Posted by: Sales Makers | August 3, 2017

Addendum to X-Selling at Membership Sales – page 12

We’re still in the nineties.

However; some of the readers have asked me to delve a bit deeper into the beginning.                    So, I’m going to go back to the launch of Sales Makers into INTERNATIONAL (from page 9.)

As a result of the dinner meeting in London – I was hired to create a new concept that ultimately became t.h.e. Gym / Just 4 Kids. Simultaneously, I was hired by a client in Sweden – thus, we earned the International badge.

Things in the UK hadn’t even really started yet. There were a very few ‘proper’ Clubs in the UK. There was Cannons, Barbicon, Pinnacle, Metropolitan, Queens Park (the first Fitness First), Living Well (associated with; but not the same as Tom Fatjo’s chain in the US). They also had this thing called ‘Leisure‘ Clubs that we didn’t have in the US. The YMCA was different to the Y’s in America. Educationally; IRSA had been going on in America for 7 years and Club Industry for 4 years, IDEA was evolving, – while in the UK – there was RecMan, BodyTalk, LIW – but there was no proper Association yet (that evolved from that initial meeting that my client Becky had been involved in at RecMan, with people like Ken Heathcote, David Giampaolo, Stephen Lewis, Patrick Henchoz, Ron Bradney, Harm Tegelaars) when we launched Club Runner the previous year.

Even more so in Sweden and most of Scandinavia. My client was one of the first ‘proper’ clubs in Stockholm and even he was ‘not quite there’.

An example:

I flew into Stockholm, was taken to my hotel to get a few hours sleep (I can’t sleep on planes) and then he collected me to show me his three clubs (all different names and brands). The first Club (the oldest) was nine stories with different things on each floor and one floor was nothing more that 19 sunbeds. The second Club was a small Woman’s only and the third – the newest, was a proper Club with polished wooden floors, white Cybex & Nautilus equipment, treadmills, Aerobics studios, etc. The first thing I noticed was hundreds of shoes on the floor next to Reception (thinking to myself: Why do so many Swedes forget their shoes?) And the Club looked gr8, seriously buzzing with people everywhere (thinking to myself: he should be telling me how he does it – why does he need me?)

So, I asked: “How many Members do you have?” “I don’t know, maybe 10,000”, was the reply. “Can someone run a report on the computer and give me a breakdown of male/female – age, basic demographics?” “NO”, was the reply. “Why not?” I asked, cautiously curious. “We don’t have this data, the people come in, they pick a membership” (They had 36 different options), “they give us their money and they bring the receipt with them and it tells the staff what they can use. They don’t fill in an application so we could collect this information.”

A year later – we did indeed have data on the 10,000 members (and the Chinese menu of memberships had been substantially reduced.)

Posted by: Sales Makers | August 1, 2017

Addendum to X-Selling at Membership Sales – page 11

In 1997 a Club called McFit was launched by Rainer Schaller and a few co-founders in Germany. It was what has since been branded a “budget” Club.                                               The original price was €16.90 a month, with no contract, 24 hours a day, with only equipment – in approximately 20,000 sq ft. Normally, there was only 1 staff person on the premises.  There was no gym staff, no PT’s, no aerobics classes, no support – basically; what you see is what you get.                                                                                                                              You also needed to pay 50 cents to get five minutes of hot water in the showers.   (NOTE: They’ve since raised the price to €19.90 and hot water is included.)

Years ago in the US – there were quite a few clubs that charged cheap; European Health Spa, Vic Tanney, Jack LaLanne, (eventually bought by Chicago Health & Tennis > which became Bally’s), 24 Hour Nautilus, Family Fitness etc. Some of them (not all) had questionable business models. A couple of them had sold Lifetime memberships for about $2,000 (and then closed the clubs), they then sold memberships that cost about the same (when Lifetime were made illegal on a Federal level) but with a $1 to $10 A YEAR renewal fee.                                                                                                                  Their concept: get as much money out of everybody and don’t care – make it a great deal and if the member needs to wait forty-five minutes to use a treadmill or can’t get into a class – so what…what are they gonna do – quit? And this was in the 70’s, 80’s and 90’s (in America only.)

