What Are You Selling?

December 15, 2009

(Warning, this blog entry requires me to sit on a very high horse. When reading it please do not look down )

We all know there is a significant disconnect between what the member thinks s/he is buying, what the club sells, and what the club actually delivers. Today’s blog entry will address some of these disconnections.

What does a club sell? Fitness.
What does the member buy? Fitness.
What does the club deliver? A box with lots and lots of equipment…they sell memberships.

What is the result of this disconnect between what is being sold, what is being bought, and what is actually being delivered? I think there are three specific effects from this:

1. Retention: When a member comes in and buys a membership they are sold on the promise of looking like Brad Pitt (or Angelina Jolie). The reality is that to get to that point it takes hard work and dedication. We can argue that the members should know that by simply coming in once or twice they aren’t going to see results, unfortunately we set the expectation based on how we sold the membership! The result is that the member comes in a few times and more often than not they stop showing up and at the end of their contract they don’t renew.
2. ARM (Additional Revenue per Member): This is a metric that I like…essentially members who are not happy or not seeing results DON’T spend money in your club! (Again one of the reasons they don’t spend money is because they don’t come in). Ultimately people who come in AND spend additional dollars on PT, locks, socks, or batteries are better members, longer term members, and most importantly more profitable members!
3. Referrals: For us as a company, the vast majority of our sales are to clubs that have been referred to us from existing clients who use our club management software. It’s not uncommon to start a conversation with a prospect with, “Yes we do provide software to Equinox!” For us the path of least resistance to growth is referrals. The same is true for you. And let me tell you something, members who are not happy are not telling their friends and family to join!

So what’s the problem?
At the source, its YOU! I know that’s not a popular thing to say, and it certainly doesn’t help in sales but somebody needs to say it.

This is the part that I get up on my high horse and can start my preachin’! At some point, we as an industry have to make a change in our thinking. Selling memberships is about short-term gain. Selling fitness AND providing fitness is about long-term growth for your gym. Everybody struggles with having a good balance between short-term tactical options, and long-term strategic decisions (make note that I use options and decisions) and g-d-knows we have all had to do things to meet payroll, pay the gas bill, or buy new equipment but at some point its ok to say I need to invest in my business.

I’ve made this point before, sometimes you just have to fire a member, or not sell to them in the first place. At the end of the day if someone isn’t a good fit for you, your gym, and the existing members, you owe it to all the parties to say you would be better off going across the street to XYZ Gym! I know for me this was very difficult to understand. How could a dollar made not equal a dollar earned??!!