The International Health, Racquet & Sportsclub Association is the fitness industry's only global trade association representing over 10,000 for profit health and fitness facilities and over 600 supplier companies in 75 countries.

 

 



From educational tools and events to promotional programs and public policy initiatives, IHRSA brings you success... by association!

Join | Renew
Pledge Your Support

 
Search IHRSA Blog

Welcome to the IHRSA Blog

The Online Home of IHRSA.org news.

Blog Home |  Subscribe to our RSS Feed

Entries in member acquisition (10)

Wednesday
Oct052016

German Fitness Studio Uses Data to Drive Innovation and Membership

To those of us who aren’t mathematically inclined, the prospect of working with data isn’t exactly appealing. But, when done strategically, data collection and analysis will begin to tell a valuable story for health club owners and operators. 

When Mrs. Sporty, a fitness studio chain in Germany, took a hard look at its membership data a few years back they noticed a striking change. 

“The previously homogenous target group of plus-50 women, which had been a niche for decades, changed to a diverse mass market,” says Mrs. Sporty CEO Valerie Bönström. “We understood from the data that we have to change and adapt our product—otherwise our target group would choose something else. The needs of our target group changed and so we did. When you focus on the needs of your customers you will constantly innovate—if you don’t, you die.” 

To adapt to its new target group, Mrs. Sporty transitioned from hydraulic machines to pixformance, which offers a fully individual functional workout for each woman. 

“Exercises are shown on a screen and feedback is given from the machine,” Bönström says. “It allows 100% goal focus.” 

Bönström will share her expert advice in her IHRSA European Congress session, “Innovation by Collecting & Analysing Data to Win Members Long-Term.” Her presentation, held Thursday, October 18, in Seville, Spain, will help attendees:  

  • Determine which data you have and what you will need to obtain.
  • Discover whether you know the patterns of behavior and needs of your customers.
  • Learn how to deliver what they want to have by innovation.
  • Identify controlling numbers to avoid missing when customer needs or behaviors change.
  • Gain insight on why to never stop questioning your business model.  

“An easy example of how to use data in a simple way is, if you know when members change their pattern of how frequently they visit the gym, you can already predict three months ahead when they will potentially cancel,” she says. “So data allows you to act before the member even knows them self that they might cancel. That is proven statistics and really a big win for the fitness industry.” 

Learn more about the IHRSA European Congress, October 17-20 in Seville, Spain. 

Wednesday
Apr132016

Fitness Reimbursement Programs Create Membership Opportunities for Health Clubs

Over the last few years, insurance reimbursement programs have gained traction across the fitness industry, with many health clubs partnering with insurance providers to reward their members for being regular visitors. But, because this marketplace is still emerging, there are a number of questions that remain unanswered, and navigating this new landscape has proven to be difficult. 

Last month at IHRSA 2016 in Orlando, FL, a panel of experts, including Vince Pozinski of Optum, Heidi Holliday of Healthy Contributions, and Ray O'Connor of the Wisconsin Athletic Club, answered questions and provided the following advice to attendees during the session, “Healthy Benefits: Fitness Reimbursements in the Insurance Marketplace.” 

These programs create new membership opportunities. 

Internal data from Optum was conducted over the course of a two-year period and yielded the following results:  

  • About 20% of people who enrolled in one of these fitness reimbursement programs had not had a gym membership before they enrolled.
  • 50% of participants said that being part of a program played a large role in them having a gym membership.
  • 50-60% of participants said that having to meet a certain threshold (e.g. days in a month, number of times per week, etc.) meant that they went to the gym more frequently than they would’ve had they not been enrolled in the program.    

Insurance reimbursement programs have health benefits for those who participate, but members will not enroll in a program unless they are aware of all the options that are available to them. 

Most often, direct marketing is used to educate prospective members on the proven benefits of joining an insurance reimbursement program, and this channel of open and consistent communication holds the key to gaining new members and retaining old ones. 

