During uncertain times, doubling down on smart marketing and member experience sets leaders apart. Eric Goodstadt, the CEO of UpSwell Marketing, shares how.
From shutdowns to runaway inflation, we have dealt with a lot since COVID-19. With each new year, we’ve become hopeful that normalcy will return. Yet, since mid-November the likelihood of a recession has jumped to 60% and climbing. Whether we end up in a recession or not, only time will tell. However, from POS data we receive from over 400 gyms nationwide, the economic slowdown is obvious. Lead volumes are down, member acquisition cost is up and member cancelations are creeping up as well. With the economic outlook being murky, what should a smart gym owner do?
First, it is critical to maintain some perspective and don’t have a knee-jerk reaction. Be very careful when considering cutting your marketing spend. Studies have proven, reducing your marketing has a negative impact on your business and costs more to recover the market share you lose. On the other side, there are moves one should consider, such as:
Diversify your marketing spend. We live in a multi-channel world, but most gyms rely solely on paid social media. Consider shifting your budget to utilize more channels. If your monthly spend isn’t enough to execute multiple channels effectively, adopt a seasonal channel strategy. Use direct mail during peak season to reach prospective passive customers in the channel that is proven to get their attention. Shift to paid social during off peak periods to be in front of active customers who are searching.
Lean into your existing customers. In uncertain markets, consumers are likely to seek deals or lower cost providers. Therefore, consider pushing referral programs with rewards, discounts and free trial offers. Afterall, it costs 20-times less to keep a member than it does to find a new one, and they’re far less likely to trade out if they have a good friend training with them.
Be Your Own member. Throughout history, many of the world’s greatest service offerings were created during economic down turns. Reserve a class, use the locker room and equipment, walk the floor and take stock in your member experience. Is it a pleasant experience to work out in your gym? Are the services/classes you offer what your member community want? Is your staff friendly and well informed to provide a superior experience? Are there investments you should consider, such as upgrades to the facilities, new services, or an additional location?
Heading into the Great Recession, Macy’s and JCPenney far outpaced Kohl’s. When things got tough, Macy’s and JCPenney got conservative, they pulled back on advertising, reduced staff and eliminated store improvements. Kohl’s instead increased advertising, added more cashiers to ensure a fast checkout, focused on key categories for working moms and pushed their new ecommerce offerings. As the result, Kohl’s overtook JCPenney and Macy’s in market share and increased revenue by $790 million. The marketplace is getting tougher, no question. Whether you treat it as an opportunity or a threat will determine how well you emerge on the other side.
