Are Gym Members defaulting on their payments with you an ever present issue? According to statistics, only half of your gym members will actually turn up on a weekly basis. This gives those clients who fit within the inactive bracket the feeling that it is their right to default on payments. They may think, well I’m not going so I don’t need to pay. And then, what about the clients who are active members, but still don’t pay their bills?
There is a whole host of variables that could cause a client to default on their payments. Are they unsatisfied with your services, is this just a one-off mistake, can they simply not afford it in the long run? Here are a few tips on how to stop clients defaulting.
ESTABLISH AN AUTOMATED GYM SOFTWARE
Putting your members onto a direct debit system as soon as they start using your facilities, is perhaps one of the best ways to ensure that you will actually get paid. I mean, it works perfectly, doesn’t it? You don’t need to invoice every fortnight asking for a payment, you won’t need to scan your accounts to see if reference numbers match accounts. In fact, I’m sure that as a gym owner, a direct debit system was as necessary an investment as a treadmill. So it’s all up and running, and don’t get me wrong, the majority of your members are honest, paying clients. Astoundingly, across Australia, gyms have reported that 13% of their members still default as each payment cycle comes around.
NOTICE THE WARNING SIGNS
Some financial patterns that could be a warning sign that a client is highly likely to default on their payments. Fortunately, there are some red flags and financials patterns that can warn you when a client is likely to default on a payment. Consistently late payments, several missed weeks and radio silence are a few common signs. Warning signs can help you anticipate any trouble and take appropriate action if needed.
HAVE A COLLECTION PARTNER
Engaging with a third party collection agency means you will spend less time chasing payments while keeping those all-important relationships intact. No one likes asking for money. No one likes being asked. So keep the awkwardness to a minimum and outsource this task to the experts.
CREATE A MOBILE GYM APP FOR ALL YOUR USERS
Allowing your members to have control over their account is a good way to put the power back in their hands. Having a bespoke mobile app which is unique to your gym and to your users can allow your members to track their account. From here you can notify your members of when a payment is coming up. If they have the money available, they can pay their account early, if not then they can make sure that it is available.
Instead of approving a client on the spot, it is worth checking their credit score. This will help you make the instant decision as to whether they will pay or whether they are going to be a pain. Reserve your right to turn people away who are not suited to your business. Prevention is the best form of cure.