It is important to note that if changes are ever made to specific insurance packages, make sure that your insurance provider clearly communicates these changes to your staff. Having this system in place will avoid confusion and potential frustration from program participants who were not informed of updates. 

There are still challenges that must be met and overcome. 

Keeping records is still a manual process, and even though this is true, insurers and information processors have been working to make this system as stream-lined as possible to accurately monitor how many times participants are visiting clubs. And as technology has progressed, processors have done their best to keep up with it to ensure that club operators stay out of back rooms and remain out on club floors. 

Finding program information can be difficult. Accessing program information has been a large hurdle for clubs looking to partner and work with insurance providers. So, if you don’t know where to begin, you are not alone.   

Start by finding out who administers theses programs and contact them for more information. Additionally, companies such as Vanco and Healthy Contributions are able to share eligibility data and member enrollment based on the location of specific programs. And as always, IHRSA is available to answer any questions you may have, so do not hesitate to contact us at gr@ihrsa.org about programs that are being offered in your community. 

 “These challenges create a moving target, but the target is moving in the right direction,” Holliday said.

Monday
Feb032014

Keep members coming despite busy times

Even though the holiday season has passed us, there is always next year. And, it creeps up quickly and before you know it we are only weeks away. Plus, planning for programs, deals and events starts months before.

This week's Best Practices question looks into how to keep members coming to the club during the busy times that runs from weeks before Halloween until just after New Year's.

Q: How do you keep members coming to your club during the busy holiday season?

Sisters Athletic Club is a little bit unique in that it’s located in a popular tourist spot with lots of ski resorts and winter activities. Our regular club members actually come in and work out very consistently throughout the holiday season. Many of them have friends and relatives visit their homes during this time, so we run a popular special, called “Guest Express,” which allows members to bring guests to the club for just $8 per day instead of the standard guest rate of $15 per day.

Tate Metcalf
Owner/General Manager
Sisters Athletic Club
Sisters, Ore.


A: We begin our holiday season in November by adding a "Lean 16" program to our fitness offerings. Created for those who have existing weight concerns, the activity is designed to help participants lose 1.5 pounds per week during the program's 16-week schedule. Members are given coded ID numbers which are displayed on a large graph, and daily competition is designed to create both fun and motivation. With registration in early November and the program being linked to a 16-week goal, "Lean 16" not only addresses client needs, but serves to increase the company's membership roles during the two most difficult months of the business year.

Gina Deese
Owner
A.C.T. By Deese, Inc.
Greensboro, N.C.


A: One of the ways in which the Rochester Athletic Club has engaged our members to keep them working out during the holiday season is by offering special group exercise schedules during the holidays. We are also discussing a new “holiday bundle” that will include a personal training session, a Pilates personal training session, a massage, and a diet consult. Last year, we hosted “Pink Monday” (after “Black Friday”), which included retail discounts, a trunk show, free chair massages, makeovers, and refreshments. It was a great way to showcase all we offer to our members and the community.

Matthew J. Remick
President
Rochester Athletic Club
Rochester, Minn.

Tuesday
Feb192013

“I’ll Be the Judge, I’ll be the Jury” *

© jackmicro - Fotolia.comMany of us tend to judge others instinctively, automatically—it’s just human nature—a practice that may, or may not, be appropriate or productive. But, to stand in front of a mirror and take honest stock of oneself—that can be both revealing and rewarding … particularly when a person considers how well they’re running their business! CBI Unbound guest contributor Hossein Noshirvani, of Motionsoft, Inc., thinks club operators have much to answer for with respect to how effectively they’re utilizing technology. Read more:

Click to read more ...

Monday
Nov262012

Corporate memberships at your club is more than offering a good deal

Mike James and Vaughn Marxhausen, two veterans of the fitness industry, are great resources for this week's, Best Practice question about growing corporate memberships at a club.

Q. "We are trying to grow the number of corporate memberships at our club.  Do you have any suggestions for how to grow corporate accounts?"

A. 

