helps you retain customers but also helps create more loyal customers, why isn’t everyone spending more time on this?’. I suspect it’s because it takes a sustained effort over time to produce results and as Nobel winner Daniel Kahneman suggested in his hit book ‘Thinking, fast and slow’ (great book but very dry read), humans will often take the path of least resistance when it comes to decision making. It is much quicker to throw up an ad and get more people through the door than it is to work out where your club is falling down in terms of retaining members.
Besides human nature, what else develops our bias towards marketing?
The likelihood is that if you have been coached by the same martial arts instructor for a fairly long period of time, you will probably take on many of their methods as your own. This can be a good or bad thing depending on the quality of your instructor but if this can happen in martial arts coaching, it can also happen in business coaching.
As marketing is now often the martial arts business coaches tool of choice, it’s easy to see why they think every barrier to growth, is a nail that needs hammering. In fact, over the last few years, you may have noticed this trend propagating in the UK. When martial arts instructors have been on the receiving end of business coaching, they sometimes go on to coach others using similar methods (usually with a slight tweak). This phenomenon is not unique to martial arts and I have seen the same thing in education. I even recognise my own bias towards motivational and behaviour theory, though I do my best to represent different points of view in my articles.
We are lucky in the UK to have a growing number of business coaches that are great at marketing. Though the US has led the way in this field for many decades, I feel that over the last 5 years we have really started to catch up. These individuals provide the important service of helping you understand how to get new members through the door.
I won’t play down how important good marketing is for the sustainability of your club but this is only one side of the equation. I often see the importance of ‘Customer lifetime value’ highlighted but then follows a pivot towards marketing. I am sure I am not the only one to work out that growth is as dependent on keeping your members as it is getting new ones through the door.
So how do you know if you have a marketing or retention problem?
This week I just finished reading a great (but very geeky) book called ‘Seeing what others don’t’ by a psychologist called Gary Klein. In the book, Klein delves into how people discover insights that provide novel solutions to common and uncommon problems. While we can always try solutions that others have used in the past to help grow, I fear this is still potentially using a hammer to fix a problem that may need a screwdriver. The secret is to try and discover insights that are specific to your club and you’re particular limitations to growth.
My suggestion is to examine your numbers and see to see if you have a marketing or retention problem. While high/low dropout can have many contributing influences, I do want to give you some ranges that may give you an idea of where to start looking to fix any growth issues you may be experiencing. The figures I am about to give to you are from some of the larger organisations that process student licenses/membership/insurances for other clubs.
A monthly dropout of 9% plus is considered above average and your priority should be to look at improving your retention. If your monthly dropout is between 6-8%, you may need to tweak both your marketing and/or retention to grow. If your monthly dropout is 4-5%, your retention is great and you should look at improving your marketing. A monthly drop out of 3% and below is very good and if you are not growing, adding even a little more effort to your marketing campaigns should see you grow quite easily. Please use these figures as a ‘rule of thumb’ and don’t think of them carved in stone. In the future, I hope to get more specific data during my Doctoral studies but for the moment, these figures will have to suffice.
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Just so you know I am walking the walk and not just talking the talk, in 2021 our monthly dropout averaged out at 2.64% per month. The 2-3 years previous to that our monthly dropout averaged out between 3 and 3.5% per month. I am not cherry picking these figures and this includes all our programmes (including the once a week students) from both of our venues. We all know at least one martial arts club owner, that when talking about numbers always seems to get 100 new members per month and only loses one or two students over the same time period. The surprising part is that they have usually been in business for a couple of decades and have never outgrowth their current venue. My conclusion for these clubs is that they either teach classes from a tardis or they are not being straight with you.
What is my own target? If I can keep my monthly dropout to between 2-3% per month, I will be very happy. Just to give balance our own figures, I know some clubs that have hundreds of members that have a monthly dropout percentage in their teens and I also know a few clubs (very few) that have monthly dropout rates of under 2%. The one thing the clubs with great retention have is that they constantly deliver great classes.
Over the course of this article, I hope I have done a reasonable job of helping you understand that once we are up and running, great retention is at least as important as good marketing. The main reason I am so passionate about retention (beside motivational theory/research being my hammer) is that I see it as a barometer for how well we are delivering results for our members. In simple terms, if your students voluntarily keep turning up week on week, month on month, year on year, you must be doing something right. We all lose students but if you want to grow your clubs, the game is to lose less than you gain each month. If you want advise on marketing, there are plenty of great business coaches out there to help you. If you want help improving your martial arts retention and you are willing to play the long game, this is where i think Project MAPLE can offer something a little different.