As I stated earlier – in the eighties we introduced the Enrolment Fee / monthly dues concept which was much more expensive and made it very difficult for us to complete with this approach. You could, but it was difficult because of the price differential.

Which reminds me of a story:                                                                                 Supposedly, one of these chains had a club (lets’ say for conversation sake, in Las Vegas.)  They were charging $299 a year.                                                                                    A competitor (let’s say for conversation sake, Gold’s Gym) opened across the street and started selling for $199.                                                                                                     This p’d off the owner (who had VERY deep pockets.)                                                      His reaction was to begin selling his memberships for $1 a YEAR!                                 He didn’t care, he didn’t need the money, he wanted to prove to the competition that you didn’t get into a price war with him.                                                                            The Gold’s Gym closed in six months and the next day he went back to selling at $299 a year.

Not too many Club owners had pockets that deep or resorted to that aggressive positioning.                                                                                                                                You needed to differentiate your offering and position your club to be able to succeed.                                                                                                                                            (I learned quite a lot in those years about positioning your brand; the importance and the value.)

The difference between these two budget concepts is huge. Being deceptive in your business tactics is the key.                                                                                                Needless to say; I had a major problem with the Clubs that sold cheap and didn’t care – but McFit; truth in advertising, (what you see is what you get  – for a cheap price.)

I don’t have a problem with that.

Posted by: Sales Makers | July 29, 2017

Back to the Addendum – page 10

Hope you enjoyed my diversion into history there. Many more of those stories in the actual book.

Where I left off was in the latter part of the nineties and when the Industry was finding out the brutality of the stock market. Don’t get me wrong, quite a few people made a ton of money off of taking their companies public and so did quite a few of their staff. The people that were on the short end of the stick were the members (who were getting very little support in the clubs – thus the beginning of the Retention plague) and the initial investors who lost money when the clubs underperformed and the stock values dropped. And not all of the people who cashed in on the stock boom won – one ex-client friend of mine who sold at .27p for his group had to cash out at .03p. Another Norwegian chain lost 95% of the share value, in less than one year.

As the Clubs were struggling with the programming issue – the pre-packaged programming solutions in the form of BTS and Les Mills entered the market. Previously, the instructors made their own tapes, created their own classes and there was a lot more interaction in the studios. This started with the Step and really came into it’s own with the introduction of the Body Pump programme that came out of New Zealand. (One interesting bit of trivia: the original plastic weights that were produced in New Zealand were supposedly filled with volcanic sand or rock. I used to joke they were exporting New Zealand – one pound at a time.)

Another key change in the Industry was the growth of the Personal Trainers, the schools and the qualifications. All of a sudden all of the fitness staff had goals of becoming a PT. They didn’t quite realise that you didn’t just take the 40 hours you were being paid to work in the gym and replace it with 40 hours of high paying clients that were going to continue with you forever. They would pay for a two week course, where they learned the basics and then got a piece of paper that said they were qualified. (Basically, it was a receipt of payment), not that they understood anatomy, physiology, nutrition or anything to do with how to sell and service the clients. This caused a lot of people to waste a lot of money, time and energy with the end result they moved out of the Industry because they couldn’t make a living. The PT’s were charging more for one session than the clubs were charging for the monthly dues. The members didn’t see the logic, the value or benefits. Some clubs used it as an income stream, when they took rent from the trainers (like at Fitness First). Some clubs tried to make money from a commission with the PT’s – the end result normally being that the total contribution was about 1% of the total income. A lot of the Club owners just didn’t get that they were losing their members because they didn’t get any service, thus results. They also didn’t get that they were not joining because of the same thing.

And then something really interesting occurred at the turn of the century.

Somehow the post I wrote yesterday has evaporated into the ethernet… So, we’ll try it again – in different words. If it miraculously reappears I’ll apologise now for my seeming redundancy.

On the fifth of November, 1982 Debbie Moore the founder and CEO of Pineapple, a chain of three clubs in London and one in New York City took the company public on the London Stock Exchange. Not only was this the first Club to go onto the Exchange, she was the first woman in the UK to take a company public. This momentous occasion was highly publicised (mainly for the woman angle), but it also was a foreboding of the future for Clubs that entered the stock market. As I stated earlier – they discovered that the stock market is not exactly fitness friendly.

