The fitness industry has become more diversified with its many models today. Yet even though all of these business and membership models have a similar mission of changing people’s lives through fitness, their sales processes can be just as diverse as the industry.
Regardless of the memberships that you sell, most facility operators must choose between three basic sales structures. You can opt out of having a sales team and allow all prospects to become members via a handwritten form, web process or another non-proactive process. You can pay salespeople an hourly wage or salary to perform pre-set tasks. Or you can pay salespeople commission and a bonus plan, rewarding them based on their sales numbers.
As a club operator, you need to evaluate each option and choose the sales structure that best fits your model, remembering that each system offers its own pros and cons.
The system that does not have a sales team allows you to eliminate the cost of a sale, but that savings may come at an expense to your club. If you are a small club with visible equipment and a small schedule of additional offerings, your marketing is simple, clear and concise. Your prospects likely know all they need to know about your business. They can envision themselves working out in your facility, and they bring in their friends to join. If you are meeting your sales goals and retaining your members, then this may be the best method for you.
However, few clubs can successfully operate this way and instead require a sales staff. If that is the case with your facility, then your next decision is whether to go for a commissioned or noncommissioned setup. The differences between the commissioned and noncommissioned sales team options lie not only in the compensation but in your management and sales system setup.
You first must evaluate whether you will have a manager present who will dictate the work and act as a closer. Also, does your marketing bring in enough leads or do you want your salespeople self-generating leads? Do you want to dissect the job duties, such as marketing, presenters, closers and a person to handle follow-ups? Do you expect a salesperson to generate their own prospects? And to what extent? And are you concerned about their motivation or do you just need tasks completed?
The three keys to your decision are workflow, motivation and results.
If your process involves having a strong manager present, then the salespeople become worker bees who simply complete tasks. In this system, the salespeople make a large number of calls using scripts and send out letters to generate leads. They confirm appointments, give tours and present a scripted offer. In this scenario, the manager often handles the close, and the salespeople then fill in the necessary paperwork. This method could be handled with an hourly or salaried position.
The other end of the spectrum is the total commission salesperson. In this system, the salespeople are given lists, encouraged to make personal lists and walk the floor, and get out into the community to self-generate leads and referrals. In this setup, the commission would be high, likely in the 10 percent to 20 percent range, and a bonus would be given when certain revenue goals are surpassed. This method can work well if you can easily attract motivated people and if you can generate a massive lead base.
Club operators often choose their sales setup based on the personality type of the sales team members that they wish to attract. Noncommissioned salespeople can be a little less aggressive, and your ability to dictate that they perform other job duties, such as follow-up calls and retention process, is much easier. Full commission salespeople may have more aggressive personalities, but because their salary is based on how many sales they make, they are less likely to want to spend time performing ancillary duties that cut into their sales time.
A blend in your compensation plan may be the answer. You often get the best performance by setting up a base salary that gives salespeople some protection during the first three months and then offering a commission and bonus plan that is simple to understand.
Thomas Kulp, formerly the chief motivational officer at Universal Athletic Club, Lancaster, PA, is the director of Solution Consultants. He can be reached at 717-799-5155.