Selling Memberships

In today's blog post, we will explore the actual process of selling gym memberships. The key goal here is to ensure that your club's membership numbers are continually growing, so that profits and club vitality simultaneously increase. The IHRSA Profiles of Success Report found that the majority of clubs need to sell somewhere between 300 and 1,000 new memberships annually in order to keep existing membership numbers stable, and depending upon the size of the club, those numbers can reach up to 5,000 new members annually. The study also found that most clubs, regardless of their size, must bring in new sales each year to a degree ranging between 25% to 50% of their base membership. These numbers show that clubs have established patterns that require a rather large rate of annual membership sales. Some of the larger clubs have to sell anywhere from 50 to 100 new memberships every week in order to keep their membership base stable. 

There are three stages to every sale. The first is referred to as "identifying leads," put into practice by marketing and promotions. A lead is someone who aligns with the club's image and existing membership base. In some way they have shown interest in becoming a member. Generating leads is typically considered the highest priority for the sales team. The second phase is referred to as "qualifying prospects." This is a lead who has already shown interest in the club. A qualifying prospect is more likely to become a member than a lead. The goal is to turn a lead into a prospect. This can happen in many ways - (member referrals, trial memberships, corporate account referrals and guest visits). Making a lead a prospect takes a good conversation between the sales person and the prospect, in order for the sales person to gain insight as to whether this person is indeed a viable prospect. The third phase is called "closing the sale," and happens when the prospect decides to become a member. Two approaches involved here are:

  1. Relationship Selling - in which members who join typically remain members for a long while. Prospects choose to buy a membership based on their needs and desires. The process takes more time but is more sustainable. 
  2. High Pressure Closing - in which the prospects vulnerabilities are unveiled and then targeted upon by the sales person to sell them a membership in a timely manner. "Closing" techniques are applied and the intensity of the sale is much higher than that of a relationship sale.

The membership tour is an essential tool for gaining new members. It generally starts with a question and answer session in which the staff member acquires necessary information to increase the likelihood of a sale. It is during this session that the sales person learns which area of the club will be the potential member's so called "hot spot." The tour thus begins here. The member is then acquainted with the staff experts who work in the hot spot. The potential member is always introduced to an existing member who can say good things about the club, given an overview of the club's calendar of events as well as a brochure with all the ins and outs of the club, and then an offer is typically made to try the club out for a day, free of charge. At the end of the tour, the sales person hopefully asks for the sale and makes it. In the case that the sale fails to be made, a guest pass is always offered, along with a follow-up at a later date.

Selling a corporate membership is another thing altogether. Many clubs rely upon corporate sales for a great deal of their memberships. When selling corporate memberships, it's necessary to understand the corporate mindset regarding gym memberships. If you're curious to learn more, the University of Michigan's Health Management Research Center puts out a report every year about corporate wellness. It's good to keep in mind that corporations typically purchase memberships for their employees for one or more of the following reasons: 

  1. To boost company morale and productivity
  2. To entice new employees
  3. To reduce health care costs
  4. To improve the company's image
  5. To reduce worker's comp and disability

The majority of corporations are seeking clubs that incorporate a number of different programs, including not only fitness, but also nutritional education, health screening, behavioral change, membership packages with many benefits, reports on their employees' gym use, stress management, weight-loss programs…the list goes on and on. When selling the corporate membership, you also want to make certain to make a list of which corporations are the best fit for your club. After you've done that, you'll want to create a compelling corporate presentation package to present to the corporate audience, (which in itself is another step as it can be quite difficult to even obtain the opportunity to present to a company in the first place). Once you've made the appointment, regard it as simply a time when you learn about what it is the company is looking for in a corporate membership. This is not the time when you close your sale. The goal during this initial appointment is to get the company to agree to let you send them a presentation package and proposal tailored to them alone. You'll then follow up on the presentation and prepare yourself for more meetings which may revolve around a counterproposal. Once you close the sale, throw a nice party for the company as a welcome to your club. You'll want to have one of the staff members represent the company and the company's account. Note: Corporate memberships can be incredibly valuable but also risky as there is often a high turnover rate. 

Creating a successful sales culture within the club is essential, and a disciplined sales management team needs to put into practice the following: name someone as sales manager; establish group and personal sales goals; track performance; make certain there are incentives for the sales team; hold weekly meetings; compensate for and acknowledge success; integrate the operations team with the sales team.

The online approach to selling memberships is taking the industry by storm and has replaced a large percentage of living staff members with the "cloud." Online sales methods rely upon attracting potential members by offering lower prices, offering club presentations via the internet, and offering potential members with the option to apply for their membership online and make payments online. If you're interested in taking a look at an example of a successful online approach check out McFit, a leading European budget health club.

Join us next week as we dive into the ins and out of member retention!

Resources:

  1. Fitness Management by Stephen J. Tharrett and James A. Peterson
  2. IHRSA Profiles of Success
  3. http://clubindustry.com/stepbystep/interational-lessons-in-budget-club-operations-20111002