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.


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