Anyway; you might be interested in seeing how the story ended – since, obviously there never was fifty Pineapple Clubs built in the early nineties.

The Club Industry Convention was in November – we kept in contact with Stephen and Becky over the ensuing months and they flew into Dallas in March for the IRSA Convention to sign the deal. We saw each other on the first day of the Convention and made plans for dinner two nights later (didn’t want to seem too excited.) I booked a table for dinner at a very expensive, rotating restaurant in a high-rise building in downtown Dallas. As we met them in the hotel lobby – they were very quiet and something didn’t quite feel right. A very pleasant dinner with copious amounts of libation resulted in an after dinner Cognac with some Cubans (Note: Cuban cigars are legal in the UK – where Stephen lived and smoking was still legal in restaurants then.)

“So, what’s the story – when do we begin,” I asked.

“Do you want to tell him,” asked Becky of Stephen.

It seems that Debbie Moore had consulted with her Astrologer that morning and the Astrologer advised her to focus on the clothing line and drop the health club idea. The deal was dead!

The Fitness Industry was just barely getting started in the UK, however; they had a very large show called RecMan, that represented not only Fitness, but the whole ‘Healthy’ and ‘UnHealthy’ leisure industry in the UK. The reason I knew Stuart Dyson was that he owned a software provider company and he had purchased the rights for Club Runner in the UK. The owner and I were flying over to the UK in two weeks after IRSA and launching this product at this show. Becky was on the board of a fledging Association that was being started in the UK and invited me to dinner with her and Stephen (at a restaurant he owned, called the Blue Button) in London. At the end of the show, I saw her – they arranged a car to collect me and we had another very pleasant dinner at his restaurant (where I mastered the art of Sabrage [https://en.wikipedia.org/wiki/Sabrage]).

Cognac, Port, Cubans and the news they’d quit Pineapple and wanted us to help them launch a new Club concept.

Sales Makers International was launched…

Posted by: Sales Makers | July 25, 2017

The first Club chain to go on the London Stock Exchange

Let me tell you a story…

I was presenting at Club Industry in 1989 with my partner Ray Gordon, on pre-sales; how to sell memberships before you actually open a club. Club Industry was just being recognised as a major convention and the room we had was pretty large. One of the things I used to do when I was presenting was to stand at the door and greet the attendees, look at their name badges – to see where they were from and to put a few names to faces. This was so; that, during the seminar I would address a few people by name. I felt this made the lecture more personal and involved more people in the presentation.

I was looking around the room and noticed a beautiful blond, with legs to die for, dressed stunningly – by herself. (How did I miss her, I thought. And then realised there were two doors.) I made a beeline for her, walked up and introduced myself. I looked down, saw her name, the name of the Club and the city; which was London. And then I did something that I actually hate when other people do it to me.

I’m from New Jersey (save the jokes), but when someone asks – they won’t recognise Haddonfield – so, I normally say Philadelphia. Philly is where I had my first real job, went to University, started my first career and was the fourth largest city in the States with over five million people only a couple miles from where I actually lived. When I started travelling around the US and then the world, people would ask me where I was from and then ask if I knew their cousin or friend or acquaintance out of five million or two hundred and eighty million people in the US.

So, I see London and say: “Oh, Becky – do you know Stuart Dyson?” Her reply: “I had lunch with him last week.” Thank god our Industry is small and it was even smaller then. I was helping Stuart do a deal with an American software company to launch in the UK.      Chit-chat ensued until I needed to take the stage.

I gave the seminar and was pleased to see Becky in the group at the end who wanted to ask a personal question. Her question was: “Would you like to have lunch with me?” I’ve died and gone to heaven, pinch me… “Yes”, I hesitantly replied (NOT) and we made plans to meet in the hotel restaurant. I walked into the restaurant at the appointed time and there she was – an Angel on earthwith another guy – what’s up with that? She introduces me to Steven and begins to tell me the story. Her company was the first UK Club to go onto the FTSE and her CEO was the first woman, ever – who took the company public on the London Stock Exchange on 5 November 1982. In 1988 she initiated a management buyout and delisted – Steven was the accountant who had helped her and the company get off the exchange. This was the first experience that a Club company had on the London Exchange and it didn’t work then either.

