5 Strategies To Improve Fitness Business Profitability, Lead Generation And Retention

By JT | October 11, 2024

Click to listen to the podcast here & get all the links

Episode 1 of Season 1 dropped a couple of weeks ago and I did it as a solocast. If you don’t want to listen to the episode, you can read it all here . . .

I have the best job in the industry – well I think so – as I get to visit gyms, studios and facilities across the globe. I have the pleasure of speaking with owners, managers and team members from every type of fitness business on the planet. Could there be a better job?

Oh yeah there can be . . . hosting YOUR Fitness Business Podcast!

Through all my experiences, I hear best practices for leading, managing & running fitness businesses of all sizes. Especially, from my REX members who are amazing business leaders and I have a ring side seat to see what they do!

I told you I have a cracking job!

In the next 20 minutes I am going to share FIVE opportunities in your business that you may have forgotten about!

In fact, you better make sure nobody is around when you’re listening to today’s episode because I bet at some stage during this episode, you’ll slap your forehead and shout “Shhhhhiiiiiiittttttttt” . . . that’s what I guarantee in the first episode of season 1 of V3.0 of Fitness Business Podcast: “oh shhhhhhiiiiiiiitttttttt” moments.

Strap in because we are starting episode 1 of season 1 in version 3.0 of YOUR Fitness Business Podcast!

We have a brand new segment called 3 Minutes of Wise Words.  This segment is an expert sharing their wisdom. We’ll change up the theme from business operations/strategy to personal well-being/productivity.  And our first guest is Alan Leach the CEO from Westwood Clubs in Ireland.  I saw Alan present the best presentation I have ever seen at IHRSA on pricing. So I could not think of any one better to share wise words with you.

Wise Words – Listen to Alan Leach here

I owned gyms in the 1990’s and I would more times than not forget all the good things we did – the stuff we did that worked!! I’d get bored of things that worked and go looking for the next bright shiny object. Quickly, I’d forget what worked well as I always looked for the next best thing! The reality in every business there are hidden treasures that we forget about and in this episode I know I am going to share 5 hidden treasure chests ladened with gold!

After I’ve shared my 5 hidden treasures, hang around as we have a special guest: Taylor who will share with you how you can add serious income to your business through advertising local businesses in your club. The income is staggering!

Oh and please do not let me to forget to tell you who is coming on episode 2 . . . you will not believe who we have lined up!

One final plug – if you’re watching the video or see a social media I am wearing merch thanks REX Roundtables. REX are great supporters of the podcast, so check out REXRoundtables.com and if you’d like me to wear your merch during an interview, contact me and I will happily be your social influencer!

Let’s not muck around . . . let’s rip into 5 hidden treasures in your fitness business. Where I guarantee when find the treasure, open the chest there will be gold a plenty and you’ll be saying “Argh” like all good pirates!

 

Idea #1 – Audit Your Sales System

I am going to go out on limb and say I bet you have enough leads to make the sales you need every month. I would at least bet you have more leads every day, week, month that you currently have recorded in whatever system you use.

How can I be so definitive in this because we have tested this in the US and Australia.

In fact, in July Keepme.ai published that they made 410 membership inquiries to North American Gym Operators.

😔 58% didn’t reply to email inquiries.  Those that did took an average of 4hrs to reply.

😫 61% did not respond to Facebook inquiries.  Those that did took >17hrs to reply

😡 52% did not respond to Instagram inquiries.  Those that did took an average of 37hrs to reply

You are getting leads and your system is letting you down.

Before I help with a solution, I want to stick the knife in, twist it, add some salt and then wriggle it – ie create maximum pain for you so that you realise what happens when your sales processes are weak.

Simple maths here – if based on your conversion rates you need 100 leads every week and you are only hitting 80 then you will up your marketing spend.  If your cost per lead is $20 then you’ll need to spend $400 extra to get the 100 leads you need.  That blows out to over $20K in a year – that’s a great holiday for you but instead you’re funding either Mark Zuckerberg’s next holiday or your marketing agency’s!

