Maximum Performance - Real or Imagined?

Sales and marketing are high priorities for today's service-driven clubs. Professional competition has increased dramatically, and consumer awareness about the benefits of exercise is at an all time high. Club membership sales staff are moving away from high-pressure sales techniques, thanks to consumer education and industry professionalism. This professional shift is a win-win situation for the service-driven club and the prospective member.

The club marketing program is no longer based on misleading or bait-and-switch advertising techniques that were the trademark of attrition-driven clubs. As a result, the leads being generated are more meaningful. More and more clubs are realizing that with "member-referrals" being the number one source of new memberships, it makes great sense to redirect marketing dollars to stronger membership based promotional venues. The days of shotgun external expenditures are fading fast!

The "attrition-driven" club's central goal is still designed to sell memberships only to obtain the member's initial binding financial commitment. High-pressure sales techniques and deceptive advertising and promotion with minimal ongoing services are identifying characteristics of attrition-driven clubs.

The "service-driven" club represents an ethical business concentrating on generating value commensurate with both initial investment and the member's ongoing investment. Consultative selling with results-oriented programming are common characteristics of service-driven clubs.

However, many service-driven clubs unwittingly lose income through systems that are too lax. Furthermore, inadequate understanding of lost revenues causes many clubs to think that their system is "pro-consumer".

In today's competitive marketplace, every service-driven club that wants to gain or maintain strong market share must engage an effective, 100-percent quantifiable sales and marketing system. Each dollar spent for advertising and promotion must be accounted for in terms of total traffic generated. Each prospect response to the dollars spent (membership telephone inquiries or walk-in prospects) must also be tracked individually at 100-percent efficiency to maximize revenue potential.

Additionally, retention-based point-of-sale programs must be fully tracked to maximize club revenues. These point-of-sale programs are designed to effectively integrate the new club member into a regular exercise regimen, and motivate that member enough to renew the membership and stay with the club.

Following are seven critical areas that can help clubs avoid losing revenue:

The lost call

The lost call refers to membership telephone inquiries that are lost as a result of a lapse in communication between the front desk staff and the membership sales staff.

There are many ways in which a telephone inquiry can become a lost call. For example:

1) The caller is on hold too long, hangs up and calls the next club on their list.

2) There is no membership staff person available and the front desk staff person simply tells the caller to try again later.

3) There is no membership staff person available and the front desk person takes a name and phone number. This information gets passed along to the next available membership staff person who does not return the call immediately, and the information gets lost. For most clubs, it is safe to say that, on average, one membership telephone inquiry gets lost each day.

The average month is 30 days. If the club averages one lost call per day, then 30 calls a month are lost. Using an 80 percent phone call-to-appointment ratio shows that the club is losing 24 appointment opportunities per month.

Using a 70 percent appointment-to-show ratio means that the club is losing 17 appointment tours per month.

Using a 70 percent first-time closing presentation ratio for appointment shows means that the club is losing 12 new membership sales per month.

Based on an average annual membership cost of $500, a club is losing $6,000 in new membership sales per month. Multiply this times 12 months, and you can see that the club is losing $72,000 per year in potential new membership sales.

Without a 100-percent quantifiable system, and a good initial and ongoing training program for the front desk staff and the membership sales staff, this income will continue to be lost.

Telephone inquiry-to-appointment efficiency

Telephone inquiry efficiency is the second critical area that can bolster club income. Many clubs do not track this information accurately, leaving the membership sales staff unclear about their level of efficiency and possibly under the false impression that they are excelling. Accurate tracking ensures reality-based performance.

When tracked properly, telephone inquiry-to-appointment efficiency can result in significantly increased revenues from the sale of new memberships.

Let's use an average of 120 incoming telephone inquiries per month, with an average annual membership cost of $500.

Begin with a 50 percent incoming membership telephone call-to-appointment ratio (IC/AT) effectiveness (common among clubs that do not track accurately), and progresses to where each club should be, which is 80 percent.

The difference between capturing 50 percent versus 80 percent of people who call for information about your facility is $108,000 per year, with zero additional expenditure on your part. Each five percent improvement in this scenario yields about $18,000 in revenue.

Appointment-to-show ratios

The next critical area, appointment-to-show ratios, has been demonstrated above. It is crucial to track appointment-to-show ratios accurately, because even if your staff is performing at an 80 percent IC/AT ratio, it's meaningless if only a small percentage of people actually keep their appointment.

First-time closing presentation efficiency

First-time closing presentations are one of the most misunderstood and most important aspects of membership sales. The amount of additional membership revenue that can be generated through professional, non-threatening techniques is tremendous. Unfortunately, most clubs do not track the closing process accurately, if at all.

The following example will demonstrate that consistent, professional closing within a quantifiable system can generate an additional $216,000.00 per year, without spending any additional money.

Example: 180 prospects per month

Average annual membership = $500

(Key: FTCP = First time closing percentage)

180 prospects per month @ 50 percent FTCP = 90 new sales per month

90 new sales per month @ $500 = $45,000 per month x 12 months = $540,000 per year

The following increase occurs as a result of reality-based performance (the above as a result of fantasy based performance)

180 prospects per month @ 70 percent FTCP = 126 new sales per month

126 new sales per month @ $500 = $63,000 per month x 12 months = $756,000 per year

Be-back efficiency

The expression "be-back" refers to prospects who are interested but unwilling to join on their first visit. They usually tell the membership staff person that they will be back to join.

Most clubs do not track this number; the fact is that 90 percent of all clubs have only a 15 to 20 percent actual be-back-to-join ratio. This also highlights the importance of first-time closing presentation efficiency.

The be-back numbers are as follows.

