5 Go-To Opportunities to Maximize Your Return on Investment
By: Tim Lyons, CEO , ProFit Marketing Solutions
I’m just going to put this out here: it is downright difficult to compete in the fitness industry these days, let alone set yourself up for long-term financial success. I read a statistic recently that indicated there were nearly 37,000 health clubs/fitness centers in the United States alone. So, how in the world are you going to make sure that what you offer not only brings in enough clients to keep your head above water, but also generates enough revenue that you can rest assured that the lights will come on for another day and you may even be able to take that vacation you’ve been dreaming about for years?
Here are 5 Go-To Methods I recommend to all of my consulting clients to ensure their gym is around longer than it took to build it out:
- Adjust your business model to include layers of memberships. There are many gyms out there that exist solely in one niche – one price point, one type of membership. In this current climate, that’s not going to keep you competitive. If you introduce multiple price points, you can cast a wider net to attract more potential clients in different demographic segments.
Start with your basic membership – the lowest price point – these are the people who just want to come in, do their own thing and leave. They will not require too much of your time which is good, because they’re not paying for it. Level that up to your next price point and introduce large group/team training ie: boot camps, yoga, spin – any type of class where you can have one instructor who is giving specific exercises, but in a larger group setting. It’s a little more structured, but still not too much personal attention. Your next level should be a couple of sessions of small group training per week where you cap your group to 4-6 people and each individual gets more attention. That can be bumped up again to include unlimited small group training sessions for a higher price tag. Round out your price list with private one-on-one training for those clients who want a completely individualized program and a lot of attention. Each level will appeal to a different type of client and require a specific level of interaction in direct relation to the price tag.
- You MUST have multiple profit centers – ideally 6-8 sources. This is where many gyms set themselves up for failure. What do I mean by this? Diversify your offerings! Just like with stocks, you do not ever want to put all of your eggs in one basket. What if that basket breaks? Your completely out of luck. Don’t tie all of your potential into one profit center. Explore alternate product offerings such as supplements, sports performance, nutrition, heart rate monitors, specialty programs, saunas, massage/FST, workshops, clinics, seminars…the list is only limited by your own creativity. Whatever you do will not only open up another revenue stream, but will also increase your overall visibility and perceived value in the community, in turn leading to additional potential clients.
- If you don’t currently offer Small Group Training (SGT), get that set up immediately. Over the past ten years, private training clients have become fewer and further between. At the same time, the interest in small group training (4-6 clients) has grown exponentially. While my gym tends to attract more private training clients than many across the nation due to its location, I still wanted to figure out how to take advantage of the SGT trend and make it just as lucrative for my gym and it worked out perfectly. Now, they are not only tied to the trainers, the program and the gym itself; they are now tied with the other members in the group. It creates more of a bond.
Let’s use my own numbers at Pulse Fitness for reference. My trainer was already going to set aside an hour of his time for Private Training Client A for $80. For that same hour of his time, we decided to replace out the single session PT client with a SGT session. I lowered the individual cost of each client to $45 per client and raised the number of clients to 4 in same time slot. I am now bringing in $180 for the same hour with the same coach which is more than 2.5 times the total I collected for the single private training client during the same amount of time. Why wouldn’t you do this?! Not to mention that most of our PT clients only purchase a handful of sessions and then move on. Our SGT clients tend to sign monthly contracts that earn this same hourly rate month after month. Don’t miss out on that piece of the financial pie.
- Do not pay your trainers per head, per session or a percentage. Pay your trainers a flat rate for their time; not for what they’re doing. This does several things for you. First of all, it keeps your employee costs predictable every month. Gym Owners are, as a whole, pretty bad with money. As soon as it comes in, we spend it. This way, there are no surprises when it comes to payroll and you know exactly how much is left over to cover any unexpected expenses. Secondly, it doesn’t matter if your trainer has one client or 30, your costs do not change. You can keep your coaches on a set schedule that is hourly so that no matter what they do, they make the same amount. This puts you in charge of your own gym, your own payroll, your trainers and your own money – not the other way around.
- Stop selling sessions! If there is only one thing that you take away from this blog, remember this: stop selling sessions and start selling results. Everyone is different and it takes a different amount of time to reach their goals. There is no way to say that someone can reach their goal in 5 sessions, 10 sessions, or more, especially since these session packages don’t usually expire. One client may come in 5 x week and spend the entire 10-session package by week two; another may come in twice one week and you won’t see their smiling face again for a month! Hence any results they may have expected or you may have promised are impossible to predict.
Additionally, most trainers are not very good sales people as they intrinsically want to help people and feel “bad” asking for money from the same clients time and again. Remove that obstacle and sell people into monthly memberships with x sessions per month instead of x sessions total. Sell them into the long-term results they will get from continuing with a program – lose body fat, increase self-confidence, feel great about themselves, or accomplish the impossible. This way, you’re only selling a client once and you will have recurring monthly EFTs.
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Creating a successful and scalable fitness business is not an easy feat, but if investigate the opportunities I have outlined in this blog, you will be ahead of most of your competitors. Get started today!
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