For me there’s a 3 step process:

  1. Audit your own processes through mystery shopping. Just as Keepme have done and just as MysteryShoppingForFitnessBusinesses.com.au do in Australia. Have a mystery shopper enquire and see what happens in regard to what is said & what happens.
  2. Change the mindset of the staff and have them stop worrying about NOT getting an appointment. Have them excited we have a lead! Let’s know where it came from to provide real data on where to spend our next marketing dollar – not wasting a cent!
  3. Consistently train your team in personal sales skills and the in house sales processes. If you are mystery shopping your staff, the reports from the mystery shopping identify what staff do well and the areas of improvement.  This means they will no longer sit through generic training for hours and ‘think that’s not relevant to me.” Now the training can be uber-personalised with 45mins of targeted training.

Never ever lose a lead again and you’ve found your hidden treasure!

Idea #2 – refer friends give members what they want

As a club owner, I ran promotion after promotion giving everything away from TV’s to BBQ’s to travel vouchers to in club merch and nothing worked as well as giving away free membership.  So if you want referrals, try giving away membership.

Willie & Angel Banos from Gold’s So-Cal take this to the extreme with a click bait headline: Refer 3 friends and receive 3 years free! I saw this in their club when I visited and it certainly piqued my interest! I thought, every member would think 3 members is very achievable! And the reward is huge! I do love the fine print too – all 3 members must join within 90 days of each other. This means every time you refer a member the 90 days starts ticking!  You also don’t receive your ‘free membership’ until all 3 have paid for 90 days of membership.

Of course you may not want to go this extreme, perhaps 1 referral is 1 month, 2 referrals is 3 months and 3 referrals in 1 year.  This could be just as effective for you.

Or any variation of time or service.  The key is the ‘click bait’ headline and it’s subsequent WOW factor.

An ongoing consistent referral program that you tell your members about regularly is hidden treasure.

I think the gold in the hidden treasure is in the communication with the member who is referring. It’s calling/emailing/texting to say “John” has joined and 2 more and you’ll receive your free year of membership.  As an on-going referral strategy you permission to always go to your members with updates on their progress toward free membership and at least you’ll personally thank them: warm n fuzzy feeling for you and them!

Idea #3 – Know your retention length & then work on making that longer

At a recent US convention, I was speaking with an owner who told me he had 125% retention . . . I was like WOW! And asked how is that even possible and he said that’s what my software told me!

Our first issue in the fitness industry is knowing the difference between retention and attrition – they are not opposites and each measures different data in your business.

Dr Paul Bedford, the Retention Guru and future Wise Words expert that drops in episode 3, defines retention as how long people stay with us and is measured in months.

Obviously, this number can be skewed if you’ve had a long standing business, so current members who have been with you since day dot impact any averages.

I like to focus on the average length of your cancelled members and as Paul says this is measure in months.

When I know how long a member stays with me before they cancel, I can then build strategies to try to have that member stay a little longer – imagine having 100 members every month stay one extra month where your dues are 50 bucks a month – that’s an extra $5K per month or $60K at the end of the year.

Spend your energy not on saving members when they come into cancel but rather identifying when they hit friction in their usage habits, iron that out and start lengthening how long people stay.

Does it work . . . YES! One of my clubs, had no contracts and our average length of a cancelled membership was 7 months. We called every member on their 5th month anniversary with the goal to get them in for a chat. After 3 months, we had increased the stay to 8 months. We shifted the call to the 6 month anniversary and the trend continued.

If you want to improve retention – how long people stay – what are you doing to encourage usage because when people use your club they stay.  Don’t rely on their self-discipline, you have to be pro-active.

Idea #4 – If You Give A Shit Then Really Give A Shit

Post covid we told people they were ESSENTIAL to our success, productivity and indeed profitability. But did they/do they feel that are ESSENTIAL at your business?

There is data that would suggest otherwise;

  • From August 2022 to August 23 there had been more strikes in the US than in the last 20 years.
  • A LinkedIn Workplace Study in 2023 found that the #1 reason on where to work was based on ‘job fulfillment’ and a very close second was having a manager who cares.

The most coveted skills from leaders in the future will be making your team member feel seen, heard and valued.  Your actions will show if genuinely care.

For a moment, self-reflect and imagine no-one is around as you listen. Raise your hand if in the last 30 days you have:

  • Cancelled a 1:1 with one of your team;
  • Showed up late or finished early that 1:1
  • Or even offered them a get out of the meeting card with the statement, “If you’ve got too much on we can push our meeting back to next week.”

