Posted by: Sales Makers | September 29, 2013

X-Selling at Membership Sales

In the continuing saga =  History, page 2…

History, page 3 tomorrow…


Fortunately in the seventies Arthur Jones invented a new type of equipment that was accepted as the best – something called Nautilus.  The story goes that Arthur was walking on the beach and saw a Nautilus sea shell (which became their logo) and he came up with the idea of variable resistance.  Another key product that was invented in the seventies was the Lifecycle – marketed by Augie Nieto.  These two products spawned the current Health Club Industry.

The baby boomers were graduating from College where they were involved in sport and they wanted a business that could continue their athletic activities and since the initial line of Nautilus (4 pieces of equipment) could be purchased relatively inexpensively and could be supplemented with exercise bikes and barbells – with premises also relatively cheap – Nautilus Clubs started popping up all over.  The initial membership offerings here were one month, three month, six month and annual memberships.

Now this started causing the first real competition to the hard pressure Clubs – so they started selling lifetime memberships.  The idea being that you paid a large initial membership fee and ridiculously low annual renewal fees.  This was their idea of dealing with retention – if the price was so low – you would always renew, but never use the Club.  Fortunately the US government quickly made this illegal – due to Clubs pre-selling these memberships and not even opening.

Another common type of club in the States was the Tennis Clubs – outdoors with swimming pools throughout the Sun Belt and indoor Clubs in the North and Midwest.  Unfortunately Tennis also started to struggle with their business since both indoor racquetball and tennis Clubs had a lifespan from after Labor Day until we hit the “wall” – April 15 – tax day.  The weather had broken and very few people used the indoor facilities, but of course the bills still needed to be paid and a lot of clubs started looking for alternative ways of generating income.

Coinciding with all this a woman by the name of Jackie Sorenson started a programme called Jazzercise.  These were basically aerobics classes (before the name was invented by Dr. Kenneth Cooper.)  These classes obviously appealed to women.  Now the premise of Jackie Sorenson was not to build Clubs, but rather to teach women the techniques of classes and then they need to find their own locations to conduct the classes, such as churches, schools, and – racquetball Clubs.  The women would come into the racquetball Clubs and rent a court (by the hour) and sell sessions (normally six weeks) – so this gave the racquetball Clubs guaranteed income, even during the summer.  The new graduates from college would arrange a similar deal and rent a court or two (on an annual basis), which also gave the racquetball Club owners guaranteed income.  These were ideal since the Clubs already had changing rooms for the students and members.

-page 2-

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