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Entries in CBI Best Practices (8)

Wednesday
Apr262017

Keeping Your Gym's Membership Sales Strong Year-round

The following post was written Amanda Konigsberg, general manager of Active Wellness, for our Best Practices series.

Question: After the January rush, sales quiet down. How can we keep them strong all year long?

Continue reading "Keeping Your Gym's Membership Sales Strong Year-round."

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Wednesday
Dec142016

6 Things to Consider Before Adding a Spa to Your Health Club

The following post was written by April Smith, spa manager at The Ocean Reef Club, for our Best Practices series.

Question: We’re thinking of adding a spa treatment room to our facility. What fundamental things do we need to know in order to create the right atmosphere and ensure the spa’s success?

April Smith: The good news is adding a spa room doesn’t have to be expensive or complex. The main thing to keep in mind is that you want it to be a tranquil, relaxing space that’s comfortable for both the client and the service provider. Here are some important guidelines to consider:

Consideration #1: Size

Many spa rooms are either 10' x 14' or 12' x 14', which translates to 140 to 168 square feet. A typical massage table measures 72" x 30", but a face cradle can add up to 12" to the length.

You’ll need to make sure there’s at least 3' of space around each side of the table, as well as a treatment chair for the service provider. Of course, there should be room for the door of the room to open and close. You’ll also need space for a cabinet to store linens, treatment supplies, a sink with counter space, a comfortable chair for clients to sit on while taking off their shoes, and clothing hooks fastened to the wall.

Consideration #2: Flooring

The best choices include wood, vinyl tile, or cushioned flooring, rather than a hard surface, such as marble or ceramic tile. Keep in mind that your clients will be barefoot, so the floor shouldn’t be cold or slippery. Avoid carpet, as it can be easily stained and is hard to change out. Instead, try a nice, soft area rug that will create a warm feeling, and can be cleaned without difficulty.

Consideration #3: Lighting and décor

Lighting should operate by means of a dimmer, and not be positioned directly above the massage table. If there’s a window, add some kind of window covering or a blackout curtain.

Continue reading "6 Things to Consider Before Adding a Spa to Your Health Club."

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Monday
Nov212016

Best Practices: 4 Financial KPIs to Watch at Your Health Club

The following post was written by John Atwood for our Best Practices series.

Question: As a club operator, I know it’s important to constantly monitor financial data, but there’s so much of it! Which numbers should I scrutinize every month?

That’s a good question. Understanding your business and knowing which metrics to monitor is a must if you’re going to manage and operate at your best. While there are many line items you can review and compare with your budget projections, there are four main key performance indicators (KPIs) that I suggest you study regularly and carefully.

KPI 1: Net Growth of Memberships

I like to call this your “No. 1 key metric.” Many operators are fooled when they look only at new member acquisitions, but don’t realize that there may be a “member leak” trickling out the back door.

It’s essential to take the time to ensure that your retention rate is high, and also take steps to see that it remains that way. For instance, have your staff place “reminder calls” if a particular member doesn’t come in for two weeks; add to and make adjustments to your programs; and hold member appreciation events. Such efforts connect a member to your club in a deeper way.

Your total number of members, of course, includes new and current members minus the dropouts. This metric is virtually impossible to reasonably compare to industry averages, so you should set your own goals and adhere to them. That said, as a general rule, attrition should never exceed 30% per year. The rates at better clubs will be lower.

KPI 2: The Cost of Acquiring New Memberships

The goal is to keep the cost of acquisition to no more than the equivalent of two months’ worth of member dues. We often find that, while clubs are growing their membership base, the expense involved is so high that they don’t break even for up to six months. Creative marketing, strong referral programs, and savvy outreach initiatives all drive membership growth—and, at the same, help reduce the cost.

KPI 3: Ratio of Payroll to Revenues

We’ve found that, in the case of upscale facilities, payroll tends to hover between 38% and 44% of revenues. Multipurpose clubs fall at the higher end of the scale due to extra payroll costs associated with pools, tennis departments, childcare, etc. On the other hand, the percentage is much lower in the case of high-volume/low-priced (HV/LP) operations.

