Now that it’s some time past the New Year, let’s step back for a few moments to reflect on how you are going to maximize the profit of your club. Reflection: It’s always a very good thing to do periodically. Increase profits: Well, that’s one of the basic reasons to be in business.
The fitness business is the same as many others. If you sell memberships, retain members, control expenses, and make sure that you collect from everyone using the club, your business will thrive. So, it’s time to ask yourself some introspective questions:
• What systems are in place to ensure that your organization is reaching maximum membership enrollment within your targeted market segment?
• What are you doing right now to target potential non-renewing members?
• How do you know if everyone has paid?
• How well do you control expenses?
If you are not happy with the completeness of your answers, some planning will enable you to create a plan leading to a systematic way of creating efficiency.
Let’s look at how you are doing your periodic billing for memberships. By creating a tighter linkage between those who use the club and those billed, you can immediately increase profitability by at least five percent. Often, inaccurate or incomplete membership records cause many members to go unbilled for months.
Can you identify those members that are likely to drop their memberships? Be pro-active by sending those members a pre-formatted letter, email, or even a pre-recorded telephone call that delivers a retention message.
Are your front desk personnel greeting each member personally? Are they remembering birthdays; offering services personalized to the interests of that particular member; asking for recommitments to a class, activity or service?
Now let’s take a look at your marketing effort. How are you identifying and attracting the prospective members you want? Which means of marketing are the most effective for you?
How effective are your sales people? A good club management software package can bring the best practices from leading club organizations into your operation.
What means do you have to track hourly employees? One industry estimate states that nine percent of part-time hourly payroll is overstated due to “buddy clocking” practices.
Members that call your club for routine account balances inquiries; to schedule a class or activity, or to make a payment, all consume the time of your staff. If you could off-load these routine requests to a website, you could increase the convenience factor for members, while reducing costs. Today, many clubs allow their members to self-process routine requirements.
Snack bars and pro shops are a great source of incremental revenues. But, they must be managed closely to protect against inventory shrinkage. How do you track inventory?
Almost everyone in the club industry uses punch cards to track per-visit services such as tanning, personal training and massage. But, are your staff members prompted at the correct time to ask for renewals? Are you missing repeat sales? Does your computer system assure payment before delivery?
Gift cards generate additional income from both club members and non-club members. Typically, the user is a different person from the purchaser. This creates a new customer relationship. Often, the user spends more than the value of the card. Gift cards also amount to an interest-free loan to you.
Can you identify problems early at your club? If club visits have fallen off from the previous month, when would you find out? If you can track key financial and operational statistics about the club, and act on them before they become problems, you will increase profitability. Club management software vendors provide tools like “dashboards” that allow Internet access to an up-to-the-minute daily business report showing key operating details.
Profitability Drivers Checklist:
• Remember the Basics: Sell, Retain, Control Expenses, Make Sure They Pay
• Increase Billing Accuracy
• Retain Your Members
• Greet Each Member Personally
• Tailor Marketing Efforts
• Get Control Over Your Sales Process and Sales Staff
• Lower Hourly Payroll Expenses
• Off-Load Information and Processing Requests
• Track Per-Visit Services
• Reduce Retail Shrinkage
• Use Gift Cards
• Identify Problems Early
• Market to Members by their Purchase Patterns
• Unleash Your Creativity
Yet another way to increase profitability is to market to members by their purchase patterns. For example, purchases of the bodybuilding segment at your club are clearly different than the fitness moms group. One group may be interested in dietary supplements, but not the latest workout clothing. By tracking your customers’ purchases, you can begin to market keyed to their interests.
This year is the year to drive the profits up in your business. Remember, you have the ability to step aside for a moment and visualize which of these ideas are executable. And remember also, that club management software vendors have many of these ideas packaged into their product offerings.
Steve Ruth is the Director of Sales at Aphelion Fitness Management Software. He can be contacted at 800.324.9800, or by email at sales@aphelion.net.