Mike James
General Manager
The World Bank Fitness Center
mjames1@worldbank.org

A: While companies are looking for the best deal (discount on membership), keep in mind, it’s not always just about discounting your membership. Other clubs may be able to give them a better rate, but will they be able to deliver wellness programming the company is seeking?

Growing your corporate membership takes on many factors, here are a few key strategies to keep in mind:

  • Obtain a list of companies in your area, find out their employee demographics and company culture.
  • What is their wellness initiative, do they even have one? Do they have a wellness/fitness culture? Is there support at the top?
  • Know who to talk to. Make sure you are you talking to the right person who will be able to make decisions.
  • Come up with a plan before you meet with them. What programs do you offer? What is your price point, are you willing to discount? Are you able to deliver what they want such as a lunch’n’learn, wellness programs, employee tracking, etc.? Knowing what you are able to deliver will allow you to know if it is a fit or not. 

Going beyond the discount and being able to offer companies a return on their investment should be the reason for working with companies. Companies that are able to see a savings on their health care costs, an increase in productivity, high employee morale, along with many other benefits will determine if the company will want to work with you and continue to work with you.  

While it may seem easy to just offer a company a discount and reap the rewards of employees joining, there is a reality to working with companies; here are just a few things to consider:

  • HR Directors are busy doing “their job” and getting the word out about joining your club to their employees may not be at the top of their “to do list.” Make the process easy for them. You may have to work with their assistant or someone else to keep the communication going between you and their employees.
  • If the company is going to subsidize the membership dues, this takes time so be prepared.  Nationwide companies may have to get approval from the corporate office (depending on the size of the company). Employees will wait to join till they find out “what the company is going to do.”
  • Companies may want you to be able to provide reports: attendance, fitness tracking, current verses cancelled members, etc. Are you set up to do so?
  • Someone else will give the company a bigger discount than you are able to give. What is your differentiation that separates you from the other clubs? 

Vaughn Marxhausen
Area Director
Houstonian Lite Health Clubs
vmarxhausen@houstonianlite.com

 

Editor’s Note: One of the most frequently consulted sections of IHRSA’s Website, ihrsa.org, is “Best Practice,” which features answers from industry experts to a wide range of thought-provoking questions. Beginning this month, we’ll highlight some of them in this new CBI column.

Visit ihrsa.org/bestpractices to read responses to more than 100 questions such as these or to submit a question of your own to be answered.

Monday
Jan232012

What do you do to attract members to your club who feel self conscious while working out?  

Karen Jashinsky, Nicki Anderson and Phil Wendel discuss what do you do to attract members to your club who feel self conscious while working out in this week's Best Practices

Q: "How do health clubs handle obese members who feel self conscious while working out in public?  What do you do to attract these members to your club?”   

A: I think the key is to make the member feel comfortable and to recognize that it might not happen right away. The more information the club has before the customer shows up, the more they can help this potential member. We connect them with someone that makes them feel comfortable and also help them get started without feeling like they are being judged. To really make a lasting impact, it is important to get them started quickly but not put emphasis on getting a scale from the get go.  We work closely with our clients so they are comfortable with their workout building their confidence so they never feel self-conscious at the gym. We insure they understand the fundamentals of the program we create with them always reminding them their fitness goals are a process not perfection

Karen Jashinsky
Founder/CEO
O2 Max Fitness 

A: I have said for years that Health Clubs tend to turn away the exact people they need to attract. I believe that is why small boutique studios are doing well, they are attracting those that feel self-conscious in larger settings. I have a studio with all private rooms to accommodate those that have had a bad experience at a gym. This population needs to feel valued. In a larger setting, they tend to get lost and feel like a face in a crowd. I’m sure there are some clubs that “get it” but for the most part, larger health clubs are still falling short of creating programs that not only attract, but retain this population. New Year’s is a perfect opportunity to create a retention program for those hoping to actually stick with their resolutions. Imagine if larger facilities created a “Buddy system” or a mentoring program that could take these clients (who typically drop off in a month) and actually retain them. It is programming and customer service that’s seems to be lacking in some larger facilities.

