Grow Your Retail Sales and Ancillary Revenues

Bonnie Patrick Mattalian is president and owner of the Club and Spa Synergy Group, which is comprised of selected industry consultants. A recognized industry veteran with more than 20 years of start-up and operational experience in more than 100 clubs and spas across the United States and around the world, Mattalian is renowned for improving fitness center performance through innovative and customized operational, sales, Internet marketing and ancillary revenue generating strategies. She is a sought-after speaker with training techniques for increasing staff motivation and production. Contact her at [email protected].

Fitness centers with higher revenue per member and strong ancillary revenues report higher retention levels because their members are more engaged and are achieving results. If I were to ask you what your strategy is for increasing ancillary revenues in areas such as personal training, massage and retail sales, what would you say?

Unfortunately, the success of selling programs, services and products often is left to chance. However, operators really must have a plan since ancillary sales can significantly contribute to the bottom line—at an average of 20 percent to 30 percent or more of total operating revenues. The question is: during these stressed economic times, how can you accomplish this when it’s a struggle just to keep membership dues from dropping?

Follow this five-step plan to develop a strategy for success in ancillary revenue sales:

1. Define the target market for each program, service or product. Segment your current members and your community prospects based on age, gender, exercise habits, health goals, club usage and program preferences. Identify their needs and the objectives they are looking to achieve.

We went through this exercise a few years ago at one of our facilities. For example, many clubs have members and prospects that fall into one of these categories or a combination thereof:

  • Committed health seekers – Regular exercisers
  • Reluctant health seekers – Know they should exercise but are not convinced about the process; may not have had success in the past
  • Enthusiastic exercisers – Enjoy exercise; gets that “rush;” may be for aesthetic reasons
  • Sanctuary seekers – View exercise as an opportunity to escape; looking for balance
  • Social “belongers” – Like belonging somewhere and having the support network of friends in the club
  • Other segment types – Your facility may have other segments specific to your center

Sometimes people can be a combination of these types or can change from one type to another, based on life circumstances.

Build specific programs, services and product offerings around each of these specific groups. You can see how each would have very different needs and goals. Capture their preferences at point of sale, and update them annually. (E-mail me for a sample template that you can use to plug in the segmentation of your members and prospects.)

2. Determine your demographic market demand. Run updated demographic profiles for your local target market area annually at least. Given the change in economic conditions in the past two years, chances are good that the demographics of your target market area have changed. Pay careful attention to changes in local population growth rates, household income levels and percentage of people in the work force. These factors will impact forecasting for new members and non-member program/service sales. Identify the estimated average rate of participation in your target area for personal training and massage services, with adjustments for median income levels.

3. Identify the programs, products and services for your members and local market. Now you know for whom you want to provide services, you know their needs, goals and preferences, and you know how many are members versus how many are in your target market area. Put together programs based on who they are and what they want. Survey your members at least twice per year, and constantly encourage feedback.

We see the following trends for programs and services in successful centers:

  • Add-on programs that are automatically charged monthly with member dues
  • Private advanced training
  • Small group training
  • TRX/CrossFit
  • Beamfit
  • Youth training
  • Sports-specific programs
  • Golf simulators and enhancement programs
  • Memberships that include personal training two to four times per month, nutritional consults or spa services
  • Health, career or financial educational programs
  • Retail selections that are well displayed and managed

4. Marketing your programs, products and services. The world of marketing has changed completely. It’s not about direct mail or print so much anymore. It’s about having a strong Internet strategy with other mediums mixed in.

For example, if you Google “personal training+your town+your state” or “massage+your town+your state” or “weight loss+your town+your state,” does your club come up on the top half of the page, or at least the first page? Think like your customers do when they search.

Get to the first page for your keywords through search engine optimization. Work with your IT provider or Web host to be sure you have the appropriate keywords selected, meta tags, and alt tags that point people to your site.

Other marketing strategy recommendations:

  • Be sure your club and each of your services or programs have free listings on Google Local, MSN Local and Yahoo Local.
  • Start a Facebook page. Promote programs and services there.
  • Consider text marketing. Many centers have been successful in texting people for an “impulse” massage or personal training appointment.
  • Utilize a strong member rewards program for participating and referring others to programs.
  • Re-think your website. Is it easy to navigate, get information from and register for a program or service anytime?
  • When sending e-mails about programs and services, embed a “buy now” button so that it is easy to register and buy right away.

5. Implement a strong sales strategy. The single most important aspect of increasing ancillary revenues is having a strategy to sell the services, programs or products. These inquiries should be handled just like new member inquiries. Gather as much information about the people as possible. Understand their needs and goals and what motivates them to make buying decisions. Then develop standards for follow-up communications and outcomes. If you manage ancillary services sales in the same manner as you do membership sales, you will see much better results.

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