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Wednesday
Oct302013

What is the best ROI when reinvesting in the club?

Image courtesy of Stuart Miles at FreeDigitalPhotos.netYou are a club owner or manager and you have money in the budget to put back into the club. Unfortunately, there is not enough in the coffer for everything on your “to do” list.

So, where do you earmark the funds? Do you reinvest in the physical building – new reception area, locker rooms or flooring. Or, maybe it is finally time to expand to add a new group exercise or yoga room. 

On the other hand, new equipment is always a smart choice. Members certainly notice out-of-date, or, gasp, broken and worn-out, machines and accessories.

Anyone who has sold their home knows the money put into bathrooms and the kitchen is money well spent and comes back two-fold in the home sale price. So, what is the best return on investment in a club?

There are obviously many factors to weigh, and different people have different opinions.

Bruce Carter, president of Optimal Design Systems, a consulting and design firm for the fitness industry, first broke it down to three factors – visual, first impression and look around. 

Using those three aspects he feels what someone sees as soon as they walk into the club as most important. He said just like a front porch or door of a home, if the reception area is broken down and uninspiring then that could be a big turnoff for prospective members, as well as members deciding whether to re-up.

“If you walk in a house and there is a new kitchen but the front porch is broken, sure, there is a new kitchen, which is cool, but already it is a place you don’t want to be,” he explained. “It is the same with a club – what is the experience when you first walk in? You want to maximize visual excitement. Psychologically the mind takes pictures immediately and digests it.”

All you have to do it visit Optimal Design’s web site and look at some of the many recent projects to see what Carter thinks of front reception areas. He and his company have created some amazing spaces that immediately make members and non-members alike comfortable and welcomed.

However, he added that it doesn’t have to be a large project to make an impression. Small, “thankless” fixes can go a long way - a new paint job can go just as far as knocking down walls, creating relaxing areas or a sparkling new front desk.

Darren Kanwischer, owner of Fifth Avenue Club in Calgary, Alberta, Canada, agrees that a fresh coat of paint can go a long way.

“If your club looks terrible then painting walls is relatively cheap and makes a big difference,” he said. “It’s a no-brainer on the best return on investment.”

But, he said paint doesn’t rank high on the “wow” factor. One of the areas Fifth Avenue Club looked at when it did a big renovation in 2007 was new equipment. With a limited shelf life it is a necessity.

“Equipment is what is most recognizable for members. It is the most tangible and most direct,” Kanwischer added. “New members or prospects will see if you have new equipment and it might make a difference if they will join (or not). If you are reinvesting into the club carries a lot of weight.”

Karen Lankford, Front Office manager and Member coordinator at El Gancho Fitness, Swim & Racquet Club in Santa Fe, N.M., feels locker rooms – like bathrooms in homes – are at the top of the list.

“I think in a consumer’s mind, a locker room is really a good gauge of how the business is run,” Lankford explained. “Is it clean, in working order?”

Lankford said that a gym doesn’t have to spend tens of thousands of dollars in order to get it right, or impress, those using the locker room. Simple things like finishes, fixing what is broken, and no foul odors, are areas to look at.

“Every club doesn’t have to have a Taj Mahal of locker rooms. You have to have (a locker room) that fits your brand,” she said.

As far as what Carter, Kanwischer and Lankford think is not a good return on investment, they all agreed that clubs need to stay within themselves. Not sticking with your brand or not catering to your demographics – like putting in an obstacle course if most of your members and the community you are in are Baby Boomers and senior citizens - can be huge mistakes.

“You really have to understand who your customers are and what their priorities are. Once you understand the customer experience then you can fig out where the most important focus is,” Lankford said.

 

 

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