Example: 50 "be-backs" for 60 days

Average annual membership = $500

(Key = RTJ = return to join; DNR = did not return)

50 "be-backs" @ 16 percent RTJ = 8 new sales

8 new sales @ $500 = $4,000 net gain club revenues

50 "be-backs" @ 84 percent DNR = 42 lost sales

42 Lost Sales @ $500 = $21,000 net loss club revenues

If out of 50 people who said they would be back, only 16 percent of them return to the club, and 84 percent do not, this means 42 lost sales. Forty-two lost sales at $500 each represents a $21,000 net loss in revenue for your club. Therefore, even though "be-back" percentages are very low, you can see that to attain the highest number of sales possible from this source, these prospects must still be followed up.

Point-of-sale referral efficiency

Most clubs derive the highest percentage of new memberships from member referrals. This is true even though most clubs have little if any ongoing point-of-sale referral programming. The most likely time for a member to excite their friends about something is when it's new and exciting. Furthermore, a certain percentage of new members never get fully involved in their membership and their help in recruiting new members is lost. Therefore, both the club and the new member lose, since the member will most likely not achieve his/her fitness goals.

When clubs realize the impact that even a good point-of-sale referral program can have in terms of increased annual revenues, it becomes important to implement a program and, of course, use a quantifiable tracking system.

The point-of-sale referral efficiency uses only a simple program, with a simple goal of only one referral name for every two new members. The example is based on 130 new members per month with an average annual membership cost of $500. The ratios vary slightly from non-referral types of leads. For example, the appointment-to-show ratio is higher, because a member has referred the prospect. Another example is the appointment show-to-appointment close ratio. For member-referred leads, the closing ratio is slightly lower, as the membership sales person should be very low-key with these prospects. The referring member will do much of the selling themselves.

The bottom line is that an additional 21 membership sales per month can increase your club's revenue by a surprising $126,000 with zero additional expenditure on your part.
Point-of-sale retention-based programming

Many clubs create superb retention-based programs that are designed to get the new member active with regular exercise at the point-of-sale, but if the programs are not monitored, they are not as effective as they could and should be.

All clubs should use multi-level, point-of-sale member integration programs for all new members. This helps eliminate singular focus mentality for regular exercisers, and creates several exercise options for the new club member. The critical period for new members, especially non-exercisers, is the first 60 days of the membership. If during this period the new member does not get motivated enough to exercise, then the new member will fail in their desire to attain their goals, and the chance of them renewing or referring other members is slim.

Controlling attrition represents a potential of hundreds of thousands of dollars in increased annual revenues for most clubs. A 2000-member club must sell only 800 new memberships every year, or only 67 new memberships every month to maintain a zero percent annual growth rate when attrition is 40 percent. Decreasing attrition from 50 to 40 percent retains 200 more members per year. If the average annual membership cost is $500, then your club retains an additional $100,000 per year that could be lost in memberships, with no additional advertising or promotion -- not counting any improvement in the area of regular new membership sales growth.

Use the above suggestions to enable your staff to track 100 percent of the information mentioned here, and watch your profit margin grow.

Yours in Success and Motivation,

Geoff Hampton

Want to power up your staff teams performance? Try this great new Coaching program:

Program Length – Six Months

Program Cost:

One Time Registration Fee $150

Monthly Continuation Fee - * $350* Offer available through November 15, 2009. As of November 15, 2009 the Monthly Continuation Fee goes to the standard $500.

Who are a few health & wellness businesses who have used Geoff Hampton to enhance their maximum performance potential?

Recent On-Site Staff Educational & Motivational Staff Training Programs:

* Augusta Regional Hospital – Lifetime Health & Fitness Center- Fishersville, VA – Contact: Eric Good or Olivia Hall

* The Wellness Center of URMC - Thomaston, GA - Contact: Denis Tallini or Carla Clayton

* The Westmoreland Athletic Club - Greensburg, PA - Contact: Dennis Doyle

* Culpeper Regional Hospital – Powell Wellness Center - Culpeper, VA – Contact: Sandy Boone

* University Health Care System – Health Central - Augusta, GA – Contact: Cindy Stephens or Claude Thompson

* And more!

How strong are Geoff Hampton’s unique and powerful training programs?

“The staff training seminar that Geoff Hampton of Club Marketing Resources International presented for both of our clubs was one of the most informative and beneficial events that we have had the pleasure of experiencing. In hearing the staff discuss it the following day the terms “Fantastic and Great” were frequently used. I would be more than happy to talk with anyone that is considering contacting Geoff.” Dennis L. Doyle - President of the Westmoreland Athletic Club, Inc. and Galaxy Fitness, Inc.

Recent Professional Presentation:

KEYNOTE – MACMA Annual Conference (Mid Atlantic Club Managers Association)

"Geoff received outstanding ratings as the Keynote presenter at the Mid-Atlantic Club Management Conference in July, 2009!" - Allison Flatley – Ex Officio

Other highly rated presentations:

2009 SEHFA (Southeastern Hospital Health & Fitness Alliance)2008 MFA (Medical Fitness Association)

2008 NEHRSA (New England Health & Racquet Sportsclub Association) Annual Conference

Don’t miss these upcoming presentations by Geoff Hampton:

*** Medical Fitness Association
15th Annual Conference: Orlando, FL
December 2 – 5, 2009

*** MACMA (Mid Atlantic Club Managers Association)
WEBINAR
December 10, 2009

If you and your staff team want to finish 2009 with an incredible finish and be ready to maximize the 1st Quarter of 2010…learn from the best and make it happen!

Call Today: (865) 281-2422 for additional information!

Or, cell phone - (865) 603-2152.

Or, E-Mail - GeoffLHampton@aol.com