Managing The Membership Sales Cycle

Managing the Membership Sales Cycle

Almost all Senior and club managers within leisure will have seen and often received training on the membership sales cycle.  It clearly outlines the key focus points of selling a membership from the initial inquiry to closing the sales and beginning to find new prospects again through such things as referrals.

The questions you have to ask are:

1) How often do you review this process within your business?

2) How do you review the process and ensure it is alive within your sales teams?

3) Do you manage this process through statistics and detail or through anecdotal evidence?

4) Do you focus on one area more than another?

5) How do you train this within your team?

6) Do you put emphasis on one area more than the other?

It's important to train the process out first and ensure your team understand each of the 8 steps.  All of the 8 steps are important and work together to ensure each and every inquiry into your business has the best chance of success.

Whilst on the outset you may think the tour and the closing the sale are the most important.  to put into context though remember these points.  People buy from people, someone will make a first impression within 10-15 secs of meeting your team.  A poor first impression can stop the sale in its tracks.

The needs analysis, if done effectively will provide the information for a tailored tour but also overcome many objections even before they are raised and so be making closing the sale so much more effective.

Overcoming objections is a key skill to master as most people will have queries and barriers to signing up straight away.  This is not a reason to not ask for the sale but an opportunity to confirm some additional details for the client.

The sales does not end with the paperwork, with referrals at point of sale being one of the most cost effective and highest conversion type, the sales process ends with prospecting.  

So as you can see the cycle makes sense, it fits together and all parts are equally important.  How you manage this cycle though and how you keep it alive will determine how successful your membership team will

So How do you keep it alive?

In order to manage this process you need to do exactly that, manage it!

1) Train it and retrain it.  Practice it in its part and in its whole with your sales team.  Either during sales meetings or 1-1's.  I was always taught that repetition is the mother of all learning.  By repeating the process and the techniques the skills become and instinctive behaviour.  Some may even have heard that the process becomes "unconcious competence", like driving the skill just hapens.

2) Get your teams to practice with each other.  They will learn from their colleagues and add more skills to the armoury

3) Have your team provide the needs analysis sheets to you after each tour, for those who did not join they need to provide a genuine reason for not joining. " Want to think about it" is not a reason.

4) Instill KPI's into the process.  Important once to consider are:

- Inquiry to Appointment conversion

- Tour to Sale Conversion

- Sale to Referral 

- Total sales to target

With sales being a numbers game, those with better stats will more than likely have a better grasp on the process, will be generating more of their own inquiries through word of mouth and referrals and this will show.  Those with weak sales performances will need a greater focus on the process.  

However, by managing and focusing on the sales cycle you can identify where the training is needed and provide the guidance for improvement.

Too many managers these days focus on the end product which is the sales number on board.  Go back a few steps and put the focus on the process and the skills and the numbers will look after themselves

Do you Know your Business

The Importance of understanding your business

I still remember the days as a club manager, the end of the month comes and you spend half the day filling in reports for head office wishing the figures were different.  At the start I found it labourious but the longer I did the reports the more value and more detail I began to delve into the greater my understanding of the importance of the figures I was looking at.  As a leader of a club in a large commercial chain this meant a pat on the back, promotion opportunities and even a bonus.

By the end, I had created reports that’s went above and beyond what was required by head office as I realised it that by knowing the details I could influence the future performance of the business.  Gone was the guess work, the shock or surprise at the end of the month or the amazement as to how we had managed to scrape through another month.

There is a trend that appears to happen outside of the larger club chains.  This is that reports seem to be a burden and time consuming.  Understandable when independent clubs often have small payrolls, the owner is the manager and the personal trainer.  However, this oversight can lead to failure or additional challenges by simple not knowing where your revenue comes from and where the costs are.

There are some key essentials that every club should be reporting on.  Just to clarify, reporting is not always retrospective as any report should include your budget and forecast figures as well as any historical figures from previous years.  Every club is different in its location, its price, its demographics and its potential and so you should not make the mistake of comparing one club directly with another.  Broad comparisons are ok but failing to treat each club on its merit can also be dangerous.