Nicki Anderson, AFP, CPT
Reality Fitness

 

A: Let's begin with this premise:  65% of Americans are overweight and half of those, around 32% are obese.  If that type of individual wasn't welcomed, didn't feel comfortable, you would be virtually eliminating two-thirds of your potential market. 

Now some specifics:

  1. Hire some staff that look like 'overweight individuals'...they can be trainers, front desk people, salespeople, etc.
  2. Provide encouragement, especially from the Fitness Team....make sure you fitness team spends as much time with these individuals, if not more, than the already fit individuals that frequent your club

Summary:  if you truly want to grow your membership, make sure that your welcome mat is broader than those individuals that are already very fit! 

Phil Wendel
Owner
ACAC Fitness & Wellness Centers

 ### 

This post is a part of our weekly Best Practices series. We post a new question and answer every Monday morning. If you have a question you'd like our Industry Leaders to answer, submit your question today.

Monday
Sep122011

Gain Members by Rethinking Your Club's Hours

(Photo: Roby Ferrari)
Joe Cirulli, Barry Klein and Brad Wilkins discuss how to determine your club's hours in this week's Best Practices.

Q: "With a lot of 24 hour gyms moving into the neighborhood, we're revisiting the subject of hours. Other than choosing some arbitrary numbers, how can we make an informed decision based on potential usage about what our hours should be?"

A: We changed our hours to 24/7 a number of years ago for three reasons:

  1. We wanted to make using our facilities as easy as possible. 
  2. We literally wanted to remove the “I don’t have time objection.” 
  3. The impact on our expense.  

Before we made the decision we closed at 11 PM and reopened at 5 AM. We had cleaning crews in the center for most of those hours therefore the impact on our utility bill would be minimal. We also knew we would only need a small staff.

When we added it all up it made sense for us to make the change. The hours between 1 AM and 4 AM are a relatively quiet time but once again the value is made up on the sales side by removing one of the major objections to joining.

Joe Cirulli, President & Owner
Gainesville Health & Fitness Center
jcirulli@ghfc.com
www.ghfc.com

A: Choosing hours is a chicken-and-egg problem because you don’t want to be open when nobody cares, but you if you’re not open at the right times then you will lose business.

Faced with 24 hour competition, assume you have to be open 7 days a week with contiguous hours every day (which is still not the case for many boutique clubs.) Your members and prospects will guide you regarding specifics. If you open at 6am with members waiting at your door, then you might try opening at 5am. If you are kicking people out when you close,then it might make sense to stay open later. If prospects are not joining because of your hours or members are quitting because of them then you also likely need to respond.

Also keep in mind: 1) you need first-hand feedback to make changes to your hours. Do not take the word of the member who tells you “lots of people would join” if you added hours. 2) Add hours carefully because it is much harder to take them away. When adding, perhaps position it as a “trial” so that you can experiment because once hours become permanent it sends a negative message if you have to scale back.

Barry Klein, Owner
Elevations Health Club
barry@elevationshealthclub.com
www.elevationshealthclub.com

A: No matter what size club you operate, or market segment you serve, we’ve all come across situations where we felt pressure to change our operations (whether it be hours of operations, amenities offered, children’s hours, program offerings, etc…)  due to either direct or indirect influences of our competitors.  Every time that I come across this situation, I find that is extremely helpful to first take a step back and revisit the strategic positioning of the business.  Therefore, I will spend time reviewing the club’s vision, mission, directional goals, and value proposition.  I do this to avoid any impulse decision making.    

If you feel comfortable with your club’s strategic positioning in the market place, then my next recommendation would be to do a proper analysis (mini business plan) to measure the direct impact of the proposed change(s).  This would include, but is not limited to, consumer/member research, a “true” competitors’ analysis, and a detailed financial cost-benefit analysis.  The use of this type of analytical information in conjunction with your strategic positioning should provide you the answers you are looking for.

