The Power Of Secondary Income In Your Business

The challenge of running a modern day fitness business has never been harder:

• More competition from facilities to trainers in a park to an app with a digital personal trainer
• Pressure to lower prices to remain competitive
• Less leads coming through the door or picking up the phone

Our goal as business owners remains the same – to be profitable!

The solution to increasing the profitability of your business:

1. Increase your fees which will be unlikely as you are afraid you’ll lose members or clients to your cheaper competitors;
2. Out spend your competitors in marketing and hope it attracts more leads but this increases your expenses which may already be stretched;
3. Race your competitors to the lowest price and hope this buys you market share but this means you have to sell more clients or members;
4. Increase the average yield from your current members or clients and help them achieve their goals with extra paid services from you.

Option 4 makes the most business sense.  It is cost effective.  It is convenience and relationship-based sales.  It is what is commonly called ‘secondary spend’ which I describe as the ‘Parthenon Theory’ to your business.

As you can see the ancient Greek structure has multiple columns holding up the roof of the Parthenon.  And in business we need multiple income streams to hold up our business.  If as a gym we only have memberships producing income for the business, then this makes it tough around Christmas, Easter and often school holidays when traditionally membership sales are weak.  If as a personal trainer our only source of income is sessions, then wet weather, poor gym sales or a business relocating will mean your income can be impacted.

Your Secondary Spend Goal

Your secondary spend is made up of drink sales, supplement sales, clothing sales, towel hire, program sales, group and personal training sessions.  Your goal for secondary spend in your business should be at least 20%.  This means that at least 20% of the total revenue comes from secondary spend.

The great news from an IHRSA study, clubs that have higher secondary spend generally have higher retention. Getting your members or clients spending more with you is a double advantage!

Ask yourself “Do you think that (on average) members who pay extra for programming like personal training or small group training will keep their membership longer than a help-yourself member?”

When I had my clubs, I was thinking constantly about building my secondary spend.  My filtering question was ‘Where are my members spending money now, that I could easily have them spend here?‘ As a result we came up with dry-cleaning as an example to increase spend in the club.

Hint

Ask your key people the same question: Where are clients and or members spending money elsewhere that we could have them spend with us?  This will help you develop a list of products to sell your members.  Then develop sales strategies around upselling these products – especially at the point of sale for all new members.  Just as Macca’s have done with ‘Do you want fries with that?’

Now, as a member of a gym the two areas I see opportunities for you are nutrition and supplements.  I see people in the change rooms taking their pre-workout supp’s, their during work out supp’s and then their post workout protein or whatever they take!  I hear members talking about what nutritional program they are ‘experimenting’ with in order to lose those few kilos before summer.  These are prime opportunities for you.

Your Limiting Belief

The main challenge with many gym owners and PT’s with both these product categories is your personal philosophy. It is rare any fitness professional finds a supplement or nutrition program that ticks all their boxes.  As result, we don’t explore this opportunity and I believe we are leaving money on the table that members would gladly spend with us, if there was an opportunity.

I always struggled to get my head around the myriad of supplements!  There was/is just so many options where do you start? What I did know was my members were using them.  Once I got my head around my opinion or view on taking supplements, a whole world of secondary income spend opened up as I began to think ‘I’d rather them buy from me.’

And then we have the minefield of nutrition. OMG there are so many opinions on what to eat and when to eat! Nevertheless, there is resounding evidence to suggest what we eat will determine the success of health and fitness goals.  So we really should have a nutrition package or program that is available in the club or studio or business.

I would like to challenge your thinking from rather finding the perfect nutrition or supp solution to rather thinking: I’ll provide a product that some of my members may use. You cannot be all things to all people, so change your mind set from thinking all members will buy from you to some will buy from you.  And this allows you to begin to build a secondary stream of income.

My Final Factor on Secondary Income

I really didn’t want any more effort or energy from me.  I was busy enough, so I wanted a secondary income stream that required little to none of my time or my club manager’s time.  If I could have a champion of the product that would be awesome but if it could be automated then even better!  And back in the 1990’s there were not many automated options!

Your Secondary Income Stream Opportunities

For our Australian and New Zealand subscribers, I want to share with you 3 suppliers of products that will help you build a secondary stream of income to your business.  Plus they have promised me that I can trust them to really help you set this up in your business.

TSN will help set up your own online supp store!  No need to stock anything, members go to your website, click on supplements, order and have them delivered direct to their door. For every sale that is made you receive a commission. To find out more click here

TRIBE adds to your club’s profits through team-based training programs: up to 6 programs with ongoing lesson plans, marketing and systems to make implementation easy. Can be delivered by PTs, group-ex teachers, sports coaches or contractors.  To find out more click here

 

Every single one of the 750+ calorie controlled recipes in Shape Me have been written by Australia’s leading Dietitian Susie Burrell.  Your members can sign up to this on-line program and you receive a percentage of the sale. To find out more click here

 

 

For our overseas subscribers, there will be local businesses that offer the same opportunities so get online and start exploring how you can build a secondary income stream.

Remember, your on-going business strategy must be to generate at least 20% of your income from secondary income spend.  Explore every possibility to see what you can sell as it will strengthen your business in so many ways!