However; as a result of the exposure they had been contacted by Bass Ale (I didn’t have a clue who they were) and Bass was interested in converting 50 of their Pubs into Clubs. Beckys’ and Stevens’ question to me was: “Are you interested in helping us launch 50 new clubs in England?” Obviously, I had died and gone to heaven. I said; “Yes”

The next day I ordered new business cards – we’re now Sales Makers INTERNATIONAL!

The name of the Chain was: (see you tomorrow!)

Posted by: Sales Makers | July 24, 2017

Addendum to X-Selling at Membership Sales Page 7

Quite a few Club chains followed suit and in the UK there was a bit of a feeding frenzy with clubs being acquired for ridiculous prices – one chain going for 30x EBITDA. It didn’t need to be this way, but once one of the big boys made a mistake – the others thinking that if it was OK for them, then it must be right.

One of the biggest was on a Friday in October (sorry, I can’t remember the exact year; mid-90’s, I believe). The suits at Fitness First had evaluated the cost of the Instructors and decided that there was a way to both save money and make money. Personal Training was gaining momentum in the US and there was a smattering of growth in the UK. There were associations and there were qualifications being issued (by anyone with a printer) and the Instructors and gym staff all aspired to become a PT, thinking that because of the money a PT charged they could live the good life.

What they didn’t quite think through was the simple fact – first you’ve got to find the potential customers, then they needed to understand why they should pay them (read: they needed to be sold), then they needed to keep them (and very few customers were willing to pay for a prolonged period of time.) This meant that they needed to start the process all over again and again and again.

So, on this infamous Friday the Club Managers fired ALL of the Instructors and gave them an offer to pay the Club a rental fee and then they could all become Personal Trainers and use the Fitness First gyms as their hunting grounds for prospects.

So, the new Member that joined on Friday afternoon walked into the Club on Monday and expected someone to help them and instead was greeted by a flock of vultures swarming on them and offering to help – for a fee, a large fee. This was not what the Members were expecting and so quite a few simply said no; they didn’t really know what to do – so, they took Spinning classes and Aerobics (Les Mills wasn’t the recognised name; in fact at that time it was actually BTS classes (due to the joint effort out of what is now called Les Mills and Mossa [formerly BTS out of Atlanta – the creators of the Original Step]). This was the beginning of the end of the Golden Years (at least in the UK), the beginning of the slowdown of the growth (which is what the investors on the FTSE seemed to want) and all of the good clubs (with little exceptions) had been snapped up.

This slowdown could have been averted if the Clubs had developed an alternative programming device; such as, small group training, group inductions and given some service to their customers. Unfortunately this didn’t really occur. Since things were now beginning to slow down, a lot of the Clubs started getting desperate and selling a bit cheaper – most, just eliminating the Enrolment Fee and calling the start-up fee an admin fee, service fee – anything but enrolment.

The suits didn’t know what they were selling and in my opinion the Industry still hasnt’ recovered.  There was then the economic downtown in 2007-8 and then the onset of the Budget clubs, but – I’m getting a bit ahead of myself.

Posted by: Sales Makers | July 22, 2017

Addendum to X-Selling at Membership Sales Page 6

This type of selling: positioning the Clubs as a country club / health club with an Enrolment Fee and monthly dues became the model for Clubs globally and was very successful for years. The Clubs in Europe, which were some of the last to join in (especially in Eastern Europe) were learning about what was going on in the Global market through attending shows like FIBO, IHRSA and quite a few Presenters were giving presentations in these countries to local Associations and Conventions, where the locals could learn.

The growth of the internet and the ability to explore the world while sitting at your desk – started creating a phenomenon of fitness explosion that resulted in the achievement of an Industry drive to achieve 100,000,000 members, by 2010. This has now increased exponentially in the last few years.

But, I get ahead of myself – we’re still in the 90’s.

