The number of profit centers available to your club is limited only by your drive and imagination.
Imagine a place where visitors can get their clothes cleaned, have their cars washed, take a computer class and arrange a trip to Europe. Sound like a mega mall? Nope-it's the local fitness club.
Clubs typically make their money through membership sales. But in these times, when people are trying to fit more and more into their allotted 24 hours per day, it makes sense to draw customers into your club- and to keep them there-by providing services that cater to the time-pressed member. Not only that, but these nontraditional perks serve as profit centers, generating cash at the same time that they improve customer service.
Making Alliances Makes Sense The easiest way to create a new profit center for your fitness facility is to team up with like-minded professionals. For example, a club may set up a referral program with a local doctor or a couponing incentive with a sportswear store. "With every pair of shoes a store sells, they can give the customer a gift certificate for your club," suggests Greg Florez, founder and president of the Salt Lake City, Utah-based First Fitness Inc., a training and education company that provides consulting, sales and marketing services and customer-loyalty programs. "You then get a copy of the certificate so you can do an outbound call to that customer."
In exchange for giving out club certicates to people who buy shoes, the sportswear store would supply the club with coupons of its own. For example, whenever the club signs up a new member, the person receives a discount certificate for a pair of sneakers at the store. And by mentioning the coupons in their marketing campains ("Get a discount on a health club membership when you buy a pair of sneakers!"), both the club and store will draw additional customers.
A sportswear store is only a basic example of a club partnership. Don't be afraid to get creative with your partnering ideas. "Make sure it's not like the old days where you just stuck up a lead box at the health food store," cautions Florez.
To get your creative juices flowing, ask yourself: Who are your members, where do they shop, and what do they do? By answering these questions, you may discover that you can profitably partner not only with health food stores but also with pro shops, organic groceries, juice bars and even physical therapy clinics.
"I've even seen a model with a group of OB-GYNs," says Florez. "When a woman who is pregnant or who wants to become pregnant comes in, they not only strongly recommend that the patient have a fitness screening and assessment, but a personal trainer or exercise physiologist from the club is on-site at the doctor's office on particular days to accomplish that." In this way, the club develops a relationship with a potential customer whom it may not have seen otherwise. And the doctor benefits because the assessments and subsequent health recommendations can reduce the risk of problem pregnancies. It also helps the physician with his continuum of health care to mothers.
Partnerships like these will only flourish if a club takes steps to ensure an appropriate response. The trick to getting customers to respond to your offer through a strategic partner is to create an action and a reaction: a customer action to your offer and a corresponding reaction on your end.
For example, printing a list of the benefits your facility will provide and a call to action ("Schedule a tour of our club today!") on your gift certificates will get the customer to redeem the coupon (take action). When the customer arrives at your facility, your staff's competence and friendliness in redeeming the coupon is the reaction that will increase the likelihood of that customer becoming a member.
"There has to be a circular link," says Florez. "You can't just give out a bunch of certificates-there has to be an action and a reaction. Put the onus on your salespeople to make it happen."
Whomever you decide to partner with and whatever you decide to offer, take the high road. Forming an alliance with an unpopular doctor or a sporting goods store notorious for its shoddy customer service will drag your facility down instead of impressing potential customers. "Research who is credentialed and who has the best reputation for customer loyalty and service," says Florez.
Build It and They Will Come In addition to partnering with outside business, you can profit from on-site, brick-and-mortar businesses that you run concurrently with your fitness facility, such as travel agencies, tailors and computer schools.
When it comes to such nontraditional profit centers, Jan Rubins, general manager of LifeCenter plus in Hudson, Ohio, speaks from experience: Where there used to be 18 racquetball clubs, now stand, among other things, a tailor shop, a computer lab and a travel agency. Most of these amenities are open to nonmembers. "As the community has grown, racquetball has died," says Rubins. "And as people became more educated and knowledgeable, we became more multipurpose and converted the racquetball courts into other offerings."
