One of the most important aspects of a center’s profitability is growing and maintaining a healthy dues line. Studies on retention show that members are willing to pay more per month, rather than pay for a yearly membership up front. Over 75% of members at the most successful centers are billed monthly and bring in 30% more revenue with no additional effort. Billing members monthly on an “open-ended contract” also improves retention and lowers the cost and effort of renewing memberships each year.
A healthy dues line provides you with a track record of steady income – income important to banks when you want financing for capital improvements, or to potential investors looking at resale value.
TWO WAYS TO ENSURE A HEALTHY DUES LINE
There are numerous ways to ensure a profitable and healthy dues line, including proper sales scripts and administrative efforts:
Sales Scripts
Whether everyone at your facility sells memberships, or you have dedicated a sales team, a simple sales script is needed to promote monthly memberships with “open-ended” agreements.
After a needs analysis and tour of the facility, it is time for the rate presentation, and your script might include: “There are two ways to get started. We have a monthly option, which is our most popular because of its convenience, and you pay only $___ per month. Or, our pre-paid option is $___ per year. Which plan is best for you?”
Typically, a prospect will choose the monthly option with the proper lead-in and pricing. And, when they do, your script could say: “Great, all we need to get started is the pro-rated amount before our next billing [some software will figure this amount for you automatically] and to complete this agreement. The agreement continues on a month-to-month basis until you decide to cancel.”
If they ask why it continues month-tomonth, your answer could be: “It is more convenient for you to renew, and fitness is a lifestyle change, not a short-term goal.”
An entire article could be written on objections or concerns of the prospect, however as long as you approach every objection by the using a strategy like this, you should be fine:
• Listen to their objection intently. Make sure you comprehend exactly what they are objecting to.
• Acknowledge their objection by saying: “I understand your concern with…”
• Respond to their objection. For example: “I understand that you are concerned with someone having access to your checking account information. I would be as well. Paying by EFT [Electronic Funds Transfer] is really no different than paying by check. A company deposits your check, and their bank withdraws the funds from your account. EFT works the same way, except instead of writing a check each month with your checking account number on it, you provide us with your checking account number and your dues are collected electronically each month. EFT has been around for over 25 years – the process has become very safe and efficient and many people use it to pay their other monthly bills, like their mortgage. It is easier for both you and our center, and it helps us to keep our rates low.”
Administrative Efforts
While building your dues line, it is important that you ensure you are getting the most value by: limiting returns; obtaining the best rates available on merchant fees, and tracking your revenue stream. We recommend that you:
• Be sure your current software includes the following features, and that everyone in your club is using them:
– Ability to run reports on upcoming expiring credit cards,
– Create mail or email merges for ease of communication with your members,
– Provide reminders at the check-in screen to obtain updated credit card expiration and to avoid returns,
– Ability to flag potential billing problems before they happen (incorrect account numbers, no billing information entered, zero billing amounts, etc.), and produce reports to proactively fix the problems before sending a dues file,
– Automatically attach the EFT payment to the members’ accounts receivable history, and track revenues for you.
• Work with an EFT processor that:
– Provides an “account updater” to obtain changes to members’ credit card numbers and expiration dates,
– Automatically flags debit cards, and charges lower merchant fees for these payments,
– Doesn’t charge merchant fees for checking or savings EFTs (they shouldn’t be!),
– Provides software that allows you to create and send a billing file in minutes, eliminating the tedious process of “keypunching” your EFTs every month,
– Has a team of experienced billing professionals who check for obvious mistakes before processing, and gives advice on how to handle returns.
• Work with a collection agency that allows you to automatically download changes to “fix” members’ billing information for the next month.
• Compare month-to-month and year-toyear billing files to analyze the data and develop strategies to improve.
A healthy dues line is imperative for your business to grow and be profitable. It is important that you take the steps necessary to start improving your dues line today.
Len Bell is a Sales Associate with Twin Oaks Software. He can be contacted at 866.278.6750, or by email at lbell@tosd.com, or visit www.tosd.com.
