For almost a decade, our prospering economy created an environment where average club operators could enjoy a certain level of success regardless of what they did or did not do with their marketing. That has all changed now. Operators who do what others are unwilling to do will not only survive, but they will thrive through this current climate.
Club operators must focus on three critical areas of marketing to succeed: member marketing, guerrilla marketing and program marketing. Although these categories may sound boring or same-old, same-old, most club operators have room for improvement in what they do for each. Regardless of the strategy or tactic, operators committed to excellence always ask themselves which approaches or distinctions within this particular topic or idea they can improve upon and how they can make small quantifiable changes to maximize success.
To grow any business, you must either get more customers, get customers to make bigger purchases or get customers to buy more frequently. Most business owners put all their efforts into obtaining new customers and little into the other two. But that's a mistake because getting existing customers to buy more and buy more often is actually easier (and a lot less expensive) than obtaining a new customer. The key is finding a balance among the three.
Many club operators use in-club signage or newsletters to market ancillary products and services to existing members. The approach works to a certain extent, but one way to dramatically increase ancillary sales is to use member-interest databases. These can be e-mail sub-data bases that identify specific areas of members' interests, such as weight loss, nutrition, kids fitness, flexibility, balance and stability, group fitness, yoga, Pilates, golf, tennis, personal training, group training, etc.
Through e-mails and newsletters, the club entices members to use the Internet to opt in to notifications about topics that interest them. Once these e-lists are established, club staff can communicate with signed-up members about events or offers of interest to them. This approach is much more effective than generic newsletters that members just skim or never open. In fact, clubs that have shifted to topic-specific e-newsletters (that are shorter and specific to one area of interest) generally have higher open rates and positive member feedback rates. Let's face it: We're all super busy. If my club sends me only the articles that I am interested in, saving me from having to weed through the rest, I'm going to be happier and more receptive to them.
More importantly, e-mail that promotes something has a much greater chance of getting a response because the offer/information is not lost in a multi-page generic newsletter. This is smart, modern-day member marketing.
Most clubs have the names and addresses of hundreds, if not thousands, of people who are former members (alumni) of the club. You have probably sent a percentage of these individuals some sort of new year mailing to re-join. This makes good sense because American Sports Data reported that someone who has had any experience with a club is 300 percent more likely to join a club again than someone who has had no experience with a club.
Club operators often make two fatal errors with alumni marketing. Some club owners take a once-a-year approach by marketing to alumni members only at the new year. However, every other health club in your town is advertising during the new year. By focusing on a certain number of alumni members (for example those that quit six to 18 months ago) and marketing to them quarterly, you will re-establish more of a relationship and increase the chances of their joining.
The second error is failing to place a secondary offer in the ad copy. The offer of a $20.09 joining fee in your postcard mailing would be your primary offer, but a secondary offer would be an enticement to get the reader who is not ready to join to at least respond.
For example, at the bottom of the postcard, I would put "Trying to exercise at home? Go to www.exerciseathome.com for a free e-book on everything you need to know." When the reader goes to your Web site, they see a "squeeze page," which is a page where they either must give their name and e-mail (squeezed out of them) to receive the free e-book or leave. (For an example of this type of page, go to www.10ShapeUpTips.com.)
Secondary offers help you build a database of individuals who have some level of interest in your product (they want to get in shape) but are not yet ready to join. With this list of more-interested-than-not prospects, you can market more regularly and intelligently to only those alumni members.
This type of intelligent, e-list building marketing allows you to save money while building qualified prospect lists. Smart club owners will begin incorporating these types of e-strategies and tools into all their marketing efforts.
The last type of member marketing is referrals. Referrals are the lifeblood of health club sales. Club operators don't need much education on the power of referrals, but you should ask yourself:
- Does our club have a point-of-sale referral system that ensures members are at least asked about sharing guest passes with friends, family members and/or co-workers?
- What is the success rate of obtaining names? Specifically, do you know what the average number of referral names per new member is by salesperson?
- Is your club using e-technology to increase the number of referrals given by new members and/or existing members? Specifically, does your club use an auto-responder program where members can directly send an introduction letter to their friends without the fear of being called by a salesperson?
- Have you varied your existing member referral campaigns, or are you using the same old incentives and prizes year after year?
- Have you used class passes instead of generic guest passes, allowing an individual to come to a specific group exercise class? Club owners using this strategy report that the return rate is greater than for generic guest passes, perhaps because of the dynamic and supportive environment that group exercise creates.
