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Fitness Facilities Can Survive the Recession by Working Smart and Building Community

Overland Park, KS — As health club operators look for ways to cut costs and ride out the economic recession, many are turning to business service providers to streamline their paperwork and free up time to build more solid member relationships. In addition, a reliable member database system can allow club operators to leverage their metrics by analyzing and acting on important data, such as club usage and retention.

“In this economic environment, every club is working harder than they ever have before to make a sale, and the margins are tighter than ever before with regards to profits,” says Rich Ekstrom, president and founder of Retention Management, Cornelius, NC. “Clubs are also running leaner than they ever have before. People who work at clubs want to be on the floor talking to people — they don't want to be on the phone or doing paperwork.”

Many clubs are focusing on building member relationships to create a sense of community and build solid exercise habits to keep people from canceling memberships when budgets get tight. Tracking these efforts is essential to success, says Sean Kirby, national sales director for ASF International, Highlands Ranch, CO.

“Communication and relationship building with members is crucial,” Kirby says. “If you have the tools to attract members, measure and automate, you can focus on training staff and on the relationship with the members.”

Some service providers say that by using the right software, a club can keep collections and billing in-house, but others advocate outsourcing these functions.

“It's important now for people who own a health club to establish a relationship with their customers and make more personal connections. We allow them more time for that by doing the leg work for them,” says Sabrina Reams, salesperson for Affiliated Acceptance Corp., Sunrise Beach, MO.

Regardless of whether these functions are handled in-house or outsourced, Ekstrom says club owners must reach out to members whose usage is down because they probably haven't adopted a regular exercise routine. He recommends proactively going after those members to let them know the club is interested in their success.

Kirby agrees, saying, “Those clubs that are taking a proactive approach are the ones that are going to survive in this economy. A proactive approach keeps their club healthy by keeping members interested, active and attending the club.”

It's also important for service providers to integrate economic trends, says Sid Nelson, senior vice president of sales and marketing for Paramount Acceptance, Holladay, UT. “Make sure your representative is dialed into an economy like this. Be sure your billing and software company can provide the right metrics.”

By generating member usage reports, for example, clubs can work with members who are at high-risk of cancelling to avoid increased attrition rates.

“The No. 1 reason members cancel is from lack of use,” says David Merrill, chief operating officer for Conexion, Baltimore. Usage reports identify members not using the facility with regularity so the club's staff can contact these members and get them back on track.

“It's all about data and trending,” says Scott Burgess, vice president of operations for Fiserv, Webster, TX. “You can predict how many members will cancel based on usage or billing histories.”

Member reports also can help a club operator plan programming or budget for ancillary revenue sources. Club reporting software can guide managers on member buying trends, as well as their interest in the facility's profit centers, says Nikki Layke, senior account executive for ABC Financial Services, Sherwood, AR.

This level of insight also can help clubs differentiate themselves in a tough economic environment.

“One of the biggest struggles club operators have, and should look to their software companies to do, is making their club different from the club down the street,” says Al Noshirvani, president of MotionSoft Inc., Silver Spring, MD.

One way to stand out is to provide customized e-mail marketing campaigns that allow club owners to reach out to members in targeted and innovative ways. The e-mails can invite members to visit more often or compliment them on the frequency of their visits. Member outreach e-mails can also include wellness tips and new member tips with hints on making exercise part of a routine. These tips also reinforce the club's relationship with a member, Ekstrom says.

Making members feel like they're a part of a health club community is important, Kirby says.

“Once clubs can make a member feel like this is a social environment and that it is a place they can be around other people going through the same times they're going through, it's a value that they don't want to give up,” he says. “People need a place to interact with others, and clubs need the tools to help them do that.”

Club operators with the right data analysis tools and systems support can focus on building a cohesive member community and increasing retention rates.

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