“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?”