Now is a good time to examine your center’s profitability. As a former fitness club manager, I always found that changes were easier to implement prior to the busier season. Following are some questions to ask yourself, and suggestions for improving your processes to optimize your profits.
PAYROLL
Have you examined personnel use, based on the busier and slower times, or in specific areas of your center?
Create a usage report and categorize it by times of day to see where payroll reductions may be possible. If you have two people on the front desk during slow times, drop it to one; if you have an exercise class with low attendance, drop the class, etc.
Can you determine the shifts that are most efficient for booking appointments and giving tours?
Run a report to determine when appointments and touring most often take place. Maximize the sales team’s efficiency by scheduling them to work when prospects are available. Implement split shifts and cross train other staff to handle tours during the slow times.
Are your employees keypunching EFT or in-house charges each month? Are they entering returns? Are they in charge of collecting the statement-billing members’ dues?
Obtain software to automate these types of tasks and save countless hours of payroll and frustration.
Are you manually performing time clock, commission and personal training pay calculations?
Club management software is available to make this more automated, and this can help to simplify your pay structure.
SALES, MARKETING AND RETENTION
Are you tracking low-usage members and proactively trying to save their memberships?
Run a low-usage report and contact members before you lose them. Reports can be created to help spot trends – look at usage during the first 30, 60, 90 days after joining. Create call lists or email lists to use to help get members back into the club and on track.
Do you know which of your marketing efforts are bringing in traffic and leading to members?
Be sure to find out from joiners how they heard about you so you can easily run reports to determine which marketing tool is working best. Use this knowledge to spend money where the return is greatest (better than an $80-per-member ratio, if possible).
Are you working with your sales team to overcome the most common prospect objections in order to help increase sales?
Determine which objections are the most common by having sales reps log objections into your lead management system; then train your sales team to overcome them. Run a meeting completely based on role playing. Practice listening to objections; acknowledging the concern with empathy, and responding with a consultant’s mindset (to help prospects realize that their best decision is to join your center and meet their fitness goals).
Do you collect members’ email addresses?
By collecting email addresses, using “areas of interest” questionnaires and using software to automate emailing, you can target individuals and groups by their areas of interest without spending a lot of money on printing and postage.
Can you determine what line items in your center are most profitable?
Run margin reports to determine the highest percentage margin and highest volume items at your center. Focus on these and not the small margin or low volume items.
ELECTRONIC FUNDS TRANSFER (EFT)
Is your percentage of returns each month 4 to7%?
If it is higher, use your club management software to produce reports (such as: credit card expiration dates; an EFT problem report, etc) to proactively lessen your returns.
Who is performing your collections follow-up? Is the retrieval rate greater than 75%?
If not, have a reputable company do it for you for added revenue. The best companies do not charge you anything (they make money from each member’s service fee).
What are you currently paying for credit card merchant fees?
If it is higher than 2%, plus transaction fees higher than $.25, and higher than 1.6%, plus transaction fees higher than $.15 for retail, or if you are paying for checking drafts, it’s time to look into other options. Use a company that doesn’t take a percentage over and above what the merchant charges, and look for competitive merchant fees.
What is your breakdown between monthly and pre-paid members?
Monthly memberships typically result in 33% more profit than pre-paid. Use sales scripts that lead members to pay monthly. For example, “The majority of our members pay monthly because of its convenience…”
Have you analyzed your pricing in relation to your competition?
If you are the highest-priced center and you are making improvements, perhaps a rate increase is in line. If you are priced in the middle, it might make sense to drop the monthly rate to attract some members and increase volume.
Is your software compliant with recent security guidelines?
One mistake with lack of security on credit card information could cost your center thousands. Check with your billing service and software company to ensure they are CISP compliant.
There are many ways to increase profits at your center, and small percentage increases can results in thousands of dollars in profits. Implement changes prior to the busier season, and see your profits soar. Good luck!
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.
