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Entries in Michael Wallen (1)

Monday
Sep232013

Are giving out deals worth it to the club?

There probably aren’t too many people who don’t get at least one deal a day in their inbox. Groupon, LivingSocial and local companies are often offering a variety of services or products.

The idea is not new, nor is it a bad one. The host (Groupon, LivingSocial, etc.) charge a fee, the company offering the deal get work-of-mouth and customers, and the person buying the deal are getting, well, a deal.

But does this work for the fitness industry? Industry leaders actually have varying views on the subject.

 Q: Have you used group buying programs (such as Groupon or LivingSocial) to sell club memberships or programs? If not, why not? If so, with what results and would you do it again?

A: Our facility can be difficult to locate, so we have a very specific digital marketing strategy and social buying groups (Groupon, LivingSocial, Troop Swap, etc.) are very effective. Massage promotions have produced the best results. We offer a 50% discount, but we limit the quantity, limit it to new customers, extend expirations, and limit the number we service per day. This allows potential new clients to find us, and, once they do, we look to convert them to members or repeat clients. When they come for the first visit, we offer a second deeply discounted service upon check-out. For example, a regular 50-minute Swedish massage costs $90. Groupon offers it for $45. When the client comes for that massage, we offer three additional massages for $180 ($60 each). It’s still a fantastic deal for the client, and we increase our margin. The last promotion sold 240+ and we converted 18% to regular clients.

Aaron Volbrecht
General Manager
Mount Vernon Athletic Club
Alexandria, Va.

 

 

A: We haven’t tried them. I don’t want to discount my business’s services for the financial benefit of another company. Also, I’m not sure that the majority of their buyers are potential club members. Many are bargain hunters, who will buy a deal based on price alone, and then move onto the next deal. At our club, we’re looking to help people, not just get money out of them. Our best potential customers aren’t deciding solely based on price – they’re looking for value and real help reaching their wellness goals.

Ann Morrow
CEO
Ellipse Fitness
St. Louis, Mo.

 

 

A: We haven’t done this yet. We have looked into partnering with Groupon, but in the end, we determined that we’re not willing to offer as high of a discount on our memberships and services as Groupon requires. I do receive the daily Groupon e-mail offers each morning, and through those, I often learn about local businesses of which I was not aware. So it’s definitely effective for getting the word out, and for getting a company’s name out there to new prospective customers.

Michael Wallen
Partner
Elite Fitness
Lexington, Kent.

 

 

Visit ihrsa.org/bestpractices to read responses hundreds of questions relating to the health and fitness industry, or to submit a question of your own to be answered.

Club Operators: To be profiled in this column, please contact Kristen Walsh, IHRSA’s Associate Publisher, at kwalsh@ihrsa.org.