All in all, the best way to mitigate risk and to make good sound business decisions is to gather the facts, create a plan, and execute the plan.

Brad Wilkins, Vice President & General Mgr.
Cooper Fitness Center
bwilkins@cooperfitnesscenter.com
www.cooperfitnesscenter.com

Monday
Apr262010

Retention Basics

Bob & Jolyn Esquerre discuss the basics of retention:

Q: “What are the best practices regarding member initiation? How can we make sure our new members stay for a long time?”

A: Why is it that after 25+/- years of trying to fix the membership attrition problems within the fitness industry, we are still experiencing a membership attrition rate of between 35% to 45%? Our initial answer, no one’s job had depended on successfully integrating members into our clubs. Our 2nd answer, the 2009 recession and the slower recovery that is compounded by a high unemployment rate, is now forcing our industry to take a much harder look at (1) what hasn't worked; (2) what is still not working and (3) the need to come up with a Plan "B" that has options that have never been tried before.

If they are engaged & integrated, they will stay.

The 2010 Plan “B” must have four (4) interrelated objectives in order to achieve sustainable profits: (1) the creation of a valued-added environment that will attract new members; (2) have the ability to consistently provide value-added services and/or programs that create member-specific reasons for them to stay at the club; (3) have employees who have a vested interest [i.e. keeping their jobs] in managing the member experience so that these members can simultaneously get results and have a great experience; and (4) be able to quantify, package and market the member-specific results so that they can used to manage the increase in member referrals from "happy", "satisfied" members.

Our 2010 Plan "B": The Concept of Programmed Training [PT4] As a membership retention concept, PT4 (1) requires the repositioning of Club Programming as a comprehensive business platform that is able to seamlessly support the member experience, and (2) requires the club's fitness team to both deliver and manage the member experiences. Under PT4, the member experiences include the following four integrated programming options:

  1. Fitness Floor Programming
  2. Group Exercise Programming [Non-Fee Based]
  3. Personal Training Programming [Fee-Based One-on-One Services]; and
  4. Both Small [2 to 8] & Large Group [>8 to 20] Training Programs [Fee-Based].

The ultimate job for the fitness team members is to seamlessly move the members through each of the club's four programming centers so that each member can achieve their individual goals.

If they are engaged & integrated, they will stay. If they get results, they will stay. If they are happy, they will refer pre-qualified non-members to share their positive experiences with.

Bob & Jolyn Esquerre
Esquerre Fitness Group International
Business Solutions Consultants
esquerre1@aol.com

Monday
Apr122010

Training: Paid or Free?

Bill McBride, Scott Lewandowski, Geoff Dyer, and Brad Wilkins clarify a conundrum submitted by one reader who asks, If retention in mission critical, why make people pay for even the most basic level of one-on-one training?

Q: “If it costs far more to attract new members than it does to retain existing ones, why do most large health club chains emphasize on sales and closing techniques rather than on retaining clients through provision of cost free floor trainers? Most, if not all clubs are based on a paid-training model, but this ought to be part of the membership fee. Why the contradiction?”

A: Member retention is the bedrock of success. If your club keeps its membership engaged, delighted and progressing with results, it does better in all other areas – sales, ancillary revenue, referrals, community awareness, etc.

...sales and attracting new market segments is crucial to success.
The industry focuses on sales as a large number of members quit due to somewhat “uncontrollable” factors such as relocation, illness, injury, personal issues & financial hardship. An analogy is saving money – retention is the saving money & sales is the future earning potential. While we all like to save, without future income, many of us would spend through our savings and become broke. Sales is the growth engine. As our industry is still not attracting the vast majority of the population, with many mature clubs battling to sell more than their losses each month, sales and attracting new market segments is crucial to success.

