Originally Posted: 04/13/09
You would think that after over 60 years of sales training in this industry we would be good at converting potential leads into new members but the reality is that we are probably getting worse as time goes by.
The reversal of skills comes because how we sell, and the potential member's sophistication and expectations, have changed over the last few years. In the olden days of the fitness industry, meaning just last week because we still insist on using technology that is five decades out of date, we lived and died in this business by the pressure sale. Get a lead in the door, drop close aggressively and move on to the next lead.
Drop closing for you youngsters without psychotic experience in this business means you set a stupid price, such as $150, as your down payment and then leverage the sale by dropping the number to $50 or so if you sign today. This still works if your client is as stupid as a pile of mud laying in the middle of the road but for the most part no one with an IQ over that of your average hamster believes anyone ever really paid the full $150.
This degrading system is failing and the industry is in a transitional period right now that is quickly forcing many owners to adjust their practices to more ethical yet still effective methods. We still have to convert leads into members but how we do it is rapidly changing due to the more sales experienced member and the amount of competition a typical club now has.
The gold standard of sales is do you have the ability to convert at least 60 percent of your qualified leads into real members? The answer based upon national averages, which hovers below 40 percent, is no, we can't convert enough leads monthly to support most of the clubs in the market. Put another way, most clubs do get enough leads through the door each month, if they can accurately control and count the leads, to make that club profitable over time, but the owner simply doesn't have the skills to develop a staff that can effectively close those same leads.
This failure to close puts pressure on the entire club business system. If you can't close over 40 percent of your leads, then you have to spend more on marketing to buy a greater number of leads, or misses in your case if you are holding at the 38 percent national average and just keep walking those prospects to the door, which most clubs just can't afford to do. If you can't close, something else usually has to give and that is almost always customer service because all your money goes into sales people who can't get the job done leaving very little left for hiring decent service staff.
You can rebuild, however, if you are tired of living at the bottom of the fitness food chain. Here are a few ideas we discussed in our recent sales workshop in Charleston, SC, that any club could do to make a difference immediately in your business. These are not those brilliant, write it down on a napkin at the bar ideas, but most good business is really nothing more than mastering the basic skills anyway.
Get control of your leads: How many qualified leads do you get through the door each month, on an average Monday, on Saturday morning or on any other day of the week? Most owners can't honestly answer that question. Ask a McDonald's manager, however, what his average ticket sale is and he can answer that in about three seconds. There are fundamental numbers every successful owner has to know and how many leads through the door during the month and prime times is one of the most important. Use a basic inquiry sheet but start here to fix your sales effort. If you don't know how many leads you have, then you can't determine your true closing rate, which means you can't tell how effective your sales effort is over time.
Do sales training daily: Even if you are the only employee in your club, sit down at least once a day and read and study about how to properly present your business to a prospective client. Keep in mind that in today's market, sales are defined as the simple skill of helping people get what they came in for. We don't have to pressure or hurt people to be effective at sales but we do have to learn how to help people take the first step on their fitness journey and that often means we have to spend a lot of time practicing how we present the club and its services. If you have a larger staff, go back to a 30-minute sales meeting every day to focus on numbers and short training efforts. Train every single day on how you can be more effective on helping your clients get involved in your business.
Hire adults for the job: Stop hiring young, stupid male salespeople. The trend has always been to hire the stereotypical sales person from the chain clubs. He is young, a killer at the drop close, and knows every Tom Hopkins sales pitch in the book. He is also disruptive to your system, high maintenance, dates all your members and can't be coached because he only knows one way to sell, which is far too dated and aggressive for today's market. Hire adults and usually look for that plus 30 female who has customer service experience. Her communications skills are better, she presents a better first image, she can relate to a wider range of people, she will sell from a position of helping rather than forcing and she will often stay longer in your business.
Start a basic follow up system that you can maintain over time: Phone calls are not follow up. Phone calls are what you do when you don't train your staff on how to properly follow up a sales lead because no one answers their phone anymore. Use emails, use handwritten thank you notes, leave encouraging messages to get involved but do not depend on harassing clients on the phone until they give up and join. You should have at least a three step follow up system in place and most clubs should have at least five steps over 30 days to be effective. Calling people at home and begging them to come back is not one of these steps.
Get a dedicated sales person: You can't use multitaskers and expect to be effective. Get a dedicated salesperson whose sole job is new member acquisition and then pay that person well for the work. In most markets, you have to pay at least $12-15 per hour and commissions of at least $15-25 per sale to get anyone decent. Pay peanuts and get monkeys. Don't believe me? How did your staff of monkeys making $7 and hour do last month?
Owners need to learn to sell as well. If you own only one club, then you should still do the majority of sales in your business each month. There is nothing more important than generating new memberships for your business. If you aren't any good at it yet, keep practicing because you can't teach it if you have never done it. If you have no idea where to start, check out my book, Anyone Can Sell. The title says it all.
Thought of the week: The economy is already coming back and club sales, except for the first two weeks of February, have been decent. Get off your ass and attack. Market, train your staff in sales, go to a Perform Better Summit and get some new ideas but don't just sit there waiting for business to happen.