GYMetrix - Blog - The link between increased Customer satisfaction and revenue growth

The link between increased Customer satisfaction and revenue growth

Following the last case study that we sent out, proving the link that exists between the service operators offer customers for 'Equipment Availability' and their satisfaction with the gym, as measured by their Net Promoter Scores (NPS), we received a number of enquiries as to what impact these increases in NPS had on revenue, if anything.

I got back in touch with Mark Tokeley from Renfrewshire Leisure and asked if he would mind sharing his revenue figures from The Lagoon - please see the Case Study - Higher Net Promoter Score Impact on Revenue Growth.

Once again we have been surprised! The revenue increases are massive. One of the advantages of NPS over other customer satisfaction metrics is that it has proven links with growth, and for Renfrewshire leisure this was most certainly the case, with revenue increasing from a stagnant base line by up to an extra £25,000 per month! That is an annualised increase in revenue for the gym of £300,000! And revenue growth is still rising!

'Equipment Availability' is a metric that simply does not exist in our industry as a measure of service that gyms provide their customers, and yet to use 'Available Equipment' is the primary reason customers are on the gym floor. It is their Primary Value driver, the primary method in how they access value from the gym. Pretty much everything else is a secondary value driver.

You could remove all the gym floor staff for a week and customers would still come, close the change rooms and showers for a week and customers would still come, remove the TVs and music for a week and customers would still come – remove the Equipment, make 'Equipment Availability' zero for a week, and no one would come. They would be unable to access their Primary source of value.

If an operator has too little of an equipment type to cater for customer demand 'Equipment Availability' falls and customers cannot access that equipment. When customers cannot access equipment of their choice, the value they receive from the gym drops sharply, as does their satisfaction, as does the likely hood they will recommend the gym to a friend and therefore organic growth will drop.

GYMetrix value proposition is now becoming quantifiable. Identifying and solving shortages in equipment not only creates happier customers but this translates to revenue growth.

Identifying where there is excess equipment, especially before refurbs, can save operators tens of thousands in not purchasing equipment that will not get used and not add value to customers.

Walking the tight rope of providing enough equipment that customers are not faced with poor equipment availability and loss of value, whilst simultaneously not providing too much equipment that does not add value to customers and causes a loss of value for the operator, requires accurate data on customer demand for equipment.

I hope you find the case study interesting.

If you would like to find out more about what GYMetrix system is now capable of, and the lessons we are learning, please get in touch, it would be a pleasure for me to come and present them to you.