We're all aware that the economy is shifting, but that does not mean automatic doom and gloom. Instead, you should look at this time as an opportunity. Typically, people get lazy in a strong economy when it comes to diligence with lead generation, cost controls and planning revenue growth. In a weaker economy, you have the opportunity to become more diligent in these areas and especially in the area of sales.
In an economic downturn, we tend to look at the business outlook rather than looking out for business. There is a big difference here in attitudes and behaviors. When you look at the business outlook, you believe all the bad news presented to you. When you look out for business, you increase your efforts to seek more business. The business is indeed out there; you simply need to be better at looking for it and getting it.
Tough economic times do not mean customers no longer exist or people don't have money to spend. It just means that customers are driven differently than in a boom economy. Every major study in sales since 1950 shows that price and budget are equal when it comes to buying motivations.
What swayed customers in the Great Depression, the recession of 1953-1954, the 1973-1975 recession, the 1980-1982 recession and today's recession? Customers want protection. They want to avoid risk and will pay a premium to do so, according to Neil Rackham, author of "Spin Selling," a book that offers compelling statistics on selling in a depressed economy.
During difficult economic times, people want security even if it is at a price. When people object to buying a membership because of price or because they say they have no budget, it's an easy way to get rid of membership reps because most reps won't probe further. In light of this, you need to ensure that you offer more of a return or value with your membership — and you need to ensure that your membership reps convey this when speaking with prospects.
Sales managers need to examine their cost per sale to determine how to minimize costs as well as intensify and refocus the sales effort. Two ways to beat any economic shift are by cutting costs and increasing sales. Yes, both can and need to be done in any economy. It takes diligence and rational commitment to bear a positive effect and avoid a negative effect. For example, eliminating sales people that are productive or even quasi productive to save salary costs is a bad move. Eliminating productive sales people leaves you with fewer people to create business. You are then selling only to those who walk in and call. The sales team's job is to get out and create business, not wait for call-ins and walk-ins.
Sales managers need to be up front and honest with their teams. If the club has had an unpredictably high attrition rate and a lower-than-projected new membership sales rate, the sales staff must catch up. Some managers don't want to put too much pressure on the membership reps, and therefore avoid implementing a catch-up plan. Instead, they allow the membership reps to simply go for the current month's goal (or worse yet, they lower the monthly goal) with disregard to the real picture. This spells disaster. You may hit the monthly goal, but you're not going to hit the year-end goal.
If you are 50 memberships down for the year, you have to make it up in a realistic time frame. Don't blow away the sales team by trying to make it up in one or two months. Instead, add nine more sales to your goal each month and catch up or even get a bit ahead over the next six months. Be honest with your team. If they trust you, they will redouble their efforts to hit the goals.
Sales managers also must refocus their commitment to the club's vision, mission and core values. Your management skills, vision and commitment to the club's core values are critical to create a path of leadership. If everybody came to work every day and did their best, we wouldn't need managers. The fact is that you need to create an environment that brings out the best in people.
Sales managers must make the best of their meeting times with membership reps. Your follow through with the team is critical to ensure that all cylinders are firing at all times. If you aren't already doing so, now is a good time to implement weekly individual meetings with your reps, in addition to your weekly group sales meetings. The purpose of the weekly 20- to 30-minute individual meeting is to inspire your rep, do one-on-one training and work on performance issues. The cornerstone of this meeting should be their weekly sales report. With that report, you can determine what their performance issues are — is it phone skills, closing skills, pre-tour work, qualifying, needs assessment, relationship skills, handling concerns, closing the sale, or lack of follow-up? Determine what is holding each of them back and work on those skills. So many tools are available to reps in the form of training books, tapes, videos, role-playing, etc. They can double their productive capacity overnight by committing to doing the things that will make them successful and discontinuing the activities that don't. Help them determine what they need to do to be able to continually repeat their best performances.
One of the most important skills for membership reps to polish is prospecting and lead generation. Their job is not to simply take the call-ins and walk-ins but to create business for the club and more income for themselves. Do your membership reps know how many leads they need every month to hit their goal?* They need this information to have a formula for sales success. Most salespeople do not hit their goals because they are not talking to enough people. Your reps should put together a three-month plan that focuses on referral, corporate outreach and lead-generation activities. Once they do so (assuming their sales skills are where they need to be), they will not have a problem again with hitting goals.
Membership reps often dislike lead-generation activities, but if you have your reps team with another rep when generating leads, it creates a more fun and rewarding experience for them. Instead of sending one rep to do a corporate activity or sales presentation, send two of them so they'll have twice the energy, enthusiasm and follow through — and perhaps twice the results.
Make sure that your membership reps create urgency on their tours, but not a sense of promotional urgency, which often translates as pressure rather than as excitement. Instead, the membership rep should use personal motivation, programs and promotions to create an urgency to join. My recommendation is to use all three tools throughout the tour. To do this, your membership rep must know the needs, motivation and concerns of the prospect before the tour.
Urgency builds excitement for the prospective member resulting in a first visit sale. Urgency also builds excitement for reps because when they have more first visit sales, they create an upward momentum for themselves with regard to each sale thereafter. Momentum is critical to sales success.
As the economy remains tough, you might find that some sales reps apologize for your club's price. That practice can destroy all their efforts thus far. You need to find out the reason a membership rep is apologizing for price so you can stop it. The two main reasons for apologizing is that they lack faith in the value of the membership and their own financial situation is such that they could not afford the club, so they think prospects could not either. If your reps are unsure about the value of the price, you must explain your pricing philosophy to them so they understand the value and can communicate that to prospects. If they apologize for the price because of their own financial situation, you need to make them aware that many people in your market have different financial scenarios than they have at this time in their life and can afford the club. Let them know that carrying their financial circumstances into the sales process limits their sales success — and their ability to improve their financial future.
Attitude is even more important today than in the past when selling. Make sure that your membership reps are giving themselves a "check-up from the neck-up," as Zig Ziglar says. Before reps even step into the club to work for the day, they need to examine what is going on in their head and heart. Are they prepared to have a stellar day or are they on autopilot? What are they saying to themselves every morning and throughout the day? Sales success is determined more by what membership reps say to themselves than what they say to their prospects. They are in charge of their own energy, thoughts and, therefore, results. Are they giving 100 percent? If they are not, how can they expect to get 100 percent? The major problem in a questionable economy is not the downturn of economic indicators, but the downturn in people's minds — especially salespeople.
The tips in this article are definitely a back-to-basics approach. That is the point. Success in any economy can be yours if you have the basics covered well. In every economic situation and industry there are winners. Don't let your competitors be the winner because you forgot the basics.
* If you don't know how many leads you need, e-mail Karen for a simple form to figure it out.
Karen D. Woodard is president of Premium Performance Training in Boulder, CO, and Ixtapa, Mexico. She is an international author, speaker and consultant and provides successful marketing, sales, service and management training as well as consulting to the health and fitness industry. Woodard has owned and operated six clubs since 1985 and now devotes her time entirely to consulting, developing staff training materials, research, writing and speaking. She can be contacted at Karen@karenwoodard.com.
Woodard is a member of Club Industry's Fitness Business Pro Editorial Advisory Board.