Access FIT

Get out of your own way

When I let go of what I am I become what I might be." - Lao Tzu

Growth strategy or cash grab?

In my first report The Evolution of a Health Club Member: Survival of the Fittest Is NOT a Retention Strategy I make the point that not all members are created equal… some contribute to cash flow and some contribute to profitability.

Of course, cash flow is vital but if you are trying to grow your business you need to focus on those members that contribute most to the bottom line. Or in the alternative, you need to convert more of those cash flow members into more profitable long-term memberships.

Here’s the problem… you need to understand the difference and, in my experience, most owners and managers don’t.

If you have a growth strategy… your member acquisition activities will be targeted, they will incorporate one or more retention tactics, they will be measurable, and they will produce a predictable outcome.

If you have a cash grab… you will offer a significant discount, you will take all comers, you won’t have any specific retention tactics (apart from your “customer service”), and the outcome will be unpredictable.

Don’t get me wrong there is nothing wrong with generating cash flow from discounts and specials… just don’t expect to grow your business with them.

The New Rules of Health, Fitness, and Wellness Marketing

You choose your members…

…long before they choose you.

Most owners and managers have a “take all comers” attitude to member acquisition. But the fact is that you actually choose your members whether you realize it or not.

You choose with your marketing… you choose with your staff… you choose with your sales approach… you choose with the size, look, layout, and upkeep of your club… you choose with your programs and equipment… you choose with your pricing… you choose with your location… you choose with the members you sign up…

With everything you do you choose your members (by the way you choose your competition too)… so in the end we get the members we deserve.

If you want better members make better choices.

The old saying goes that beggars can’t be choosers… so stop begging and start choosing.

The law of supply and demand

The law of supply and demand is an economic theory that states that, all things being equal, an increase in supply will lower prices and an increase in demand will raise prices.

Makes sense of course… as more competitors move into a given market (increasing supply) prices for memberships tend to fall as owners and managers compete for a limited membership base.

Interestingly, the diversity of offerings and lower prices in the marketplace can actually stimulate additional demand and prices will settle at a new equilibrium point... although usually lower than the initial market price.

Why then do owners and managers discount their memberships during the New Year period… when demand for memberships is supposedly at its highest?

If the law of supply and demand holds true shouldn’t we be charging a premium, or at the very least not discounting our prices, during the New Year rush?

I recall one manager who recently boasted to me that he was discounting his memberships by a full 30 percent during the New Year rush but his competitor could only offer a miserly 20 percent discount.

Of course, many owners and managers today rely on the cash flow generated by the New Year rush… in fact without it many would not survive.

And because most of these New Year’s resolution members are not profitably retained owners and managers are forced to participate in the annual cash grab, and competing means discounting… and most often the biggest discount wins.

When you don’t know where your next member is coming from the pressure to compete, even when demand is high, is always present… and competing in our industry almost always means discounting.

You’re not as strategic as you think you are

I’ve been involved with more than a few “strategy” meetings in my time and they all tend to go the same way… owners and managers trying to figure out how they can improve their business by doing exactly what they are doing right now (or some slight variation of it).

At a stretch they might swap one underperforming tactic for another… direct mail isn't doing so well for us anymore, I know lets run a radio ad.

Here’s the problem… if you knew how to improve your business wouldn’t you have done it already? As Arthur W Jones famously said, “All organizations are perfectly aligned to get the results they get.”

Everything you are doing now is perfect to get the results you are getting right now.

Of course, the corollary of that is if you want to improve your business you’ll have to do something different… and most owners and managers aren’t good at different (at least not until everyone else is doing it).

If different isn’t always better but better is always different… than logically different is the obvious starting point for better.

The myth of the perfect ad…

Owners and managers often become obsessed with creating the perfect ad… you know the one that will have prospective members lining up outside the front door, cash in hand, ready to sign on the dotted line.

Sorry, but that kind of reaction is beyond the power of any single ad… even the late great Steve Jobs needed a 90 minute presentation to get the Apple faithful to get their sleeping bags and camp outside an Apple Store.

The problem is that no single ad can say everything to everyone; of course that doesn’t stop many of you from trying.

But inevitably, the more you focus on women the more men you alienate, the more you focus on baby boomers the more of the young adults you alienate, the more you focus on group exercise the more of the weights guys you lose, the more you focus on the hardcore exercisers the more of the beginner crowd you alienate…

At law there is an expression for it…”expressio unius est exclusio alterius” or the expression of one thing is the exclusion of the other.

By expressly mentioning one thing you are by implication excluding the others. You know what happens when your buddy tells you that his female friend has a “nice personality” you immediately infer that she is unattractive.

Of course you have to target your marketing but you’re damned if you do and you are damned if you don’t.

And advertising is so expensive, who can afford to have multiple versions of your message in the marketplace… all the time? It’s just not practical.

Well it wasn’t before iPOS advertising… with iPOS you can have a hundred (or more) different ads, specifically targeting different markets, where they congregate, generating tens of thousand of exposures every month for less than a tenth of the cost of direct mail.

Stop going crazy trying to develop the perfect ad… develop a hundred of them.

Check out the free preview chapter and the New Rules of Marketing report where we discuss iPOS advertising in more detail.

Break the habit

"The chains of habit are too weak to be felt until they are too strong to be broken." - Samuel Johnson

New ideas… you’ve got no idea

I was talking to a club owner and manager recently and he made the comment that, “we are always looking for new ideas in our club”.

Knowing this guy I’m sure he meant what he said but his actions belied his statement… he wasn’t doing anything particularly new or innovative in his club and as I discussed a few new ideas with him he was quick to offer up reasons why he couldn’t do anything right now.

When he said “we are always looking for new ideas in our club” what he actually meant was… we are always looking for ideas that other people aren’t doing that are fully tested, proven, and are guaranteed to make money.

A CEO at a non-profit that I talked to also made a similar comment, “this sounds great but can you tell me about someone else who has used this idea successfully?”

We all look at what others are doing as a guide to our own decision making. We are afraid that if we stray too far from the herd we’ll get lost, be vulnerable to predators, or walk off a cliff.

Of course, a herd mentality can hurt just as much as it can help… overpopulation, lack of genetic diversity, and missed opportunities.

Apple’s iPhone broke from the herd with its touch screen technology to position itself as a dominant player in the smart phone market while others adopted a wait and see approach that saw them relegated with the rest of the pack.

Curves, despite its more recent growth issues, became the world’s largest health club franchise with an innovative micro-club strategy that bucked the “bigger is better” conventional wisdom.

As the saying goes… different isn’t always better, but better is always different.

Every new idea starts somewhere… why shouldn’t it be in your club?