Creating a Strategy for Sustainable Growth
Sustainable growth is the ultimate goal of any health club. Developing a plan at the start of each new year is the most effective way to cultivate that growth.
Club Solutions spoke with Alan Leach, the group general manager and director of sales and marketing at West Wood Club in Ireland, about the club’s growth in 2018, and how to best sustain it.
CS: What can you tell me about the three-year sales and marketing growth strategy for 2018 through 2020 you’re putting together?
AL: Professional sales and marketing systems have been the driving force behind the phenomenal growth we have seen in previous years. We never approached sales or marketing from a fitness club perspective. We always approached it the same way any large, multi-national company would approach sales and marketing. We studied professional selling systems and have intensive, on-going sales training, professional sales managers, database management, direct marketing, digital marketing, proven strategic marketing principles and practices, and employ university-qualified marketing personnel.
We also look at what the best sales industries did. We studied Disney, Ritz Carlton, the finance industry and the direct marketing industry. Our sales and marketing systems are based on the absolute best.
CS: What are your plans for growth in the future?
AL: In late 2016, as part of a new growth strategy, we purchased our closest competitor, Crunch Fitness, adding three new clubs to our portfolio of clubs in Dublin. And for the last 18 months, our focus has been on upgrading facilities and adding new facilities to all six clubs.
The total investment had been over €16 million and included Les Mills Immersive Group Cycling Studios at all six clubs, salt water swimming pools, mind-body studios, interactive climbing walls, ladies’ gyms, and all new equipment to our clubs.
CS: What are your upcoming goals and strategies?
AL: Now that we are nearly finished with construction and upgrading clubs, our focus for the next three years will be to grow membership at the six clubs, while also looking for opportunities to open more clubs or purchase more clubs.
Our goal is to increase membership at our six clubs to 36,000 by end of 2018, 39,000 by end of 2019, and 43,000 by end of 2020. Our strategy is to implement the same sales and marketing systems and structures we used to build up the membership at our first three clubs, across all six clubs.
CS: Do you think it’s important for clubs to have growth strategies that span multiple years, versus just a yearly outlook?
AL: Yes, but every club should think both strategically and tactically about growth. Having lofty goals regarding positioning, branding, differentiation and creating a long-term sustainable competitive advantage are important. But it’s the everyday tactical sales and marketing activities that pay for these growth goals. Having one club and wanting to have 25 clubs is one thing, but if you don’t have the systems and structures to grow membership at one club, you are probably doomed to failure.
At West Wood Club, I set long-term goals. But I also check every day if we are selling the numbers we need to make those goals happen. Long-term strategies are important, but it is the tactical income generating tools that pay for the implementation of those strategies.
CS: What tips can you provide for how clubs can create a great growth strategy? Any learning lessons?
AL: Decide how you intend to grow. Will it be growing your membership at your current clubs or will it be opening new club? Or will it be taking over other clubs? Think big. But never forget that any club’s membership is built one membership at a time.
Never underestimate the importance of professional selling. Of all the investments I have been involved in over 34 years, investing in professional sales training has without a doubt been the most profitable. Whether you like it or not, the fitness industry is a sales and marketing business.
Get a deep understanding of “real marketing.” Most people thing marketing is advertising — it is not. Advertising is a part of marketing, but it is only about 10 percent of marketing. Marketing is everything you do that influences someone’s decision to buy or not buy from you. Marketing is also everything that influences a client’s decision to continue or not to continue to buy from you.
Don’t feel you have to always jump on the new, shiny object. Just because everybody is telling you that you have to be promoting your club through the latest social media channel does not mean you have to. Before jumping onto the latest, cool toy, learn about it. Read about it — and then decide if it can help your business grow.
CS: How can a club’s marketing and sales departments work together effectively?
AL: One of the problems for fitness clubs is when a club starts out in business, it is many times sales people who bring in the money. And in those early days, sales people and sales managers are usually the ones implementing new member promotional drives.
If fitness clubs are successful at sales continuing to grow, club owners sometimes decide to bring in a marketing manager with skill in branding, position, differentiation and segmentation. And all of a sudden, marketing becomes an independent player — working on marketing programs while sales people are still under pressure to sell today. This will ultimately cause friction between sales and marketing.
Every year, I meet with our sales team to set out our long-term marketing objectives, but I always remind the sales teams it is the their job to bring in the money to pay for marketing programs. Our sales people know without them we are lost.
Also, having someone at the very top of the company who is a sales person, a marketing person, and a final decision maker creates a sales and marketing culture — where sales and marketing always work together. And it is always culture that determines success.
CS: How can clubs ensure they’re not growing too fast?
AL: I have seen clubs get into serious trouble by opening up too many clubs too fast. And if the economy is good, and banks and investors are throwing money at you, it is difficult to not plow ahead and keep opening clubs. However, it is a different story making all these new clubs profitable. My advice is to work on building your profit generating systems, your income generating systems and your member retention systems. Once you have these systems fully ingrained into the culture of your business model, transferring those systems to a new location is much easier.
CS: Is there anything else you can share on growth that would be interesting to our readers?
AL: Yes. Invest in growing your staff and managers. When you open new clubs, your toughest challenge will be finding the talent to make those clubs a success. The best way to prepare for this challenge is to focus now on building your future managers. This way you will be creating the managers you want.