Demand Full Fees:
Never Discount Again
It may sound like a wish and a prayer, but owners who understand selling value
and have worked to establish their unique selling points (USP's) never have to
discount enrollment fees or dues. In a few minutes, neither will you.
Every Guru has Told You to Compete on Price
Go to every website of our competitors. All you see are tactical pieces
(postcards, banners, flyers, etc.) that slap your logo on materials that are
emblazoned with "Special Price"... "Lim*ted Time Offer"... "Join for $1"...
You get the point we are making.
Recently, we discussed the HUGE disconnect the fitness industry has created
with the type of advertising you see across the country and in every market;
regardless of size and demographics. You learned that we confuse our prospects
by first telling them we are great, the best club to look and feel great and have
the best x, y and z. We then get them scratching their heads as to why are we so eager to just discount and diminish the value of what we have to offer.
Why The Heck Do You Do This?
You resort to discounting for a number of reasons:
Fear- If we don't keep up with all the $19 a month gyms out there, we'll lose
our membership base.
Herd Mentality- If everyone is doing it, it must be the right way to market.
You remember what mom told us about this logic "If Jimmy jumped off the
bridge would you jump off behind him?"
It's Easy- Lazy marketing and advertising resorts to discounting on prices.
There are a number of ways to fix this quickly for a club owner.
No Other Solution- Our minds are so cluttered with an overload of marketing,
offers, promotions, campaigns and specials we can't think straight. Trust me,
this "writers block" is common, but it can be overcome.
Your Prospects Are NOT Seeking Lowest Price
One fact that we cannot emphasize enough is for you and your team to
understand what your prospect is thinking. Their motivations, fears, concerns
and objections change over the cycle of determining who is going to do the
best job of helping them look and feel great.
Do not confuse selling memberships with being the place where your prospects
can look and feel great. You are not selling memberships. The membership is
merely the vehicle to help your member look better, feel better, relax and reach
their personal health, fitness and beauty goals. You are selling benefits.
It is not about the money. Whether you charge $39 a month or $79 a month
or more, it is the last thing that is of concern for 98% of the people who walk
through your front door. What is critical to your prospects is:
Convenience- They want to be assured that you are close to their home or office.
This is more a decision about time commitment than a financial commitment.
Great Service- They want to feel important and not a number. You are in the
hospitality business whether you like it or not.
No Hassles- They want to get in, get fit and get on with their day. If you do
that better than the gym down the street; you'll be more successful.
Results- They want proof. Proof that you can help them reach their goals
quickly and safely.
Value- Not price. People will pay more if all their needs are being met. You can
charge $150 a month, but you better back it up with great value.
Selling Your Memberships On Value
We were speaking with an owner earlier this week who has historically priced her
club at $39 a month with a $199 Enrollment Fee. She explained that one of
her tactics was to run discounts each month; each month with a different theme.
The bottom line, she tried to make the prospect feel like they were getting a "deal"
for acting quickly. The problem was she built her business on a model that
assumed $199 plus $39 a month. Because of her discount strategy, she only
averaged $79 in Enrollment Fees for each new member. That is a 60% reduction
from her business model. No wonder she was only taking home $89,000 a year
as the owner! She was giving all her margin away. She was committing one of
the Cardinal sins in the business today. She had lazy sales people, lots of
competition and she was petrified she would lose out to the gym down the street
once people knew they were cheaper.
Remember we discussed the confusion in the prospects mind? They are told you
are the best thing since sliced bread, but it really isn't that great so we'll chop the
price down. There is a better way.
Apply incentives to the mix and you can sell at full price, project a great value and
make membership at your club the experience your members want it to be. All it
takes is a thorough understanding of what makes you better, unique or different.
You can develop a number of great incentives to encourage your prospect to take
action and join. It can be encouraging and motivating, as opposed to a feeling of
diminishing worth and value through discounts.
You will find what you need in a number of critical places:
Your Unique Selling Points
Your Competitive Advantages
Your Members Comments and Opinions
Your Inside Reality
Just like we showed you that you do not need to advertise to make a lot of money
in this industry, you also can avoid the Price War mentality.
1) Results are best achieved through targeted marketing, plus prospect hot buttons,
plus competitive intelligence, plus USP's.
2) Market to a target audience for best results.
3) Use incentives to encourage and eliminate discounts that de-value.
Until next week...