I teach, very specifically “Gym Management” and a well-managed gym is obviously a profitable venture.
A lot of what I am going to say may sound OBVIOUS, but most often it is the simple obvious things that are ignored and that is why today, despite the booming Fitness Industry, we find so many gyms struggling to make ends meet.
When you want to run a gym business successfully and make it a profitable proposition you have to be very good in Planning. “If you fail to plan, you are planning to fail!” Yes, yes, yes, I know this statement is being used by everyone and you all have heard it a 100 times before, but then the question that really begs to be asked is… WHY ARE YOU STILL FAILING TO PLAN??? Or if you are PLANNING, then why are you NOT consistently planning?
There are 4 things that I follow almost like a religion:
When I miss any one of the above, I basically end up screwing things up. Well that used to happen but now I am older and thus wiser and no matter what, I will always PLAN, I will always DELEGATE, always MONITOR till I get things finally EXECUTED.
I have always heard these words said together, as “Sales & Marketing” but I always refer to them as “Marketing & Sales”.
Marketing precedes Sales. Marketing is what tells people that you exist in the market as a player to be considered.
Its marketing that drives people to, if not come to your gym, at the very least call you up to find out if the gym sounds even half as promising as the marketing made it sound. So Marketing generates the enquiries & then it’s up to the Sales team to convert them into paying members.
The performance of your sales team is secondary only because if the marketing goes wrong, then there won’t be any enquiries for the sales people to convert.
SO make sure you are planning effective strategies for your gym’s marketing, every single month.
If the enquires have not been generated then you must analyse the reason for that.
May be your design was not good (I have seen some horrible errors being made in the design of the communications, where in, the fact that it is a gym being marketed is also not clear. Such blunders are often made in the name of “creativity”)
May be the font used in your design is too difficult to read…
May be your distribution of flyers was not done properly. (You thought you sent out 50,000 fliers, but maybe the News Paper walas dumped more than half of them in the gutter. Up until a few years back, even as the CEO of K11, I used to get up at 4am in the morning just to keep a watch on whether the News Paper walas were actually putting the fliers in the News-papers or not.)
May be your location of hoarding was wrong. (Maybe a tree hid your contact numbers)
Basically if failed marketing (If number of enquiries generated is below expectations) is not analysed & scrutinised, then you are simply going to keep wasting your marketing budgets.
Once you identify the reason, you need to make sure you update your marketing team/Ad agency/Graphics designers and make sure that it is not repeated again.
Keep records of your marketing planning and the results it generated.
Incessantly collect data. Data is sacred in Marketing.
The data will help you plan better and help you to take decisions in allocating funds to the right kind of marketing.
Recording enquiries is not enough. Your system must be able to record HOW THE ENQUIRIES ARE BEING GENERATED.
The front desk staff must compulsorily take down the following details from enquiries
- Full Name
- Contact no
- Email id
- How did they hear about gym? (Very important from the point of view of analysing which of the many marketing methods are actually paying dividends.)
Once you build up your database then making decisions as to where you would allocate your marketing budgets becomes more of a precise call than a calculated guess. You become a lot more objective about making a choice of
– whether spending on a hoarding is worth it, or
– a full page Ad in a national newspaper is worth it (a complete waste if you do not have a Pan-India presence) or
– cheaper options like SMS, emailers, Social Media Marketing etc. can suffice, or
– Cross Promotions with establishments sharing your demographic, or
– On ground activations like conducting Fitness Testing Camps in Joggers Parks, Holding seminars on fitness for corporates, condo-complex’s etc.
Sometimes a very good strategy once upon a time may not be as effective today. (Case in point SMS’s. Once upon a time a very cost effective tool. But today doesn’t seem to be paying off due to the fact that most numbers in your database may have opted for DND.)
So be dynamic. Keep changing if the current strategy isn’t working. Laziness will make you doggedly do the same thing again and again. Remember you cannot see a change in your results by sticking to the same approach.
Make sure you have a WEBSITE for your gym. Understand that nowadays the way you can market is changing, new methods of marketing like SEO, Google ads, etc needs to be used and must be used to establish a connect with a wider customer base.