Clubs that exceed 45% should regard this as a red flag and adjust accordingly, unless they’re in the startup phase.

KPI 4: Nondues Revenues as a Percentage of Overall Revenues

Depending on the kind of club you have, the IHRSA benchmark figure you should shoot for could be as low as 18% or as high as nearly 40%. That said, we believe most clubs should strive for a nondues revenue percentage of not less than 30%.

Profit centers such as massage, personal training, or swim and tennis lessons should have revenue goals that each manager, trainer, tennis pro, and swim coach is held accountable for.

We know of one club company that even has goals for its parking attendants!

In addition to these four gauges, there are several other club-specific KPIs that should be tracked monthly. IHRSA offers the IHRSA Financial Management Tool, which can be used to forecast and track all KPIs. This comprehensive set of financial spreadsheets has helped countless operators gain control of their business’ performance. The cost is $995 for IHRSA members, and $1,495 for nonmembers. 

John Atwood
Managing Partner
Atwood Consulting Group
Boston, MA 

Tuesday
Nov012016

Best Practices: 4 Ways to Solicit Health Club Member Feedback

The following post was written by Christine Thalwitz for our Best Practices series.

Question: Knowing the importance of listening to members, how should I solicit feedback to improve customer service?

To have a complete picture of your members’ expectations and perceptions, it’s important to make use of feedback.

1. Customer-initiated Communication

Open-ended, customer-driven systems, such as suggestion boxes, Q&A boards, and “open-door” policies are valuable because they allow members to share their thoughts spontaneously, especially when there’s an acute need to respond to them. Of course, it’s also important to make sure that your team members “own” any complaint they hear.

2. Company-prompted Contact 

Focus groups, surveys, and member advisory committees can yield highly focused information that can help you make better strategic decisions. And you can time these interactions to measure particular aspects of various products or services.

3. Unarticulated Feedback 

Also pay attention to your members’ body language, which can express volumes. Sometimes, a warm greeting or a simple apology for an inconvenience may be all that’s needed to smooth things over. It’s also valuable to track other ways that members “vote with their feet,” such as program participation and club attendance.

4. Conversations Outside the Club 

Of course, social media has made it easier than ever for customers to share their opinions. In addition to creating your own presence online, monitor other channels that your customers frequent. Whenever you encounter complaints, consider it an opportunity to respond positively and publicly.

Christine Thalwitz
Vice President of Marketing
ACAC Fitness & Wellness Centers
Charlottesville, VA

Wednesday
Oct262016

Best Practices: How Much Should I Spend on Fitness Equipment? 

The following post was written by Melissa Rodriguez for our Best Practices series.

Question: As an independent health club operator, how much should I spend on each type of equipment each year?

That’s a good question to ask. I’m sure you’re well aware of the important role that equipment plays in attracting and maintaining members. According to The IHRSA Health Club Consumer Report, eight of the top 10 club attractions cited by members are equipment-related.

Facilities responding to IHRSA’s 2015 Equipment Survey—the basis for The IHRSA Health Club Equipment Report—said they spent an average of $84,172 on new fitness equipment in 2015. Specifically, fitness-only clubs spent an average of $92,000, while multipurpose clubs spent $88,000. Nearly half of annual equipment spending (45.9%) was allocated to cardio machines.

It’s also important to note that the top-performing clubs reported spending more on fitness equipment than others in the overall sample. In fact, those clubs ranked in the top 50% in terms of EBITDA (earnings before interest, taxes, depreciation, and amortization), spending an average of $90,655.

In addition, determining the most productive use of a club’s square footage is another critical business decision. Among those responding to the survey, cardio equipment commanded the most space at 20.1%, followed by traditional strength equipment at 15.7%. Group exercise and functional-training areas were allotted 12.1% and 8.2% of the space, respectively.

Finally, The IHRSA Health Club Equipment Report, sponsored by Precor, reported that the average club has 19.2 group cycling bikes, 15.4 treadmills, 11.5 ellipticaltrainers,92 dumbbells, and 12.8 barbells.

