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When Complexity Fails, Seek the Simple

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.

 

Comments
Frank Kole 3 years ago
Poor Comment Good Comment
Hard Work and Relearning=When now i turn around and look out on my gym floor and see only 10 members in my gym woking out and all of them are with trainers! Hard Work and Relearning=When i look at my sign uo sheet for the UrbanBody Strong Man Stroong Women and there is over 40 people sign up allready. Hard Work and Relearning=When a member comes up too me who has been since the start and says you allways have something different for us to try and you are allways looking for the nexted for us! Hard Work and Relearning=This is what we got into this business for is to tell every that Hard Work and Relearning is what you need to do to change your life.
Thomas Plummer 3 years ago
Poor Comment Good Comment
And this coming from an old bodybuilder. You have reinvented yourself often and successfully Frank. It will be interesting to see what the next five years hold for you.Thank you for the comments as always.Thom
Frank Kole 3 years ago
Poor Comment Good Comment
Hey what do you mean Old. I am still 29! Lol! I guess starting in this busines since 1986! Hard Work and Relearning I have done it a few times in my life. There are three words I like to use with myself and my Team they are Learn, Earn, and Return. Throught hard work you learn and then you earn and you must return. Its a cycle that will go on for ever and ever. Leran, Earn, and Return. And I am not old just sessioned! Lol!
Kym Wimbis 3 years ago
Poor Comment Good Comment
Hi Thom...according to Da Vinci, "Simplicity is the ultimate sophistication." and Einstein is reported to have said, "Everything should be made as simple as possible, but not simpler." So you are in good company when you counsel to seek simplicity.I have just made a Free Preview Chapter of my latest report "The Lead Box is Dead... Long Live iPOS: The Humble Lead Box Concept Reinvented for the Twenty-First Century" available on the Access FIT Blog. I would be interested to know what you think and also if you and your Blog readers can deduce from the preview chapter the basic model that iPOS follows. The entire report will be available by the end of the month but I'd likie to send you an advanced hard-copy version (no cost of course) so if you are still interested can you e-mail me your postal address and I will get it in the mail when it is finalized.
Tambi Carrington 3 years ago
Poor Comment Good Comment
WOW how right on. In Shape just opened less than a mile from us. So the last few days I've been going through your books, In hopes that there is a formula for weathering the storm. (I Know what that is) But it helps when you know other owners are experienceing the same things. Found this blog today and it hit the nail on the head!!! Thanks! Some times we need a swift kick it the butt!
Thomas Plummer 3 years ago
Poor Comment Good Comment
Competition often makes good owners great and marginal owners unemployedRise to the occasion. Anyone can be beat if you master the basics and beat them at the foundational levelThank you for writingThomas
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