5.2.2 Models and Churn

For this activity:

You will need The Internet and to write down your answers in your Mahara e-portfolio.

You have learnt from this theme that a disadvantage of the subscription business model is “churn.” Churn refers to the number of subscribers that a subscription-based business loses each month.

A gym in the suburbs of a major city has an average of 7,000 members. Each month, some 5-8 per cent of members fail to renew. 

How might a business like this reduce its churn and see sustained growth over a period of time?

Task:

The owners of the gym have asked you what they can do to identify potential problems and reasons for non-renewal. They need a strategy to reduce the non-renewal rates or find new customers or both.

Write a short report advising the owners on the how subscription-based businesses can reduce churn and see sustained growth over a period of time. 

Your suggestions can be gym-related or you can speak generally about how subscription-based businesses overcome this common issue.

To complete this task, research the topic on the internet before giving your advice, as you must support your advice with facts. You should make sure that you use at least three sources when checking that a fact is correct. You should try and limit your sources to reputable websites such as news websites or sites that are maintained by well-known and respected organisations.