Adding Profits to your Bottom-Line

By Casey Conrad

As an owner or operator, your main concern is the club’s bottom-line.  Most clubs try to add to their bottom-line by increasing membership sales and decreasing attrition.  However, this approach only taps into one of the three ways a club can increase profits.

The three ways that any business can add profits to their bottom-line include:  increasing the number of customers it presently has, increasing the size of a purpose and by increasing the frequency of purchases.  Let’s talk about how each of these marketing principles can help maximize profits.

Increasing the number of customers

By focusing on increasing membership sales and decreasing membership attrition, clubs are utilizing the first marketing principle – increasing the number of customers it presently has.  Unfortunately, in a quest to bring in new customers, too many clubs think that they have to lower their monthly dues or discount their initiation fee to get prospects to walk through the door.  Although discounting may boost sales in the short-term, the long-term results can be devastating.

There are a number of ways to entice prospects to buy without having to discount.  Firstly, you can increase the perceived value of the membership.  Ask yourself, ‘What services do we provide that we are not fully explaining and bragging about?’  It might be something as simple as a towel service, locks for the lockers, two free one-on-one personal training sessions or perhaps childcare.  Whatever those amenities are, you need to package them in a way that educated the customer about the value of their investment.  At one club we placed a dollar value on each of the amenities and printed that information right on the presentation sheet.  Seeing those things and their worth made the customers feel as though they were getting a lot more value for their money.

Increasing the size of a customer’s purchase.

The second way to add profits to your club is by increasing the size of the customer’s purchase.  To tap into this concept, ask yourself, ‘Without any additional marketing expenses, how can I make each purchase bring in more revenue and profit?’  The most obvious way to do this is by selling a more expensive membership, but that’s not the only way.  One club I work with decided to take this marketing concept one step further.  Instead of just increasing the profits by having a more expensive membership they turned one membership into two by giving members $50.00 cash for enrolling a friend.  Just a 5% success rate with this idea will add $60,000 to the club’s annual bottom-line.

Increasing the frequency of a purchase

The third way to add profits to your bottom-line is by increasing the frequency of a purchase.  Although a member isn’t going to buy another club membership until their renewal comes due, you can offer them an incentive up front to buy a longer term membership.  For instance, if the average member continues on their monthly dues for six months after their initial agreement, offer them an option to pay more up front with the reward of lower dues later on.  When they reach that point, the lower dues might be enough to keep them coming for many more months than they would have.  For you, every month over the average is profit.

Creative Profit Making

Very few clubs use these ideas together to increase their profits.  Think about it.  If a club can survive by utilizing one of these concepts, imagine how much more profitable they would be by using all three.  I challenge you to think of and implement creative ways to tap into each of these profit making concepts and, not only will you add to your bottom-line, but you will also make your members much happier in the process.