What makes gym members renew (or cancel)
Last editedJan 20254 min read
In 2023, Australians spent up to AUD$3.5 billion on fitness clubs and gyms. It’s estimated one in five Australians have a membership. Even in the face of cost-of-living inflation, the sector continues to grow. For savvy gym owners, there’s a real opportunity to build a successful business.
That said, creating a resilient and profitable gym demands a juggling act: balancing everything from equipment maintenance to hygiene, cash flow and customer service. In this article we explore why people join gyms, what makes them renew their memberships; and how gym owners can optimise renewals and profit.
Why people join gyms
People seek out gym memberships for a variety of reasons from physical and mental health to social connection.
31% say they just want to generally improve their general fitness
31% go to lose weight
15% go for their mental wellbeing
14% go to build muscle
For others it’s a mix of social activity, rehabilitation, or specific sports training.
In terms of attendance, most gym members (46%) go to the gym between three and five days each week, 25% go once or twice a week, and 15% hit the gym five or six times per week (Australian Leisure Management).
What makes people renew (or cancel) their membership
Membership renewal rates range from 30 - 70%. Retaining a member is far more cost-effective than attracting a new one, so it’s worth taking the time to understand how members decide whether to stay or leave your gym.
Members are constantly assessing their membership, and they’re becoming more discerning. In 2024 Canstar Blue found:
22% don’t use their membership as much as they thought they would, down from 23% last year.
35% have tried more than one gym chain in an effort to find a place they really like, up from 33% last year.
In good news, 59% report feeling healthier for having a gym membership and regularly going to the gym, up from 50% last year. Surprisingly, the reasons people leave gyms don’t strictly align to whether or not they’re achieving their fitness goals.
8 key criteria impacting membership renewals
One study ranked eight criteria members consider when deciding whether to renew their membership or not. In order of priority, the criteria are:
Price (30%)
Interactions (20%)
Instructor qualifications (13%)
Equipment modernity and variety (13%)
Atmosphere (8%)
Cleaning (5%)
Accessibility (5%)
Staff qualifications (3%)
Together, price and interactions make up 50% of the decision criteria. Let’s take a look at how successful gyms optimise pricing and interactions.
Pricing
Over 1.9 million 25 to 34 year old Australians participated in fitness or gym activities in FY 2023, making them the most highly represented age group.
Australians pay an average of $63 per month on gym memberships ($756 per year). It’s a similar price to 2023’s average of $62 per month. 55 to 64 year olds spend the most on fitness ($70 per month) while those aged 18 to 24 pay the least ($55 per month).
Members look for deals that represent value, and consider the prestige and/or reputation of gyms, and the clientele they attract, in assessing value.
TIP: Layered pricing
Some gyms choose to offer layered pricing. This allows them to offer more economical pricing for members who might attend during off-peak times or access limited services.
TIP: Discounted annual rate
Many gyms offer a discounted rate for annual payments and a standard rate for monthly payments. Depending on your target audience, and their disposable income, it can be a successful approach.
Dishonour fees
Some gyms (or the payment platforms they use) charge a dishonour fee if automated payments are unsuccessful. Dishonour fees can range from $14.95 to $35 per dishonoured attempted payment. It’s a hefty fee considering the average $63 per month membership price. It could be over half the original payment.
Some gym owners aren’t aware the payment platforms they’re using are charging members fees. It’s a risky situation, considering the importance to members’ of both pricing and interactions. Members expect fair fees and transparent communication.
Both owners and members of Dukes Gym in Victoria had a surprise. “Customers that had transactions fail were hit with dishonour fees of up to $20,” says owner Jonathan Quieros. “Not only that, but we also didn’t have visibility into this and that made the whole experience terrible for customers. It also made us look unprofessional.”
"Dishonour fees can range from $14.95 to $35 per dishonoured payment. It’s a hefty fee considering the average $63 per month membership price. It could be over half the original payment."
Dishonour fees are an antiquated way of remedying unsuccessful payments, but collection is essential. More than a quarter of Aussie SMBs estimate losing up to $6,000 from late payments each year, with one in ten saying they lose between $12,000 to $30,000. Against the backdrop of a tough macroeconomic environment, 55% of SMB owners are concerned the number of late payments will rise in the next year.
TIP: Understand your payment platform
Ensure you’re aware of any fees payment platforms are charging your members. It’s a good idea to also understand what happens if you leave a payment platform - will you have to pay to get your own customer data back?
Interactions
You’ll know intuitively that when your team and members are getting along well, interactions are positive, and everyone’s feeling good. Positive interactions, including social, training and administrative conversations make all the difference.
When it comes to payments, interactions are equally, or potentially more, important. 42% of Aussie SMB leaders say they feel uncomfortable chasing customers for late payments, and 43% say avoiding conversations about money with customers has caused them increased stress.
“If you've offered a service and delivered, you should get paid,” says Jonathan, Dukes Gym. The challenge of following up members who’ve fallen behind in payments can be completely avoided by using a modern payments platform which intelligently takes payments when they’re most likely to be available, and re-tries if necessary without charging dishonour fees.
TIP: Automate payments to avoid awkward conversations
Find out more about how you can avoid dishonour fees for your members and your business.
A modern payments solution that works for members and owners
“We now only offer one payment option and that's fortnightly Direct Debit by GoCardless,” shares Jonathon. “The reason for that is GoCardless has full integration with our GymMaster member management platform so it makes payments a lot easier to manage.”
Payment requests are automatically generated in the CRM and sent to GoCardless for collection via a two-way integration.
“We don't need to log into GoCardless to actually see who's paid us and who's not,” said Jonathan. “They really make it so we can focus on the bigger things and not let these little things trip us up. It's really great to see both companies working together and they’ve allowed us to take our sign-up process completely online.”