Gyms, health clubs and fitness businesses: Should you be using Direct Debit?

Gyms and fitness businesses of all sizes are now using Direct Debit to collect membership fees.

Gyms and fitness businesses of all sizes are now using Direct Debit to collect membership fees.

Using Direct Debit lets you separate your financial relationship with your customers from the service you provide them, allowing you to focus on your business in three main ways:

  • Improving member retention by reducing payment failures
  • Letting you automatically increase fees when you need to
  • Reducing membership and payment admin

1. Direct Debit improves member retention by reducing payment failures

Many gyms let members pay using credit and debit cards. Roughly 3-5% of these payments fail each month due to cards expiring or being cancelled. This is a bad experience for your members, creates unnecessary work for them having to update their details and worst of all, if they forget, they may just choose to let their membership lapse. In contrast, Direct Debit payments use a customer’s bank details, which rarely expire or change.

2. Direct Debit lets you increase fees when you need to

Gyms may, from time to time, need to increase the cost of their memberships or gym members may want to upgrade or downgrade their memberships.

If you take payment by standing order, this can be difficult as members will need to cancel existing standing orders and set up new ones. This creates unnecessary work for your members and may lead to delays in payment or even members letting their membership lapse. Direct Debit, on the other hand, lets you change the amount you collect without needing any further authorisation from your members.

This flexibility also lets you charge members depending on a pay as you go basis without needing a new authorisation.

3. Direct Debit reduces membership and payment admin

Taking payments by cheque, cash and standing order can be a huge administrative burden. In contrast, Direct Debit payments can be completely automated. You can set up payments there and then on iPad or computer so members can get started right away.

What’s more, you’ll always know exactly what has and hasn’t been paid without checking your bank statement. You’ll also know as soon as a member has cancelled their Direct Debit so you have the option of contacting them about setting up an alternative payment method or to offer more affordable alternative memberships.

Before switching to Direct Debit with GoCardless, Crossfit Tonbridge found managing the payments process challenging. MD Alex Clarke explains:

“Submitting payments and constantly checking our bank statements took at least two days each month. With GoCardless and TeamUp, I spend just an hour a month managing payments. I always know exactly what's going on."

How do your members currently pay for their gym memberships, and which method do you most prefer? Do you think Direct Debit could help you? Share your story and continue the conversation on Twitter.

If you’d like to find out more, check out our guide to Direct Debit to find out if that might be the option for you.

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