The reality is that roughly 2.5% of time at work is spent with the leader.  And 80%+ of that time is generally spent on “updates” or transactional topics. Not about “How are you doing?”

And why does that happen . . . because we are hustling!

Remember and tattoo this on your brain:

#1 – Hurry & care cannot co-exist

#2 – Time & attention are the currency of care

If you want have a line of people wanting to work for you (including those who already do) then start caring about your team as humans first and team members second.  With this flip, watch your business exponentially grow!  The hidden treasure your care factor.

Idea #5 – Don’t Waste The Opportunity To Build Wealth

Mike Michalowicz in his book Profit First says the first person to be paid should be yourself.  You need to be an expense line on every P & L. Pay yourself first.

By the way, Mike was interviewed by us back in show 24. And if you think we should get him back after 9 years, then let me know.

Too many owners pay themselves last. Budget your salary first and then build in all the other expenses. You don’t live with ownership pressure not to be paid.

The same concept works for team members to improve their savings.  Too many team members spend their salary and save only what is left. Teach them to change their thinking, put their savings away FIRST and then spend the balance.  For a 21 year old, saving $25 per week without interest a crews to $1300 by the end of the year – that’s a lot of money for a 21 year old!

I also see many businesses carrying thousands of dollars in their everyday bank accounts.  Every day bank accounts that give you cents in interest.  No matter the size of the business, what is the minimum your working bank needs every day or week?  Whenever your account gets above that amount, sweep the account and put it in a high yield account. This could be for 30-60-90 days or it could be longer.

Excess cash in your bank accounts – business or personal – reduces your opportunity to build wealth.  Take what you do not need and invest it appropriately and turn cents interest in dollars interest.  This is using hidden treasure to build wealth.

At the end of every interview, I am going to ask our guest to give you a 90 day challenge.  The idea is to turn what you’ve just heard/learned into a meaningful step to enhancing your business or developing you.

My 90 day challenge for you is pick one of the 5 hidden treasure – don’t pick all 5 because you’ll half bake them – and pick one that will have the greatest immediate on your business,

Pick one hidden treasure and build a time line to research, plan, launch and execute in 90 days.  I bet if you spend 90mins a week working on one of these ideas then 18 hours or 90 days later you’ll have this nailed!

Get after it FBP Community.

Suppliers Pitch – Listen to Taylor Watkins from Digital Revenue Systems here

Make sure to check out other Trusted Suppliers for REX Roundtables

You can find all the contact details on this week’s episode notes at FitnessBusinessPodcast.com

We are back with episode 1 now in your ears and I am keen to know what you think, please use our socials or website to send any feedback.  Our LinkedIn Community is also a great place to share your thoughts and tell us what you want from YOUR Fitness Business Podcast.

Now episode 2 is a cracking show! I will be chatting with Barrie Elvish from AUSActive, Richard Beddie from Exercise NZ and Liz Clark from the Health & Fitness Association.  These 3 CEO’s and their respective boards are busting their humps to change government perception of our industry.  Liz will in fact share that thanks to lobbying, they have saved some clubs $60,000 in an annual salary for someone to just take cancellations in US gyms! You will not believe what the government wanted to do!  That show drops 3rd October!

You’ve got actionable steps from today’s episode to enhance your leadership, drive innovation, and boost profits. I’m eager to hear about your wins, so is everyone! So please share your wins in our LinkedIn community!  Click here to join our community

Before I wrap up . . . head to FitnessBusinessPodcast.com to subscribe to our exclusive episode notes.  I’ll be sharing tech platforms or apps to help your business – other than industry CRM’s – and also YouTube clips that I am watching. This is exclusive to the subscribers of our episode notes. Go to FitnessBusinessPodcast.com.

Do you remember our sign off? If it’s your first time, you don’t have to join me but if you’ve heard or before, don’t just say it with me think about the deeper meaning:

“What we leave behind is not set in stone monuments but what is woven into the lives of others.”

Catch you in 2 weeks!

Posted in Podcasts, Retention and tagged , , , , , , , , , , , , , , , ,