Once you have a marketing strategy that generates a good amount of enquiries, then the next most important thing to make any business successful is to have a great sales force (sales team) with you. A good sales person can be a huge asset, BUT you need to invest time in developing good sales people. They do not come readymade.
I invest a lot of my time in training the sales team. I do not feel comfortable to put people on the job without training. If they don’t perform well then it is your mistake not theirs. You need to have a properly planned training program for them.
Following are the 4 pillars to excel in sales:
- Talent identification & On-boarding / Hiring
- Training & Development
- Compensation / Recognition / Rewards
- Sales Planning & Analytics
Let me explain what I mean by each point:
Talent identification & On-boarding / Hiring:
- Identifying right person for the right If the candidate is not interested in making a career in sales, then he / she is not the right person for the job – no matter how good that person may look or sound. You have to ask the candidate that if given a choice of departments to be employed for, such as sales, HR & Operations department, which department he/she would like to work? If the candidate chooses anything else, other than the sales department, then do not appoint this person as a Sales Executive. (Don’t get desperate. It is better to be understaffed in the sales department than have the department bogged down by uninterested sales staff.)True Sales people are a different breed. They are excited by the sheer prospect of convincing people to join. They are good listener’s first & convincing talkers thereafter.They are capable of handling the stress of meeting targets month after month.
Since it is the Fitness Industry we are in, our sales people also should be people who are thrilled by the prospect of leading a Fitness Lifestyle. A person who hates working out cannot be a very convincing sales person in the fitness Industry. (Well some Sales experts may disagree with me on this, but this is what I firmly believe.)
Training & Development:
Once you hire the right people, you still can fail if the right people are not given enough training.
Training is crucial in making sure you have the very best Sales Team with you. Absence of sufficient training is where the boss takes onus for the failures.
Training cannot be only at the time of joining the company; it has to be on an on-going basis.
A Club General Manager (CGM) should train the staff on a daily, weekly and monthly basis. (It is absolutely crucial that the CGM be a person who has either been promoted from the sales department or has had previous experience in Sales. A CGM not oriented towards sales can never lead a Sales team.)
When a sales employee joins the company, the following format needs to be followed with them:
- Organisation Structure of the Company
- Company Policies & Processes
- Business Orientation & Walk-thru, Systems Training (software)
- Product & Sales Training
- Provide understanding of the business, industry / market & competitors
- Product knowledge, USP’s
- Steps of effective selling
- Mocks & Role Playing: Telephonic, walk-ins
- Systems used in company :
- Google docs
- Google calendar
The HR & Sales HOD (or whoever is responsible) needs to work on creating content for regular training.
Development of the employee:
- Conduct Negotiation Skills Workshops
- Soft skills workshops
- Time management workshops
- Workshops to develop their communication skills
- Develop review programs to evaluate their performance against set and measurable standards
- Conduct regular team meetings to discuss company progress, target v/s achieved results, and bottlenecks that slow down progress
All your sales staff must focus on explaining to enquiries, the advantages that they will get once they become your member, show them their benefit once they achieve the results & how the gym is result oriented. When the product is explained well, price becomes a secondary issue.
Mostly the gym industry is constantly complaining as to how price is the primary issue for customers.
Well I am convinced that when you sell the bigger picture of an enhanced quality of life through improved physical fitness, pricing becomes a non-issue.
Gyms getting caught up in price wars have basically given up on their sales staff & have accepted the fact that the only way they can sell a gym membership is by dropping the rates.
Gyms especially in Mumbai with escalating rentals & electrical charges are caught in a vicious cycle of dropping rates.
As a ray of hope for the Mumbai Fitness Industry, there are now 3 gyms that I know of, that have proven that they do not need to drop rates in order to sell memberships.
They are confident in their product and are selling at more than twice the rates of all other gyms in Mumbai.
The sales people in the gyms give hope to the enquiry that the enquiry will be offered discounts and then there is no limit on what kind of discounts are offered. Most of the gyms in Mumbai don’t even charge Rs. 1000 per month as their membership fees.
So please FOCUS on training the staff in product knowledge & MOST IMPORTANTLY, instill a sense of pride in the product they are selling.