In the UK and the US – the 90’s were the Golden Years – growth was spectacular and it went from strength to strength – this of course resulted in much more competition. But simultaneously, some interesting things were going on the background. The smaller clubs abandoned the Enrolment fee, they abandoned the 12 month contract, retention started becoming a major problem. Price was becoming an issue and clubs began selling for less, retaining less – which created it’s own vicious circle – you needed to sell more to make the same gross revenues and often the profits declined.    We had gotten spoiled and thought it would never end. The clubs had learned how to sell – however; they hadn’t learned how to programme.

Another momentous event was about to take place in the mid 90s’ – Clubs were entering the stock market.      In the UK, everyone attributes the stock market entry to either Fitness First or Holmes Place.

WRONG! 

Here’s a trivia question for you; What club chain was the first to entry the Stock Market in the UK? 

I GUARANTEE 99% of you will get it wrong.            Anybody wanna bet?

And to tease you – I’m not going to give the answer now – you’ll have to read at least three more posts before I reveal the answer and how I know this…

One of the first times I ever saw a TV ad for a Club was before Christmas when Holmes Place in the UK ran a very clever ad on television with a couple in bed fooling and when the camera panned back you saw there was an audience – captioned exercise gives you…     Ostensibly; this was supposed to be promoting a January special, with the ad campaign costing £500,000. I watched and thought about it for a minute and turned to my girlfriend and said; “They’re going on the Stock Market” – the only reason for that ad was that they wanted to get mass market exposure for their IPO. Fitness First was already on the AIM market – Holmes Place was the ‘second’ to go on the FTSE. 

Hm, wonder who was first?

Posted by: Sales Makers | July 20, 2017

Addendum to X-Selling at Membership Sales Page 5

The major disruption to the Industry came about in late 1981 at a meeting in Sarasota, FL where the new Association IRSA was created. I found out about it because my business partner gave a presentation to the group, he was in the bar and I worked with the first President of IRSA and we were one of the first clubs in the US to also go down this path.

The path I’m writing about is of course:         Monthly dues… allowing customers to pay for their memberships on a monthly basis via EFT (Electronic Funds Transfer – also referred to as Direct Debit, Autogiro, etc.)

I’ve written extensively in X-Selling at Membership Sales about the conversation in the bar and the outcome. So, I’m not going to repeat myself here.

The United States and the banking Industry was changing and consumers were actually being encouraged (read: forced) to use this type of payment option. The consumers however were a bit confused, didn’t trust this new system, thought people were going to have access to their money and generally hesitant. Our biggest problem was educating the consumers that their reluctance was miss-guided and so we also gave them the ability to pay annually (the way they were accustomed) and even save money.

This resulted in only 35% of the customers taking this new option.

In hindsight this was good, because the Clubs, as a business couldn’t really afford to take the loss of income so drastic (even though they were now selling more memberships – it wasn’t enough.) Fortunately, a lot of the big players and societal pressure was on our side. BMW came up with this leasing idea and all the Yuppies wanted to drive the new 320i, but couldn’t afford to buy it – so they leased it. Clubs capitalised on this by introducing the Enrolment Fee and month dues (Initial down-payment and ongoing payments, like a lease for memberships).

This led to the majority of Clubs in North America following this type of payment scheme and led to the Golden years in America for the spurt in growth of Clubs.

On the International side, they didn’t have the same scenario and were left to develop their own form of membership payment options.

Some of the European Club Owners started attending the new IRSA Conventions and a show called Club Industry, while their staff were attending IDEA and other exercise shows and taking the information back to their clubs. This did result in some very odd types of logic that actually had the opposite effect. (Like: thinking that if you charged the same price for an Enrolment Fee as the cumulative monthly dues – you’d double your income per member.)                                                                                                                        [An actual situation I encountered in one client in the UK.]

Because we were involved in this early days, we made just about every mistake you could make and were able to learn from them – which quickly positioned Sales Makers a leader in the Industry and was the beginning of a very good few years in America. We were the conversion experts and this experience left me with some great information that I would use later in Europe – trying to figure out how to get the same results in a much faster timeline.  That positioned me quickly in the same role in Scandinavia and the UK especially, the go-to expert.

