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Optimizing the Upsell Opportunity for Health Clubs

Cross-selling and upselling compose a revenue stream health clubs can tap right now. Clearly, members already see the value in coming back to your facility—so why not leverage the opportunity?

“There are only three ways to generate income in any business: Get more customers, get existing customers to buy more often, and get customers to buy larger purchases,” says Casey Conrad, a long-time fitness industry sales consultant. “Upsells and cross-sells tap into the second two ways and are the easiest way to generate both additional income as well as a deeper relationship with members.”

Cross-selling and upselling are the path of least resistance to revenue because existing members simply account for greater dollars. Survey data highlighted in a recent Forrester/Revegy presentation showed that revenues from existing customers—retention, renewal, upsell, cross-sell—vs. new customer acquisition, is almost 75% of total revenue. Cross-selling and upselling can account for 50% of that revenue.

Why It Works for Health Clubs

The technique is especially suited to clubs, Conrad points out, because your members like and trust you and your staff as professionals. In addition, with fewer members in the club right now, there is an excellent opportunity to run more labor-intensive programs for those who want the extra support and are willing to invest in themselves.

“Many programs involve health elements—weight loss, muscle building, sugar regulation, etc.—and there are many different products and/or services that complement these types of programs,” Conrad says. “Members will go out and invest in them elsewhere if the club operator doesn’t offer them. Why not be the resource that makes them available as an option?”

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In fact, in a club environment, there are a wide range of opportunities for cross-selling and upselling. From hybrid in-club/outside-the-club digital programing membership tiers, massage, and physical assessments, to clothing, personal training, healthy grab-and-go food, supplements, and more, there are any number of avenues to take.

“No matter what, by choosing quality products and services that match your programs, you will help members get better results,” she adds. “This deepens their connection to you.”

Program Drivers

The key to making upselling/cross-selling work lies in educating members.

“‘If you build it, they will come,’ only happens in the movies,” says Conrad. “Any product, service, or additional program you bring into the facility must be accompanied by education for the member. Members never want to feel like they are being ‘sold’—they want to invest in things that will help them feel good and reach their goals. Therefore, educating your staff on any product or service is imperative. Ensure that part-time staff either knows the details and can articulate them or refers the member to a staff person who can answer questions intelligently.”

The program, she adds, should also include appropriate support and marketing materials.

Among the keys to making the program succeed is understanding how members will respond to your offers and that means tracking the data.

“Most clubs don’t track the type of data really needed for the average upsell or cross-sell; however, it is incredibly helpful,” she says.

Tracking the data and gaining the information that can help drive and support your cross-selling/upselling efforts involves utilizing data analytics.

“Analytics gives you insights about when a member may be changing their habits, for the better or the worse,” says Jeff Wild, vice president of sales at Club OS. “This gives you the ability to intervene to save a member or upsell someone based on their activity habits and potential changes. This level of insight can be really helpful to make sure you and your staff know how to have the right kinds of conversations with the right audiences.”

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Optimizing the Opportunity

Club OS offers the technology that can produce the information needed to help maximize cross-selling and upselling programs. At Club OS, we don’t just collect a lot of data and let you sift through it, we make sense of the information and show you what is important for the health of your business.

Having the right insights, Wild says, helps you engage the right audience based on their activity data and engage them with a handful of questions that will then determine how you upsell or cross-sell that member.

“Our platform provides data and insights on usage, which gives your team the ability to understand conversation plays to drive upsells, like PT or small group classes,” he says. “It’s important to understand how someone’s responses to your questions about their interest areas can change your talk tracks [a talk track is a tool designed to elicit the key information you need from a sales call]. Many facilities teach only one or two talk tracks and turn a lot of people off early in the process. All of the offerings in your facility do not follow a liner adoption path and your talk tracks should not be singular to a linear driven approach.”

Data analytics are just as critical for member acquisition.

“In terms of member acquisition, you can evaluate things like, does a certain channel draw in a certain type of lead? Is a social media lead typically younger and a website lead typically older?” Wild says. “Having this information up front can help frame how you balance automated communications and direct communications. Does an automated text convert a lead better through a certain channel and an outbound call is more effective for others? If you know which channels take multiple touch points and which are quick conversions through direct contact, you can improve the efficiency and impact of your team through our automations and analytics. We have seen the use of automations more than double in recent months—this has been a critical step in helping our clients rebound from their COVID-related shut down.”

While technology and data can help fuel upselling, cross-selling, member acquisition, and retention, they’re not the main drivers alone.

“Our software is used to plan, prepare, and monitor success, a keystone for your success,” Wild says. “We drive a lot of insights and feedback, but you and your team must execute the plays in order to drive sales conversions and upsells. We give you better access to the right information and provide real-time insights, so that you can design better sales playbooks and train appropriately for different scenarios and plays.”

For more on Club OS’s sales engagement and marketing automation tools, visit their website.

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Jon Feld

Jon Feld is a contributor to IHRSA.org.