Question 49
A chain of gyms analyzes member data and finds:
● Strong positive correlation between “Number of Personal Training (PT) Sessions purchased per month” and “Likelihood of renewing annual membership”. ● Members who buy ≥4 PT sessions per month have a 90% renewal rate. ● Members who buy 0 PT sessions per month have a 50% renewal rate.
The sales director concludes: “If we push every member to buy at least 4 PT sessions per month, our renewal rate will jump to 90%.”
What is the most important concern you should raise about this conclusion?
The observed relationship may be driven by underlying member motivation or fitness commitment, not PT sessions themselves, so forcing PT on everyone may not cause a 90% renewal rate.
The renewal rate is too low to be meaningful, regardless of PT sessions.
The correlation is negative, not positive; the director is reading the numbers backwards.
PT sessions are a cost center, so increasing them will automatically reduce renewal rates.