Melissa Rodriguez
Senior Research Manager
IHRSA
Boston, MA 

 

 

Thursday
Sep082016

Best Practices: How to Retain Health Club Members When a Popular Instructor Leaves

The following post was written by Christine Thalwitz for our Best Practices series.

Question: How can I retain health club members when a popular exercise instructor leaves?

Christine Thalwitz: First, take steps to ensure a smooth transition. Inform members about pending changes clearly and well in advance. If you plan to retain the class, find a strong replacement, and, if possible, have the new and departing instructors teach together a few times prior to the transition.

Focus members on other exciting club offerings.

Overall, be sure to reward staff teamwork more than personal popularity. Team goals and incentives help instructors understand the big picture. Consider pairing your newer teachers with veterans for mentoring to improve the quality of instruction. Avoid filling your schedule with specialty classes that rely on the expertise of particular leaders.

Encourage members to participate in a wide variety of club activities to help them develop stronger feelings for your brand, and to develop relationships with staff and other members. Special workshops, member socials, and class-launch parties foster camaraderie.

Finally, if instructor turnover is a recurring problem, then organizational issues may be sabotaging staff satisfaction. If you don’t already do so, you should administer employee surveys and conduct exit interviews to gather valuable feedback.

Christine Thalwitz
Vice President of Marketing
ACAC Fitness & Wellness Centers
Charlottesville, VA

Wednesday
Jul272016

Best Practices: Health Club Disaster Recovery Planning

The following post was written by Richard Beddie for our Best Practices series.

Question: Disasters of many kinds can occur anytime and anywhere. What sort of disaster recovery plan should a club have in place? 

Richard Beddie: Responding to a disaster is about setting priorities. The extent of the damage to the club and the regional infrastructure will help determine those.

Your top priority should be your staff—making sure that they feel safe and that their home life is secure. How individuals react will vary, but until your staff feels safe, their ability to aid in the recovery effort will be hindered.

Another important consideration is insurance. Obviously, you should have the appropriate type and level of coverage. So, one important step you can take now, before disaster strikes, is to ask your insurance agent to conduct a thorough review of your insurance—for both typical and atypical catastrophic events.

After all, here in Christchurch, we didn’t know that the city was situated on a “blind” or unknown fault line; that became all too clear when large earthquakes hit in 2010 and then, again, in 2011.

Before beginning any remedial work, take photos of the damage and gather as much evidence as possible. Most clubs insure their physical assets well, but many don’t insure fully for business-interruption losses. You don’t want to discover that your coverage is somehow inadequate—when you need it the most.

Richard Beddie
Chief Executive 
ExerciseNZ 
Christchurch, New Zealand 

Thursday
May262016

Best Practices: Hiring the Best Job Candidates

The following post was written by Lisa Gorsline for our Best Practices series. 

Question: We’re getting too many résumés! How can we identify the best person for the job? 

Lisa Gorsline: At our club, we have a proven system—a seven-step interview process—that eliminates the unqualified employee candidates early on in the interview stage. You may want to omit some of the steps, depending on the size of your club, but we find that this approach works very well for our club.

To start that process, we review all applications and résumés, and then select the individuals who, on paper, seem the most qualified.

We then call them to schedule a telephone interview to be conducted at a later date. During the phone interview, be on the lookout for any red flags:

  • Are they punctual for the interview or not?
  • Do they have a tendency to use slang words?
  • What does their tone of voice convey; is it positive, motivated, and energetic?

We evaluate whether the candidate has used proper English during the course of the interview. And we listen for background noise, if any, and consider the impression it conveys.

These conversations tend to weed out many candidates, so we don’t waste time bringing them in for an in-person meeting. It’s a good way to speed up the overall hiring process.

For us, the next steps are: three in-person interviews; a thorough background check; and, if all goes well, a job for the best candidate.

Lisa Gorsline
President/General Manager
Corpus Christi Athletic Club
Corpus Christi, TX