Seek the Simple in Everything You do in Business
There are no magic sales words nor is there a perfect sales
pitch that will make every person join your club. There is no class, hot trend
or magic piece of equipment that will be a sustainable sales driver in your club
over time. There is no hidden business or pricing system that will fill your
club year after year no matter what the franchise or low priced guys tell you.
There are no magic ads that will drive thousands of people to your business
over time. There is no magic in this business.
The only things that do matter to your survival are lead
generation, closing rate, your ability to generate a higher return per member
through training EFT revenue, cost control and staff training done more often
than you think. These things matter and very little else does. These things are
not glamorous or sexy but they do make money if applied daily.
Most club owners that do falter or fail do so because they
spend most of their time trying to add something new to their business that
will suddenly turn them around. For example, owners at IHRSA buying a new line
of equipment, but who canít convert over 40% of their leads into sales, are
trying to buy a magic solution to a failing business rather than figuring out
how to get their closing rate to 60% or higher. When you donít have basic
skills, you try and add something to the business that will do it for you.
The big chains are great examples of complex businesses that
canít even handle the most basic business skills. Many throw millions of
dollars into their facilities but canít close enough sales to grow the chain
because they are still using 40-year-old technology in their sales system. It
does not matter how much stuff you have if your sales techniques prevent people
from buying your product.
Many of the franchise clubs in the Northeast have this
problem. These guys put $4 million or more into their clubs and then get
whacked by a $19 guy down the street in a mediocre club. Is it price or is it
the fact that you have 3000 members and only do $12,000 a month in training? Is
the problem that you charge too much or that you are nothing more than a club
that merely rents equipment and someone beat you at your own game? Were you
lucky to get away with it for years but failed when competition came to town
because you never really knew how to run your business?
Remember, it is not the price that is killing you; it will
always be the return per member. It doesnít matter if you show a low price to
attract a wider range of members even if you go as low as $19. It does matter
if all you sell is memberships based upon price and have no other way to
increase the return per sale. No one can win the volume game in a market where
everyone is looking for the low price to be his or her own personal magic. Low
price is a tool, not a solution or even a business plan. Low price is not magic
and wonít solve your problems over time if that is the only tool in the chest.
When complexity fails seek the simple. If your business
isnít performing, look at these questions and answer them in order:
How many hours a week am I really working to get
leads in here? For many of you, this should be the biggest part of your week.
Is my price set at the lowest point I need in
this market to expand my lead base? Set your price to broaden your entry level
but this alone is not the answer.
If someone shows up, have I hired the right
people, and trained them, to convert over 60% per month into new sales?
If they do become members, do I have a layered
pricing system that allows me to up sell them into higher priced memberships,
such as group personal training, that allows me to generate a higher return per
member on EFT? If your training revenue per month is less than 20% of your
membership EFT you are in the membership business, which is tough to sustain in
a price war where everyone is bottom feeding for huge volume.
Do I work each month to lower my cost or is all
I do cut cost? There is a difference. Good owners work to permanently lower the
cost of their operation by asking hard questions. Weak owners simply cut stuff
when they are broke and never really restructured the business and its basic
cost of operation.
Do I train my staff on the fundamentals of the
business, such as sales, the new member induction process and customer service,
at least four hours per week?
No magic here my friends, just hard work; yet this all I do
these days working with clients. The problem is that when we had it easy and
there wasnít much competition we could ignore these skills. Now, in the middle
of price wars, we find that most owners donít know how to do these things, and
if they do, they find them too hard and too much work.
The club business is sort of like a drug head that would
rather get wired than deal with his life and his problems. Dealing with reality
takes hard work and relearning basic fundamentals, but that isnít as much fun
as looking for the magic that would allow me to own a club and not actually do
much real work.
Adding a Zumba class or a TRX class to your schedule is much
easier than working your ass off to change your brand and train your staff, but
over time the tools fail and the only thing left is the carpenter. Either the
carpenter is skilled at his craft, and can really build, or we find that he
relies on spending thousands on getting the right tools but he never learned
how to actually cut a straight board. How many guys do we see in this golf that
have a $500 driver and a $.50 swing? Spend all you want on clubs, you are still
the same guy with the same crappy swing.
Times are tough in the industry. No matter who you are, or
how successful you have been in the past, if you are finding your business flat
or in a decline, remember the consultantís golden rule: when complexity fails,
always return to the simple.
Important notes: It is the start of the Perform Better
Summit season. They are offering three this year: one in Providence, RI; one in
Chicago and one in Long Beach. Get on line and sign up. This is for owners and
senior trainers. Get back into the business and go sweat a little. I am doing
the keynote at all three of these events.
There is one more speakerís school this year in August. Go
to mytpi.com to sign up. These are limited to 16 people each. If you speak for
a living, or want to, this is a must do. These are offered through the Titleist
Performance Institute and I team teach this with Greg Rose.
We are in Denver next this month and then in Louisville in
July. If you want to learn how to set a low price and still drive big training
numbers come this year. The material is changed about every 90 days so if you
havenít been in awhile you might be in need of some new ideas.