They must be aware of all the USPs your brand possesses.
If you are successful in achieving the above, then sales will happen even without discounts.
You will be amongst the rarest of gyms that actually sell on the printed Rack Rate.
Compensation / Recognition / Rewards:
If you do not take care of the staff’s earning, then the staff is never going to take care of your earnings.
You must have a good commission plan in place and once the target is achieved the commission must be paid to them immediately in order to incentivise them & give them a taste of larger take homes.
- Align incentives to performance, behaviours and objectives
- Have individual performance tracking systems that allow you to incentivise the performers & not waste the commissions on non-performers.
- The process for paying out incentives/commissions has to be set before you explain the incentive/commission structure to the staff. What date they will get paid, what all things will be included in collection like 50% of PT collection will be excluded from collection as that 50% gets paid to trainers, service tax will be removed from collection and then the calculation will happen etc.
CLARITY & TRANSPERENCY will ensure that misunderstandings do not ruin staff morale.
Sales Planning & Analytics:
Planning of the target is a very important task for any CEO or gym owner. Sometimes you may give a target which is unachievable or conversely too easy to achieve. Setting up a challenging, ambitious yet realistic target is a major balancing act.
So how do you set the target?
The target cannot be set on month on month basis, it has to be set on a yearly basis and then divided into monthly.
Once you decide what your target is for a particular month you need to divide that target within individual sales people.
Your Job does not end when you divide the target, it just started there….
You need to monitor achievement of target on a daily basis, if you fail to monitor that then you are going to be in shock when you check the collection in middle or end of the month.
Knowing that you are way below target on the 25th of the month, leaves no scope for corrective measures.
If the gym is not reaching daily targets, then you need to analyse the reasons for non-achievement of targets quickly & promptly.
Following analysis is what you need to look into:
- Conversion analysis – How many enquiries for that month been converted by the sales team. Let’s assume a scenario where the monthly targets set by you as a gym owner are being achieved by your sales team consistently. This still does not mean that you have an effective sales staff. If your gym management software provides you with Conversion Ratios, then it is very important that you keep a hawk eye on that report. Targets being achieved at a very low conversion ratio (Anything below 25%), simply means that you have set your targets too low. You also need to monitor how many enquiries have been converted to trials and then to members and how many have been on the spot conversions.
- Enquiry analysis: You can check whether you have more walk in or more telephonic enquiries. Check If the area from where the enquiries are coming. If you have more gents or ladies enquiries, student or senior citizens. Every analysis you draw will help you to take decisions. If you have more telephonic enquiries then you need to check how many are converting to walk-ins. Start keeping tabs on this and you will find yourself so much more in control of your business.
- Renewal analysis: Renewal rates analysis tells you whether the product being projected by the marketing is actually being delivered or not. Renewals are one thing that I do not consider as being the onus of the sales staff. It is your product (Quality & diligence of your Fitness Staff) that will determine the renewals.
- Collection analysis: Comparing this year’s collection to the last years collection and making sure we are ahead by at least 10 to 20 %. If the average is in Positive then you need to keep pushing sales team to keep it that way and if it’s in a negative then you know you need to analyse the marketing & sales strategies that you are following.
- Sales analysis: What products are selling more, what products you need to concentrate on selling more? Whether you have cash, cc or cheque more as a sales type.
- Employee analysis : How many enquiries they have handled and converted, how many renewals were in their name and how many have been renewed, how many follow ups they have done, how many member referrals they have taken, how many POS referrals they have taken.
You can compare almost everything that is in numbers and then take decisions. You also can check with your expenses, analyse them and reduce where ever it can.
As a closing note I would say that the reasons for low sale are without exception INTERNAL.
Many gym owners make the mistake of accepting & believing the excuses of the staff with regards to not meeting targets.
A bigger gym opening in the same vicinity, selling at the same rate as you, or your express gym not having Group-X studios, or Gyms in the vicinity dropping rates, etc. Can all be given as external reasons (excuses) for not achieving targets by your staff.
Assuming that you are giving out an honest product, the reason for low sales is never EXTERNAL.
LOW SALES IS A TIME FOR INTROSPECTION & ANALYSIS followed by making the necessary changes.