Rather Than Being a Bull Or Ostrich, Try Being a Fox


How are you reacting to today's economy? Are you the ostrich, preserving the status quo and just hoping for the best? Are you the bull in a China shop, blindly cutting expenses across the board? Or are you the fox, using the downturn to make your business more effective, so when growth returns, you'll be in an even better position to move quickly?

To survive and thrive, you must become a fox, using smart recession management tools. This means holding your teams accountable, driving results with an “inspect what you expect” management system and using strategies to differentiate yourself in the market. It's not just about selling memberships anymore.

The current recession has broken many of the business cycle rules that we experienced for years in the fitness industry. The steady growth of net memberships, thanks mostly to new sales rather than good retention, has slowly eroded. The recession also is testing sales managers to see if they can provide environments that keep their team members' heads up and their hearts engaged. This is a time when execution and accountability, not just ideas, determine your results.

However, the good news is that most club owners report that cancellations seem to have leveled off and are close to or at expected rates. The better news is that after half a year of declines, consumer spending edged up for a second month in February, even though incomes sagged under the weight of further job losses. The spending increases were a possible sign that this key sector of the economy is staging a modest rebound that could help pull the country out of the recession.

So the question you must ask yourself is: What strategies and planning am I ready to implement in these unprecedented times? Strategic planning doesn't have to be an exercise in anxiety — or futility. Successfully executing strategies, both short term and long term, has never been as challenging as it is now. Most club owners will have to consider more variables and involve more decision makers than they have in the past. They also will need to place a greater emphasis on measurement — the only way to recognize when changing conditions merit quick strategic adjustments. Finally, the focus on new or surprising scenarios shouldn't obscure relevant long-term trends or devalue important existing strategies.

A club owner's business strategy must account for many more contingencies than it has until recently. You must diversify both your marketing and your retention strategies. Since the effectiveness of such strategies depends on an organization's ability to adjust rapidly as the fog starts to lift, managers must identify and intensively monitor key indicators, such as club usage or redemption of personal training sessions.

As trust in brands erodes, people will place more value on recommendations from friends. Social media outlets make it harder for brands to pull the wool over consumers' eyes, but they also offer clubs a powerful new channel through which to promote themselves.

Marketers that ignore the messages from these groups are behaving dangerously because this recession has triggered a wholesale value reappraisal by shoppers about what their habitual brands deliver. The winners will be those who adapt intelligently to new media.

Despite the challenging times, this year's strategic planning process need not be an exercise in futility. Developing scenarios in greater depth, monitoring strategies more rigorously and remaining focused on the long term will all help you boost the odds of creating plans that can lead your club through the turbulence.

Ed Tock, a partner in REX Roundtables, has worked with more than 850 clubs as a sales and marketing consultant. He specializes in performance/profitability programs. He can be reached at 845-736-0307 or [email protected].

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