Some clubs do indeed use an “included service” model – typically charging a lot more per month or somewhat more with a limited number of sessions allotted per month. Some allow the sessions to accumulate and some are “use it or lose it.” The right business model for a particular club is one that works for the business and the clientele. To run a multimillion dollar club at a relatively low price point and include highly educated service trainers for free is a challenged business model for many. Others that have free training and pay training struggle with two “silos” and a very confused membership base… Why pay when I can get it for free? As well as, what is the difference in qualification and service levels?

I do not believe there is necessarily a right or wrong approach with the various models, but I am of the personal opinion that regardless of your model, your members should be started properly on their journey and be able to get advice and support when needed as part of their membership. With that said, I would not offer on-going “free” personal training if you are offering fee based personal training (at the same dues rate) as this confuses two separate business models in the consumer’s eyes.

Differentiating what is included in the membership and what is an extra or enhanced service should be well thought out and articulated.

Mr. Bill McBride, Chief Operating Officer
Club One, Inc.
bill.mcbride@clubone.com
ClubOne.com

A: For a health club to be successful, the management must focus equally on membership sales and membership retention. Membership sales will continue to be a focus of a health club regardless of the club’s retention efforts.

Retention should not be the sole responsibility of the fitness department.
I recommend a cost free floor trainer such as a Fitness Specialist who offers fitness suggestions, coordinates fitness programming, and demonstrates new equipment. Health club owners decide not to create this position because it is an additional salary and prefer to use Personal Trainers who earn commission on paid sessions to service the members on the floor while prospecting for new clients. I agree that Personal Trainers should be interacting with members on the fitness floor to solicit new business. The dilemma is who is responsible to service members on the floor when a trainer is conducting a paid session. In the end, both scenarios have been successful for health clubs.

I would note that the fitness team is only a piece of the retention plan. Retention should not be the sole responsibility of the fitness department. The General Manager, along with his or her department heads, should outline each department’s responsibility in enhancing the member experience. This will create the most successful retention plan for club success.

Scott Lewandowski, Regional GM/Fitness Director
Fitness Formula Clubs
sl@ffc.com
www.ffc.com

A: All clubs focus attention on sales, it is the lifeblood of our industry.

Member retention is AS IMPORTANT as new member sales but not all clubs track their retention or measure the activities that impact the retention of their members.

To acquire a new member there is a marketing expense and a sales expense or commission. Most of the time these two costs added together equal $100 or more.

After the new member has joined every month that the new member stays will add bottom line revenue, after the acquisition cost has been recovered!

Members will stay longer if they are actively using the club, if they are properly oriented in to the club, if they “connect” with both staff and with members…the list of retention tools at our disposal is enormous.

Providing trainers on the floor to offer advice will help, as will providing orientation clinics, or 2-3 sessions with a trainer to show the new member how to use the club and its programs and equipment. The first objective is to focus as much time and attention to member retention as we do to new member sales. It will then be easier to prioritize which retention tools will work in your organization.

Geoff Dyer, Founder
Lifestyle Family Fitness
gdyer@lff.com
www.lff.com

A: You have asked some great questions about this wonderful industry we work in. And to answer this type of question it is sometimes a good idea to take a step back to observe the industry from a global perspective.

The first thing to realize is that it is a large industry. In the US alone there are approximately 30,000 fitness facilities. This includes everything from recreational centers, to large chains, to small chains, to “mom-and-pop” shops, to publicly traded companies, and everything else in between. These facilities can range in sizes from a couple thousand square feet to well over a hundred thousand square feet…with fee structures ranging from a few dollars per month to well over a hundred dollars per month. The point on this quick view of the industry is to show that there are a lot of different business models out there in the industry, with different strategies and goals…and this is why the contradictions you mentioned in your question seem to exist.

So, is member retention important? Yes it is. Do you need to manage your attrition rate? Yes you do. To what degree or effort do you attack it? Well, it depends. It depends on your model, your strategy, and your goals; it is all a numbers game that each and every one of us plays (no matter if we are a high-end low volume business or a low-end high volume business…or something in between) between membership activation, membership inactivation, facility capacity/constraints, fee structures, services, and available finances.

