According to a study by Bain & Company, along with Professor Earl Sasser of Harvard Business School, increasing customer retention rates by 5% can increase profits by 25% to 95%.
That’s due in part to the high cost of acquiring new customers, as well as their tendency to spend more on services later on in the relationship.
It goes without saying that in the coworking space industry, like in all industries, it’s a lot easier to keep a member than it is to acquire a new one, so once you do have someone through your door, it’s crucial to treat them like gold.
However, since excellent customer service is an expectation, not a differentiator, there is more you can (and should do). Here are some ways you can increase retention and profitability.
1. Start with better positioning
It may sound counter-intuitive to improve your member retention rates by focusing on your upfront positioning, but it’s actually one of the most important ways to increase retention.
If your coworking space aims to attract “anyone who will give you money”, you’re more likely to have a high churn rate.
The reason is that your workspace couldn’t possibly be “for everyone”. Inevitably, if people do show up, some will love the space and some won’t. You’ll start to see a common trend around who stays and who leaves.
Focus your messaging on the types of people who become long-term members.
Make your workspace highly tailored to these people, since they’re already identifying with your core service model.
When you focus on a specific group (the type of members who love your workspace already), your website copy becomes far more clear and resonates with that group. Your workspace will “feel like the right choice” because “people like me choose a workspace like this”.
As a result, you’ll have higher conversion rates (booked tours, membership purchases) and people will stay longer because they’re in a community of their peers, instead of a completely random mix of people from all walks of business.
By claiming a stake in the sand around who your workspace is for, you’ll develop what Seth Godin calls the tribe-factor.
2. Create an onboarding process that works
If you’re like many coworking spaces, your onboarding process goes something like this:
- A prospective member does a tour of your space.
- They like the space, sign an agreement.
- You send them a welcome email or printed package.
- You’re available for questions or concerns if needed.
- They’re now fully onboarded.
The are a few problems with this approach.
Problem #1: They don’t read the whole package.
Your onboarding package is full of great info, but they don’t read it. It collects virtual dust in their inbox or actual dust in their desk drawer.
This is a missed opportunity for you to communicate to your members how to get the best use out of working at your space. You know that if they read it and made use of all the cool features and benefits you’ve created, they would be excited about staying a member at your space.
Solution: Drip out content by email over the course of their first week or month. By doing this, they get to digest all of the benefits slowly, making them less likely to be ignored. You can also do personalized check-ins during the first few weeks to see if they have used certain amenities or joined your online community. Spoon feed the good stuff.
Problem #2: They still feel like outsiders.
Do you remember your first day in high school or summer camp? Maybe you already had friends, maybe you didn’t. If you didn’t, there’s a good chance you felt nervous.
It’s the same thing when you’re a new member at a coworking space. You feel like an outsider, you don’t know anyone, and you’re a little bit apprehensive of your surroundings.
Solution: Have your community manager make friends with the new member. Have them check in often during the first week or two. Introduce them to other members. If they are comfortable with it, send out a notice to the community that a new member has arrived, and encourage them to say hi to the newbie.
3. Email members frequently
I see a lot of coworking spaces that don’t want to send emails to their members.
Sometimes they don’t know what to say, but more often they don’t want to bother their members. This is a completely reasonable concern if you’re planning to send self-promotional emails, but if you’re 100% focused on what you can give to your members, this shouldn’t be a worry.
Your communications should make members the star of the show. Using “you” language as much as possible can really help.
Examples of things you can send regularly include:
- New blog content, written specifically for your current members.
- Personal introductions and offer to make connections.
- Member spotlights (content for your blog with featured member interviews).
- Reminders about using key amenities and member benefits.
- Messages encouraging participation in your online community (i.e. Slack group, Facebook group, etc.)
- Interesting and relevant local news and information.
- Information about upcoming events your space will be hosting.
The truth is, your members want to hear from you. They pay you money every month, which means they trust and value your company. But the content needs to be focused on the reader and how they get value from your emails.
You should be emailing your community at least weekly. If you can’t commit to that, start with monthly and sprinkle in content as you can. Find a format that works for you and plan out a content calendar that makes your emails interesting to your members.
But remember, don’t be self-centered in your emails or people will learn to ignore them.
4. Perform regular surveys (and actually listen to feedback)
Surveys are powerful, and there’s a particular way you want to approach them.
Find out your Net Promoter Score
A Net Promoter Score survey is one simple question that helps to gauge how your members feel about your company. The question is, “On a scale of zero to 10, with 10 being highest, what’s the likelihood that you would recommend us (our company) to a friend or colleague?”.
You should do this survey anonymously, and at least semi-annually, to get the best feedback.
What do your members care about? How can you make a better experience for them?
The only way to really know is by asking. If you try to use your own instinct, you’ll often miss the mark.
Asking open-ended questions like the ones above (instead of multiple choice) will let members give more nuanced feedback and bring up issues that you may not have thought about.
The main thing to note here is that you need to actually implement the suggestions they give you.
Complaints can be a wonderful thing if you actually fix the underlying issue. Don’t miss this part.
Now you’re making your workspace into something very attractive to current AND prospective members. The benefits are exponential. I recommend sending an email quarterly or semi-annually at least.
5. Bonus Ideas
Create member loyalty systems
Find ways to give something back to your loyal members. Lock in their original pricing if you raise your membership fees. Give them freebies and additional member benefits after being with you for a year. Make it hard to switch to your competitors because you go overboard with showing them how much you value them. Build it into a system.
Make them the heroes of your marketing
Featuring your members on your blog by interviewing them is a common and effective way to put your members first in your marketing. You may also wish to share their content on social media, follow their business profiles, and engage with their posts. Link to their websites in your blog content, if it makes sense to do so. Show them you care by being present and helping to promote their business through your following.
Business is all about people, and the more human interaction they have with the staff at your workspace, the more they will feel included. If you’re the owner, go out of your way to talk to your members and learn about their businesses. Show them you care in a personal way, and don’t forget about the quiet person!
Always do a +1
Way back, when I worked at a restaurant in my first “management” role, a more senior manager gave me some good advice. He told me that whatever someone is expecting from you, find a way to give them a +1. By that he meant, if the food was unusually slow and people would only reasonably expect an acknowledgement, offer them a complimentary snack. If a group comes in every week, give them a preferred table, VIP treatment, and a small treat after dinner to show them you care. You get the idea.
All of these member retention strategies are designed to help you develop better relationships with your members.
They allow you to keep the communication channels open, to add value, and to help you hear (and fix) small issues before they become big.
Managing a coworking space is not a simple job, but implementing the systems and strategies discussed here can help increase retention rates and profit. I help coworking spaces to implement marketing systems that help them grow. If that’s an area I can help you with, let’s talk.