These profit centers do more than attract and keep customers and bring in extra income; they also help the fitness facility in its marketing efforts. For example, the travel department, which offers day trips as well as international tours of up to three weeks, has helped the club in its efforts to target the growing senior market. "One of the things seniors have time to do is to go on trips," says Rubins. Excursions have ranged from the Cleveland flower show to whitewater rafting on the Colorado River.
LifeCenter plus' computer lab also helps the club serve the senior market. "It allows us to diversify our programming," explains Rubins. "We have a lot of seniors, so this gives them an opportunity to spend more time with us and learn something new and innovative."
If these nontraditional profit centers seem way out of your league, one popular profit center that melds perfectly with the health club atmosphere is the spa. Health club-based spas include, at a minimum, massage and body treatments and aesthetic services such as facials, waxing and manicures, but can also include such treats as hydrotherapy and a Vichy shower (a table with shower heads that soothe people with water).
"The demographics for people who want to use a spa really match those of the health club client," says Laurie Helmick, owner of Luxe Deluxe LLC in Denver, which offers a salon spa and consulting for clubs and spas.
Spa services can raise revenue, but, unfortunately, these amenities don't come cheap. "Wet rooms can easily cost $20,000, not including the equipment," says Helmick.
Whether you opt for a spa or a tailor, one thing that these types of profit centers require is space-and lots of it. After all, no one wants to get a massage in a room the size of a closet or take a computer class where the students constantly bump elbows. One way to find space is to take a tip from Rubins: Assess which offerings aren't earning their keep, and convert them into profit centers that will boost your bottom line.
Even if you do have space and resources to incorporate a new profit center, another question arises: Who is going to run it? "I would never expect the profit center manager to be the club manager also," says Helmick. "There are so many details that have to be worked out, it would be difficult for a club manager to do both well."
Most club employees can serve at the front desk for almost any type of profit center, but for other functions (e.g., massage) you'll want people who are trained, certified and skilled in the services you're offering.
At Your Service If you don't have the space or the resources to support a dry cleaner or a spa, don't despair-the options for profit centers are limited only by your imagination. You can easily provide invaluable services to your members without one square foot of additional space. How about offering valet parking, or running members' clothing to the dry cleaners? Why not wash cars in the parking lot?
Before creating any sort of profit center, whether a full-blown spa or an on-the-fly valet parking service, the key to success is to make sure your customers will use the service you've spent so long making a reality. "Think of the health club as a hub for people who are very busy," says Florez. "Who are your members, what are their issues, what do they need?"
When in doubt, ask. "Just ask your members, 'If you had an on-site dry cleaner, would you use it?'" Florez says. This simple step can save loads of time and money.
Turn Trainers Into Salespeople No article on profit centers would be complete without mention of the profit center common to most clubs: the pro shop. Trouble is, most clubs build pro shops and expect the merchandise to sell itself. In some cases, it can, but you can move more products with "upselling."
Upselling is the practice of adding more items onto a customer's original purchase. It's like when you go to McDonald's and the cashier asks if you want fries with your burger-except that you're offering much healthier products. And who better to upsell pro-shop products such as sportswear and nutritional supplements than your own trainers?
Personal trainers should make their upsell a soft-sell during sessions-when appropriate. Typically, they can suggest products in the club's pro shop. For example, if the client is doing weight training and is developing calluses, the trainer can recommend gloves.
"Personal trainers are a huge influencer of consumer buying and behavior," says Florez. Not only do trainers have experience and knowledge in health and fitness, but they have fostered trust among their clients.
However, trainers are not necessarily salespeople at heart. To fire their enthusiasm about the product or service you're selling, train them on the benefits. "Personal trainers don't want to be viewed as salespeople," says Florez. "Keep the product selection conservative so you're not asking a non-sales [person] to do too much selling. You have to get staff input and sell the idea first to your professional staff."
When doing that, remind your staff that profit centers do more than provide products and services; they provide convenience. Whether selling sports drinks in a pro shop or dry cleaning through a partnership with a local laundry, your profit centers should ultimately save your customers time. That will translate into more time spent at your club-and more profits for you.