January is usually the time for new goals, new ideas, new energy and the start of new hope in the fitness business. We have always relied on high-volume sales in the early part of the year to set the tone for the rest of the year.
But this year more than ever, it is crucial that owners and managers have a plan for the upcoming year. It's important to realize that a steady state has become the new norm in the fitness industry, and growth is no longer the only focus.
As a result of the recession, consumers have changed their buying habits, possibly for the long-term. We need to be responsive to them by selling low-risk contracts and better value. People want to assume a shorter commitment and take on almost no risk.
Consumers are making more careful buying choices. They will pay for what they want, but they will look for and inspect the benefits in their purchases more carefully.
In their eyes, buying new club memberships gives them nothing except permission to walk through your front door. The benefits are minimal to them, even though you have a wonderful facility, equipment and classes. That's why new members need to be comfortably integrated into your club and its culture to become fully aware of membership benefits.
Recently, I asked dozens of successful club owners what they're doing to stay competitive and what they'd suggest others do in 2010. Here are their answers:
• Eliminate all the perceived risks to joining your club. Yearlong contracts will not work the way they used to for everyone. Sell month-to-month memberships, as well as an annual contract. Consider selling time-limited programs or a group exercise punch card.
• Choose two key performance indicator numbers and decide how you will move them.
• Choose two things you want to stop doing in work or life that will make you more productive.
• Develop a strong, proactive marketing program.
• Create or improve upon a well-developed sales training program. You may have to increase your investment in good salespeople, strong sales training and coaching just to stay even this year.
• Put in place a top-notch sales management system.
• Regularly review all costs and reduce them by about 5 percent a year.
• Review every line item in your expenses. Reduce, renegotiate or delay every expense.
• Cut expenses that have no serious impact on the value delivered to members. Do not use across-the-board cuts.
• Develop a regular program to add and explore new, non-dues revenue sources and aggressively manage those that you have. The best clubs earn more than 40 percent of their revenue through non-dues sources.
• Focus on marketing consistently to the Baby Boomer market and work to serve that group. You almost can run this like a separate profit center.
• Build a program specifically addressing fall prevention for members and nonmembers who are older than 60.
• Manage your attitude while enabling and encouraging other staff and members to manage theirs.
• Practice and develop persistence.
• Eliminate capital improvements and other investments unless you have a strong capital position or unless the cash is invested in driving your future market position.
• Start a community stress-reduction program. Hospitals are reporting increased emergency room visits caused by financial stress. We have an industry filled with stress-management skills and programs, such as aerobic exercise, yoga, massage and Pilates, just to name a few. Run a free stress-reduction program once or twice a week for the community, then offer the classes more frequently for members.
• Staff concerns and fears need to be addressed, not avoided, because these fears and anxieties can demobilize your staff. Tell them the truth, but focus on staying positive and on what you can do now. Begin with Jeffrey Gitomer's book “Yes! Attitude” as a role model. Show employees how staying positive is part of servicing members and delivering value to them.
Ed Tock is a consultant who has worked with more than 900 clubs. He also is a partner with REX Roundtables, a global organization that runs roundtables for business owners and chief executives. He can be reached at 845-736-0307 or by e-mail.