- Have you analyzed which members give you the majority of referrals and then created a special referral incentive program just for them? The 80-20 rule says that less than 20 percent of your members will give you 80 percent of your referrals. Why not identify these individuals and do more to encourage additional referrals?
Guerrilla marketing refers to any type of low-cost marketing effort. Lead boxes, take-ones and flyer distribution are common examples. In addition to being low cost, most guerrilla marketing is done by the club's sales staff, who go out into the community and network with local businesses and organizations to find marketing opportunities.
In today's economic climate, guerrilla marketing is more important than ever. Clubs must find ways to directly reach prospects, and guerrilla marketing can accomplish that through joint marketing relationships with other local businesses that have similar customer bases.
The number and type of guerrilla marketing activities are endless (see the "Ten Guerrilla Marketing Ideas" sidebar for 10 simple and effective guerrilla marketing ideas). Although most club owners already have their sales staff do guerrilla marketing, they must take it to the next level and make guerrilla marketing an entire club culture. Ideally, every employee at a club — regardless of their position — should participate in guerrilla marketing.
Every employee can become a marketer because everyone in town probably knows the owner or manager of one or more business. It is much easier to approach someone you know about joint marketing opportunities than it is to cold call. Even if your non-sales staff just makes the introductions to a sales staff member, the process becomes much easier and more likely to turn into a joint marketing relationship. Furthermore, these other businesses are also looking for ways to reach more customers. They probably will be thrilled to discuss possibilities.
Finally, approach all guerrilla-marketing activities (joint business or otherwise) with the proper perspective. You are planting lots of seeds. Some will grow into beautiful plants and some won't, but the cost of planting those seeds was minimal. It's a numbers game.
If you have 25 guerrilla marketing activities happening every month and each brings in just one new membership, that's a lot of memberships for little or no cost.
Program marketing is where you offer short-term programs or fee-based activities that non-members can purchase without a full membership to the club. For years, most club operators have shunned program marketing because they would rather get a long-term contract to bolster the monthly EFT and because they could shun it. Even with a shift to month-to-month memberships, most clubs do not offer programs to non-members.
With the current economic situation, I predict that more club operators will turn to this smart, strategic approach for one big reason: the offering of short-term programs that do not require a large or long-term financial commitment will drive more prospects through the doors.
If you aren't convinced that consumers are scared to make commitments, then turn on your television during any NFL game and see Hyundai's newest marketing offer called Assurance. Buy a Hyundai, and if you lose your income in the next year, you can bring the car back without any penalty or credit risk. That may not seem like a short-term program to you or me, but no manufacturer in the history of selling cars has ever made such an offer.
This ad is an example of lowering the barrier to buying, and that is exactly what program marketing does. It makes it easier for the customer to say, "Yes, I want to give this exercise thing a try, and I don't have a lot to lose, so what the heck."
Of course, the key to programs is delivering a great experience to the consumer and helping them achieve the goals they want from that program. Perhaps it is an eight-week weight-loss program, a six-week group personal training program, a four-week group exercise program to a specific class or an aquatics program.
Famous marketer Jay Abraham often talks about break-even marketing where you offer a product or service to new prospects knowing that you won't make a cent on their initial purchase. However, because you know that a certain number will continue with the service or buy another product, the marginal net worth of the customer warrants the seemingly unappealing approach.
As I have told many club operators of late, if you aren't getting as many prospects through the doors as you want, why not establish some program marketing? Short-term revenue streams are better than no revenue streams. Better yet, if you service them correctly, they can lead to long-term revenue.
A McGraw-Hill Research study during the recession of 1981-1982 found that companies that maintained (or increased) their marketing during that time saw an average sales growth of 275 percent over the following five years. But companies that cut their marketing saw paltry sales growth of 19 percent during the next five years. That's pretty compelling.
Now more than ever, club operators must aggressively manage their marketing mix, ensuring that the basics are being done well and looking for new, fresh strategies to pursue while others are immobilized by fear. Being budget conscious doesn't mean doing nothing; it means finding ways to market despite the situation. Take an honest inventory of what you are doing now, and use this article as one tool to analyze if you are maximizing every marketing opportunity.
Casey Conrad has been in the health and fitness industry for more than 25 years. A featured presenter and columnist in more than 17 countries, Conrad has written and produced more than 30 books, audios and DVDs about sales and marketing. For free marketing resources, visit her site at www.SmartClubMarketing.com.
Conrad is a member of Club Industry's Fitness Business Pro Editorial Advisory Board.