So, are all clubs doing the right things in regards to retention? Probably not. The days where commercial clubs could sustain profitability with 35% – 45% attrition rates are being challenged due to the current global economic situation. New approaches like the one you mentioned in your question should be explored to enhance the members experience and increase the club’s value proposition.

Brad Wilkins, Director of Fitness Mgt & Devt
Cooper Fitness Center
bwilkins@cooperfitnesscenter.com
www.cooperfitnesscenter.com

Monday
Jul202009

Average Cost of Selling a Membership

Q: "What is the average cost of selling a membership to a fitness facility, factoring in advertising costs, sales staff, and number of members?"

A: Sales staffing and commissions are usually in the $75-$150 range per new member. $100-$125 is common with higher priced clubs.

Direct marketing costs (not including marketing personnel) are usually in the $75-$150 range as well. $100-$125 is also a common direct marketing cost with higher priced clubs.

If you have a marketing staff you would take that number and divide by your sales number to determine the full marketing expense load. My estimate is that it would add $10-$50 per sale depending on your marketing team payroll and head count.

All in, you can be at $200-$250 per sale in expenses for a premium priced club membership. This would be anywhere from 2-3 month of member tenure to break-even on acquisition costs. Retention has a much higher ROI.

Bill McBride, Chief Operating Officer
Club One
bill.mcbride@clubone.com

www.clubone.com
 

A: In this challenging economy, it is vital that you closely watch costs, reduce expenses, and according to business experts outside our industry, do not reduce marketing because everyone else will, or do not reduce sales training. You need to sharpen the saw as you will have less leads now than you did one year ago or do not diminish customer touch. The members will become more demanding and less tolerant of challenges/problems.

The simplest way to enable a small business owner to make better decisions, implement better, and get the necessary support to take action or follow through during tough times is to have a group of peers who are other CEOs.

The average REX Roundtable member has a cost of sales between $170 and $300. Keep in mind that a more expensive club may have a higher acquisition cost that profitably fits in their budget.

REX Roundtables has more than 90 club organizations (totaling over 500 clubs) that submit and share actual data three times a year. Many IHRSA past and present Board members and Presidents, including the current one are members of the REX Roundtables.

Eddie Tock, Partner
REX Roundtables for Executives™ Licensee
281-732-9757
eddie@eddietock.com
www.rexonline.org

A: The question posted in part answers itself. The formula of advertising costs + sales staff costs / # of members highlights just some of the variables that come into play.

Here are some other variables to consider:

  1. How many leads does the club get?
  2. How does the club do on lead conversion?
  3. How much is spent in TOTAL on advertising and marketing.*

* When figuring the total cost of advertising and marketing, be sure to include the following:

  • Direct advertising costs
  • Signage and billboards
  • Internal branding and uniforms
  • Brochures and fliers;
  • Web site creation/support;
  • Phone line/call costs
  • Sales staff wages, commissions, taxes, etc...
  • Approx 10% of front desk costs
  • Your new member integration program. A vital service new members look for and should be budgeted into every new sale. If you don’t have one, it’s costing you sales. (more information on this topic can be found at www.face2faceretention.com)

CLUB X has 2500 members and loses 1000 members through attrition. It sells 1200 new memberships annually from 2000 inquiries. Annual revenues near $3m and the clubs spends 5% or $150,000 annually on direct advertising and marketing and an additional 7% or $210,000 on the sales staffing and essential services to support each new membership. Therefore each inquiry costs $180 and each new sale cost $300. More importantly every time they skimp on essential services such as a proper new member integration program and systematized retention strategies, they will likely have to spend a further $300 to replace the lost member.

Going the extra mile to retaining a member at CLUB X with all costs factored in would equate to just $87 in year 1 and $46 annually thereafter. A wise an profitable investment.

Paul Brown, President
Face2Face Retention Systems
888/323-20107
paulb@face2faceretention.com
www.face2faceretention.com