Posted by: Sales Makers | July 18, 2017

You’re left out – if they’re not right…

I thought I’d share an essay that I wrote today for my altMBA programme that I’m participating in.

This is the original premise… why people who buy from your competitors are right

It’s not gonna be in the Addendum – but, you might find it interesting and then again – maybe not. Curious to get some feedback.

You’re left out – if they’re not right…

PREFACE

My Industry is the Fitness Industry, which realistically began to grow in the 1980’s in North America.In the 1990’s it began to grow Internationally and I moved to Europe in 1994 to teach what I had been teaching for 15 years already to a rapidly expanding market.

WHAT ARE WE SELLING

Since the outset of Clubs selling their memberships to the consumers in the 1980s – they (the Clubs’) had the upper hand. There were limited numbers of Clubs, especially with a Full Service capability (racquet sports, swimming, exercise, classes, etc.) Primarily because of the exorbitant prices of construction, staffing and maintenance.As such, they could more or less charge whatever they wanted and attract the clientele that had arrived – that could afford the premium fees ($75+ a month.)The middle market attracted the want to be’s, who were willing to forego the whole enchilada and settle for a bean burrito, maybe with some guac and rice on the side.

Due to the status (I’m a gym goer [maybe once a month]) and design of these Clubs (now mostly chains due to consolidation) they attracted the the middle market – the yuppies that were getting established, buying houses, leasing BMW’s, raising children. They couldn’t afford the Premium offering (certainly not for their entire family). They were willing to pay the $75 for the family however.

The bottom market was the mom and pop clubs or the muscle-head gyms that were small, friendly, not too much money spent on rents, prime locations, equipment and this would be reflected in a much lower price (under $30 a month and often $99 or only $199 A YEAR.)

WHO’S BUYING

Now we start getting to the question at hand – why are our competitors clients customers right in becoming members (or USERS) of that other Club?

Nobody can please all of the people all of the time and you certainly can’t be All things to All people – the Industry either forgot that or they never admitted it to themselves. They had a good thing going for them and they didn’t change the way they sold and in many cases they still haven’t.

People don’t want to be sold – they may want to buy what you’re selling – it’s now got to be on their terms.

They’re not willing to buy frivolities that they know the won’t use – so they now go to the middle market (which is rapidly shrinking) These are different consumers.

In the old days, we had focus groups, member interest surveys – so we had a good idea of the type of consumers that we were selling.

The best sales person is the one who listens the best. God gave you two ears and one mouth so that you can listen twice as hard as you talk. This gives you the ability to learn more about your potential sale and to try to empathise with his or her needs (and desires.) But sometimes in a real life market environment that always isn’t enough.

Let me give you an example: 

I was working in a Club in Fort Lee, NJ one night when a mature man and woman entered the Club.      I showed them the club, asked the right questions and got all the right answers. He recently had a check up with his Physician who told him that he had high blood pressure, he needed to lose weight, exercise and get into better shape.

I thought he was a sure sale.

So, I gave him the price and assumed he was going to join and put the membership agreement in front of him to proceed. Meanwhile, his wife spoke up and said: “If you think I’m going to let you join this Club for one minute – you’re out of your mind.”

This shocked me and I asked: “Why?” Her reply: “Theres’ so many young, good-looking women here – there’s no way, I’m going to leave him alone here.”

Looking back – I probably should have tried to sell HER a membership (to keep and eye on him) – but I wasn’t thinking. I didn’t have a way to address her objection. I hadn’t empathised with her – I left her out of the sales process, until it was too late.

Lesson learned – and I hope he did find a Club with people she would accept.

Now, let me give you another example of when it worked:

I was working in a Club in Fort Lauderdale, FL.

A young man came in the Club interested in membership and I showed him the Club and discovered that he was in town for four months while he was waiting for the ship he was going to work on was outfitted and reconditioned for a long trip. He was very much into free weights and unfortunately, we didn’t have enough. We also didn’t sell four month memberships.

So, I told him about the name of a Competitor that would sell him what he wanted to buy.

However; I told him that I was taking a diving class and would be done work soon and asked if I could buy him a beer and have a chat about diving. He agreed; he bought me one and then he left.

I figured the competitor had a member, because of me.

