Evolving To Increase Profit

shutterstock-57623788The fierce competition in the health club industry is growing more intense. As a result, many clubs are being forced to lower their dues or increase services to stay competitive (or both). So, how do you differentiate your fitness center from the rapidly expanding $10-per-month chains?

Let’s start with some of the obvious basics. Your club needs to be clean and the equipment maintained and working. Your employees should be friendly and outgoing, and the décor must be bright and lively. By boasting these basic qualities, your club is already well on its way to differentiation.

But how can you take it a step further? In the end, it doesn’t matter if your club is different from the competition — it needs to be profitable. As a result, here are some tips for cutting expenses and increasing revenue, to ensure your club’s future.

Online Payments: In today’s club industry, one of the more popular revenue drivers includes revenue collected online (from memberships, personal training or specialty classes, for example).

Having the option to pay online is great for customers who favor convenience. And, the ability to make a spur-of–the-moment buying decision — without physically being in the club — can help those members who tend to procrastinate or fail to take action.

In addition to drawing in revenue, online paying saves money for clubs as well, by reducing the need for an expansive sales staff. This requires a reformatting of the commission structure to prioritize retention, versus the initial sale. However, the effort may be worth it in the long run.

Targeted Marketing: One way to increase memberships (and revenue) is to document all prospects, former members, expiring members and low-usage members. A dramatic increase in sales has been attributed to sending email blasts with specific offers to these groups on a regular basis. Many clubs also track their marketing demographics to determine the best use of advertising expenses.

Or, consider sending professionally developed email blasts to all households within a 7-mile radius that have an average income over a certain dollar value. It is important to have a software module that tracks the follow-up on these leads, as well as close percentage for the sales staff.

Staying Ahead of the Curve: The industry is evolving rapidly, and there are many more examples of owners increasing revenue or reducing expenses that are being used successfully every day. This is why it is so important to be teamed up with a club management software company that provides an industry experienced, dedicated account manager that can highlight all of the possibilities.

The key as a business owner is to be presented with an exhaustive list of successful new developments — and to be showed the resulting pros and cons of implementation. The bottom line is a business must evolve rapidly and with intelligence to stay ahead of the fierce competition.

 

David Porter has been a sales consultant at Twin Oaks Software Development for many years. Previously he ran several businesses, including Suburban Athletic Club outside of Boston, which he co-owned and operated for 10 years. He can be reached at 860.829.6000 or dporter@tosd.com.

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