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It's Time to Stop Blaming the Economy and Get Your Ass Moving

Originally Posted 01/13/09

Most owners are so busy being busy that they fail to do the things that make money in the business. If you are not making the money you want from your business, step away from the endless action and make sure you are doing what is important in your business. Here is a short list, meaning you concentrate on a limited number of things to do to make a difference.

These are also the things you should be doing if you think the economy is hurting your business, although when I consult, I usually find that the club owner is hurting his own business far worse than outside influences by failure to execute the basic skills in the business.

This edition also will answer an email I received from Pitaron Health Club Consulting in Israel. Avi, Asaf and Sharon asked if I could give them some solutions for clubs in hard times. Here are the things you should be doing right now in your business:

Run a 30-day trial for $19: You need to get as many people into the system as possible at the lowest risk factor (we call this a risk free trial membership) for the potential client. This version of the trial membership is more powerful than a traditional trial, such as 14 days free, and attracts a different clientele. Your goal with this tool is to fill your own club with potential members while keeping as many prospects as possible away from your competitors. This trial also works quite well if you are in a market competing against low price/value competitors. Run this until the end of May and make sure you put a strong call to action on each piece (offer expires two weeks from the date of delivery).

Train your staff on sales: Train everyone, including the childcare people and janitors, in basic sales. Train everyday in sales with your team. If you have lousy sales people, sell all memberships yourself through the end of May. Get sales help, coaching, tools (we offer all of these through the NFBA) and be ready to do business. Your target conversion rate has to be at least 60% of all qualified leads convert into some type of annual membership over 30 days. The national average is about 35-38%, which means your competitor isn't hurting you, you just can't do business and deserved to get smacked down because you can't execute one of the most basic skills of any small business, which is the ability to convert potential business into real business.

Offer a value membership: Acknowledge that times are time and offer a value membership. For example, let's say that you currently offer a $49 a month membership for 14 months using a membership contract. Send a letter to all your members stating that you realize times are tough and that the economy is affecting their lives so you are going to respond to this by offering temporarily a value membership of $39 for 18 months. This is open to all existing members. And no, if they all sign up your monthly EFT draft will not go down. In fact, it will go up. What most owners fail to consider is that if someone has a money issue and has four payments left on his membership of $49, when he gets to the end of the membership he will walk away. If he has a chance, however, to resign for a fresh 18 months for only $39 he might stay. The increase retention rate will offset the lower payment and in fact should far exceed what you are collecting now. In other words, you should make more money from fewer people because members you would have lost will stay at the lower rate. The letter is important because it shows you are feeling their pain and reacting to it and keep is on a temporary basis until at least the end of May. If it works well, keep it going, but if you don't like it you at least stabilize your business and increase retention.

These three things should have an immediate affect on your business. If you're scared and nervous, stop watching television and stop reading the newspapers and go to work. You cannot change the past and if you think deeply about it, very few of your fears of the future ever really turn out to be as bad as you anticipate. Sure the housing market is flat, but what a wonderful time to buy a house as a great discount, and there is money out there but it is loaned on more traditional terms instead of crazy deals. Sure the stock market is down, but now is the time to get in and buy deals rather than getting out and following the terrified herd.

When times seem tough in the fitness business, attack hard with trial marketing and member retention. Your competition is sitting under their desks crying too chugging on that bottle of cheap whiskey. Now is the time to go hard in the market and buy market share from other owners who sit waiting for things to change. Things only change if you are willing to change them, and now is the time to seek change in your market.

What I amreading this week: I am rereading Paul Chek's book, "How to Eat, Move and Be Healthy". It's been around for a while and is still an interesting read.

Things to Check Out: Alwyn Cosgrove's website (http://www.alwyncosgrove.com/) and the Art of Strength website (http://www.artofstrength.com/). Both of these website will show you the future of the fitness industry. If you haven't been to a Perfom Better Summit-You need too! Check out more details at http://www.performbetter.com/

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