The next day the same guy came into the Club with another more mature individual. He asked if I could show him around the Club, I agreed. It turns out that he was the Captain of the ship. As Captain, it was his responsibility to ensure the safety of his crew (numbering 42 men and women.) He felt that by having his crew in the best, most complete facility would ensure that they would be in the best shape for the expedition that they were embarking upon (it turns out this was the vessel that discovered the remains of the Titanic.)

He bought 13 full memberships (4 months x 13 = 42 crew.)

I earned a pretty good commission by empathising with the initial Diver, being honest and not trying to just make one sale. And maybe, just maybe I contributed to a successful mission. We’ll never know – but, I learned a valuable lesson about empathy that night.

THE BOTTOM LINE

The Leisure Market is now everywhere – competing for those leisure dollars…

The Competition is:

Netflix, Amazon Prime, Spotify, Apple Music, your two-week adventure holiday hiking in Peru, the iBook, the Gym, the Studio, the Fitness App on your wrist, the Personal Trainer who lives in your Computer, the bicycle that costs thousands that you take out once a month, the home exercise equipment that is now a coat rack, the diet coach app, the food delivery service that you pay monthly, the list goes on and on…anything that gives someone some time to themselves – we’re competing with not just other Clubs.

There is NO Club in the world that can deliver what the consumer actually wants – for the Boomer (it’s their youth) – for the Millennial (it’s their future, improved self)

Ken Dychtwald wrote Age Wave over thirty years ago warning the world about who would be the people that would become the primary consumers in the coming years – and did the Industry change? (Or even listen?) No, they continued to sell the same old way thinking that it would work forever. Meanwhile, a few smart players; McFit in Germany and Planet Fitness in the US, started offering large multi-fitness facilities for the price of the small, friendly clubs and even less (some as low as $9.99 a month.) Now they are attracting 7-9,000 people in their clubs and bankrupting the competition.

Are their members wrong in choosing the cheapest option? Or have they simply chosen what’s best for them – the most options for the least amount of money.

On the other side of the coin you’ve got people who don’t join the Club, but just hire Personal Trainers at even more cost than the original high-end Clubs – $75 per workout at four to 6 times a month.        Are these people insane to pay these exorbitant prices? Or, have they decided to only pay for results?

We actually now have another side of our multi-sided coin with the fastest growing segment in the fitness industry, which is the cottage industry called; Boutique Clubs – basically small, local studios. This is where people go just to cycle, enjoy Yoga or Pilates, climb virtual mountains (in an Oxygen deprivation tank) take virtual classes (via an online streaming portal), even (I kid you not) nap classes = napercise [http://tinyurl.com/yam5fa4t]

Are these Users insane? (Well, the napercise users are 😉

Research in the United States from the AFS (Association of Fitness Studios) shows that there are over 100,000 Studios offering what the Millennials and Boomers want – which is: what THEY want and only what they want. 

Check out:  The New Language of Leisure: A Boomer/Millennial Smackdown                                      (http://tinyurl.com/ycbegyqf)

Consumers are changing – you can blame the Internet, Computers, iPhones, iPads, Samsung, you can blame Amazon, Walmart, eBay, Twitter, Facebook – but, if you really want someone to blame –          you really should be looking in a mirror.

The simple truth (I think) is something I’ve been teaching in my lectures at conferences, speaking about to my clients, writing in my blog and my book: There are three questions that you need to allow your customers to answer YES to;        (in their minds), if you want them to buy whatever you’re selling.

1. Am I going to enjoy the Products and/or Services?

2. Are they (YOU) going to take a personal interest in ME?

3. AM I going to get the results I WANT?

YOU NEED TO GET IN THEIR HEAD AND ENSURE YOU GET THE RIGHT ANSWERS.

This is MY comment to the statement:

Why people who buy from your competitors are right…

YOU didn’t answer THEIR questions correctly, but your competition did!

YOU didn’t empathise or try to understand what their DESIRES are…

Posted by: Sales Makers | July 18, 2017

Addendum to X-Selling at Membership Sales Page 4

The Beginning of Memberships and the method of payment for all of these wonderful programmes (read memberships) was cash and carry.

