fter a lackluster first year in business, the existing course and speed did not portend any sales improvement for Club Nutrition & Fitness in Springfield, Mo., for the upcoming 2005-2006 season. A change in strategy was badly needed—and some fresh ideas from an outsider.
Kevin Walker, former Mr. Missouri in 1996, had a successful personal-training practice in Springfield and gained further national prominence for having trained an EAS Body-For-Life champion. With these strong credentials, he decided to venture forth and open his own health club. In July 2004 he took the plunge and opened his full-service club called Club Nutrition & Fitness.
Leaving his personal-training safe harbor, he now was venturing into the area of club members and the puzzling memberships business model. He soon found out that this was a dramatic departure from merely maintaining a book of loyal training clients.
Surrounded by established clubs and hospital wellness centers, Walker opened his lavish health club with an attractive offering of amenities. Surely, members would flock to his establishment. However, he quickly found that "if you build it, they will come" does not automatically work in the health club business—even if you build it well.
Although the club had innumerable physical attributes, and was even voted the "Best Club of 2005" by 417 Magazine of Springfield, memberships just weren't gaining traction.
Walker had many sleepless nights.
"I was concerned about new member acquisition, also the loss of members, which wasn't terrible, but we didn't achieve what we wanted the first year," he says.
The "referral model" that is the backbone of building a personal-training business just wasn't enough when it comes to building a large sustainable membership base, many of whom come in and use the equipment with far less interaction with the staff—selling therefore would have to be more proactive.
The club fell far short of its target in the first year-and-a-half, and Walker found himself training more and more clients to close the gap in cash flow. He quickly realized that although marketing wasn't his forte, it was going to be necessary for survival in this new game.
Call in an expert
Einstein's definition of insanity is "continuing to do the same thing over and over again but expecting a different result." Many health-club operators do just that, they keep doing what they're doing but try harder, more often than not, they're still failing, but now they're exhausted.
Luckily in Walker's case, he called in some outside expertise.
After interviewing several health club consultants by phone, he got a favorable feeling in his gut about Jim Thomas, the founder and president of Fitness Management and Consulting. Thomas has more than 25 years of experience owning, operating and managing health clubs of all sizes. He specializes in management consulting, sales consulting and the marketing of gyms of all sizes.
Thomas devoutly uses methodology he's developed over the years so he can go through a problem-solving process in the most efficient amount of time for his clients.
"The first thing we recommend is that we come in and do a 30-day operational analysis," Thomas explains. "During that process, the client and I get to know each other, and based on that chemistry and the information that's provided, we make a mutual decision about whether to move forward or not."
The initial phase gave Walker the confidence to bring Thomas in.
The starting point of the solution was to institute new systems and procedures that were previously nonexistent.
"Jim makes sure everything is trackedůmakes sure the front-desk [employees] are not getting sloppy," Walker says. "If you don't track it, you don't know where you're going or what you're doing. Everything from sign-in sheets, day-to-day paperwork, the closing sheet, job description sheets—especially job descriptions—eight to nine pages of what their duties are and what we expect."
Successful clubs must have a solid foundation in place.
"You see, you can have the nicest club, but if you don't have the right systems, you won't sell the needed amount of memberships," Walker says. "There are no gimmicks that make up for great staff, their skills and their abilities."
The next step was to address marketing. You can't sell memberships unless a flow of prospects are coming through the door. And, according to Thomas, the only way to do that is by regular and consistent advertising.
"The first thing Jim said, 'It's your lack of consistency with advertising; you're hitting it hard here and there, but you're not consistent every month,'" Walker recalls.
However, Thomas did not raise the marketing budget a single penny, he just wanted to squeeze more out the existing one and spread it out so there was effort each and every month. Sales goals are a lot easier to hit if clubs break it down to monthly figures and support that effort through proper marketing.
One of the most effective marketing vehicles for gyms is direct mail. Though the club's past mailers were attractive and grammatically correct, they weren't motivating prospects to go out into the cold and come visit the club.
With a little critical "wordsmithing," Thomas vastly increased the effectiveness of the mailer and got far more prospects through the door and correspondingly onto the member roster.
- 20,000 square feet
- 12 personal trainers with 700 to 800 personal-training sessions per month
- Private personal-training room
- Dedicated Spinning room
- Two group-fitness rooms
- Showcase dealer for FreeMotion fitness equipment
- Nutritional counseling
- Cardio Theater on equipment
- Private-label nutritional supplements
- Massage therapy
- Tanning beds
- Smoothie and espresso bar
- Leased-out martial arts dojo
Converting prospects to members
Once prospects started coming in the door, the next critical step was to turn them into members. This is where the rubber meets the road. Diligent use of detailed guest profiles, a vastly improved tour and script, and the value-added message by knowing the club's unique selling position were the new success components.
"There is a specific reason why that prospect came through your door," Thomas says. "It's important not to give a canned sales pitch but to ask enough questions to understand their true motivation, only then can you present your value-added proposition to win the sale."
As bad timing would have it, the club didn't have a sales manager in place, and since it was mid-season, it was no time for a hasty search. So, how did they sell memberships without a sales manager?
Thomas advised using existing resources. That is, to upgrade the existing front-desk personnel by teaching them how to sell properly. But it's also important to not just give them another task that they didn't originally sign up for. They have to truly "buy into the program" and be compensated accordingly.
An incentive formula was instituted to motivate the front-desk staff to sell. The staff consisted mostly of college students, who previously never had sold anything in their lives. With a little motivation and training, they soon were completing sales cycles totally on their own, and bookings started to rapidly improve.
Sales that stick
How did the adjustments work out?
"In January of this year, there was a 37 percent improvement in business," Walker reports. "February and March were up close to 30 percent. The majority of that is based on Jim."
And that's not all.
"But besides the improved sales performance, another big factor is that with the new scripts and procedures, there are no 'headache sales,' no contractual problems, and that is a big plus to the owner and the GM," Walker says. "I need to make that point clear: It was a better season. Things flowed a lot better."
As Walker plans for next season, he's excited about the prospect (with Thomas's continued help) of finally hiring a competent sales manager that will fit into the organization and make a valuable contribution. He also hopes to wean himself away from so much personal training and start to manage more. The mid-course correction removed a lot of angst and infused a new sense of optimism going forward.