These were called:

Pay and Play – describes the basic Racquetball membership, where you paid a set fee ($75-100) and could pay to play the game for a fixed period of one year.

Session – describes the Jazzercise or Aerobics membership, where you paid for one or two classes in a fixed time; which was normally six-weeks session.

Fixed – this would be what a gym would use, which was a day pass, monthly term, three months, six months or annual.

Lifetime – a few dodgy operators would sell ‘Lifetime’ memberships.

This was the big ticket option that could make you a lot of money.

I remember hearing a story about one of the bigger chains that used this option to “launder” massive quantities of cash by selling these during their ‘pre-sales’ to both fund the build and also clean up some dirty money.

The salespeople used to struggle to come up with the members – so, they found themselves going to cemeteries to get names and birth dates of new members

(NOTE: They all had the same address.)

BTW This story was told to me by one of the salespeople.

PS. It is now illegal to sell Lifetime memberships in America or any membership longer that three years. (Which is also a requirement to join IHRSA.)

Although a very few still sell Lifetime with a $1 renewal annually – or equally ridiculous continuation fee.

Clip Cards – this was the beginning of memberships in northern Europe and some Mediterranean Countries.

Basically, you bought one of the categories (IE Aerobics Classes) and you could buy 10, 20 or 50 visits with a deeper discount the more you bought.

This was the predominant method of selling until the 90’s until I started working in the region.

My first European client in 1989, had 34 different types of users (I don’t have the heart to call them members) and thousands of them – but no data; they didn’t have applications.

My second Scandic client in 1998 had 36 different types of users, with 10,000+ people, with 34 annual members – they did have data.

There were very few Clubs in the States that had salespeople; with the exception of the “Hard-pressure”, ‘beat them bloody and take whatever loose change you can get’ from the punters.

Those few clubs historically were the gym chains and the few independents normally started by ex-employees of these clubs.

Sales were conducted by the staff at reception or the instructors.

When customers came in they were told the prices, maybe offered a session free and “always” offered a “first-time incentive” of a price reduction if they joined TODAY!

That was the typical approach to selling memberships in America.

In X-Selling at Membership Sales I outline how Sales Makers differed from this approach and to what I attribute our success by using our “Aggressive Hospitality” approach to sales of memberships in our first Club and ALL of our ensuing clients throughout the world.

The first type of memberships that I sold in 1979 were three types and two different terms. They were the Social, the Fitness (which didn’t include Aerobics in the beginning – until the Owners hired the Jazzercise instructors themselves and incorporated it into the membership) and finally and Unlimited membership offering: no fees for anything in the Club.

One quick aside: IN 1979…

The prices for these were; Social = $99, Fitness = $350 and Unlimited = $600.

I ask: WHAT ARE YOU CHARGING TODAY?

Where did we go wrong? 

A gallon of gas was under a dollar – with inflation; 

I ask:  WHAT SHOULD WE BE CHARGING TODAY?

Sorry, this is just something that bugs me.

I ask: Why have we not been able to convince the public that we are something that they should be willing to pay a fair price for our product; called a membership?

Back to the topic…

The Term of the memberships that I sold were either 5 months (a SnowBird) membership or Annual.

Yes, we had a day pass (guest fee) that sometimes would be waived by a Salesperson to induce a customer to commit to an appointment.

But, normally we charged this fee – to establish our pricing model.

NOTE: A Snowbird membership of five months catered to the clientele that our Club was selling to – the people that flew south (Fort Lauderdale) for the winter and normally would live there from Thanksgiving until Easter.

We were unusual, almost all of our competition was still selling whatever they could get. Our philosophy was, from the beginning; sell them and take care of them.

This meant we would get more people to renew their membership.

Unknowingly, we were addressing Retention long before it became the issue that it is today.

Ironically, the solution to Attrition still is: TAKE CARE OF YOUR MEMBERS!

You won’t make money by trying to sell someone 12 times a year, by selling them monthly.

You won’t make money by trying to sell them four times a year.

And you won’t make money by trying to sell them twice a year.

You’re only giving them more chances to say NO, thus reducing your potential income.

NOTE: Obviously, you will make some money – just not what you could…

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