Key elements:

-          The club’s budgets

-          The club’s previous year’s figures

-          Month by month Profit & Loss figures

-          Membership details, member breakdown, attrition and types

-          Membership sales vs targets and last year

-          Membership sales statistics, inquiries, tours, sales and referral figures

-          Sales source report

-          Your direct debit numbers,

-          Average Membership rates

-          Club forecast allowing you to manage your projections 3 months out and changing targets to suit

-          Class usage/studio data

-          Personal Training and other tuition revenue, including swimming lessons, sports massage & boot camps

-          Health & Beauty report

-          Any audit scores

Whilst this seems a significant number of reports, the completion would not take huge amounts of time if the reports are set up and ready.  The hardest part would be if no reporting was currently taking place as all old data, budgets and targets would need to be created first.  The work however, will be well worth it.

It is also advisable at this stage to suggest investing in a membership and club management system such as Club Right.  This type of system allows reports to be created quickly with all the information you require to add to your full club report document.

So, after setting up this report and completing it so it’s up to date, what can you do with it?

-          Analyse you club’s performance to ensure you are on track and you cash flow is safe

-          Identify key sales targets and challenge

-          Enable you to invest marketing spend in areas that show success rather than using a shotgun approach

-          By year end the report will enable you to create next year’s budget with a few simple formula changes in the report

-          You can create your business plan based on real data

-          You can gauge success or failure based on previous years’ actuals rather than intuition

-          You can manage your studio classes by actual numbers and change those classes that do not drive numbers and thus revenue

-          You can analyse revenue streams and identify which membership are more popular, do you need to review pricing

-          Allow you to set targets for your team and change the forecasts to consider any dip in business.

-          Identify costs or payroll challenges

-          Your beauty report will show your occupancy rates, average treatment cost, treatment popularity and retail sales percentages.

-          Allows you to manage your team members based on true figures, especially with the sales teams that should be all about targets and conversions

-           Allow you to prepare the club for sale if that time ever comes

These are just a few of the benefits you get that allow you to run your business like a professional.  By knowing your business, you can make real time change by identifying trends and upcoming challenges and potential wins.   Don’t wait to be hit by a major issue when you could spot it months in advance.  You will also find that by knowing your business, what works and why you will have even more success as you place your efforts into those areas that provide the greatest success.

Some clubs even find their whole business model changes over time.  This can be due to demographics or market conditions.  By knowing how your business is changing or needs to change the business can adapt quickly and allow them to take advantage.

I cannot emphasize enough how important knowing your business is.  Effective reporting is vital to gaining this knowledge.  Charlesworth consulting can help you create a bespoke set of reports for your business.  With access to your membership system and support from the club we can even complete these reports monthly for you.

How can a Club Audit make a difference to your business?

Have you ever considered having your club audited? If not why not?

Many of those Leisure & General Managers who have work for the large health club and fitness chains will have at some point experienced the dread of the auditing team announcing themselves at their property.  The hotel and hospitality companies often conduct these as a 2-3 day mystery shop prior to announcing and huge emphasis is placed upon the scores.

So why would these large corporations spend huge sums of money to have all their hotels and clubs audited.  Just to point out at this point, auditing does not need to be an expenses process but with examples such as Marriott Hotels these audits cost millions of dollars to conduct due to the 5000+ hotels in their ranks.

The bigger groups will conduct these audits to:

1) To Ensure the brand is being represented as it should be
2) To ensure continuity of standards across all its facilities
3) To show their business owners and share holders that standards are being maintained at that the business is worth investing in
4) To reduce the potential risk of litigation due to unsafe or illegal practices
5) To judge service standards that could otherwise not be determined by a management walk round
6) To reduce the risk of loss of business due to poor standards in operations
7) To learn to the true challenges within a business
8) To understand the client experience
9) To drive sales.  By mystery shopping the sales process you can ensure the delivery of the membership process is as strong as it can be

So why should leisure businesses follow the example set out by the hotel industry?

Simply put, because it works.  Manager can easily become blind and complacent to their business challenges.  By employing an independent team to review your operating standards, your operating procedures, your service delivery and member experience you can look to make positive change.

Independent auditors and mystery shoppers give you exactly that, a fresh review of your brand, product and service.  There is a saying I learnt very early on "Perception is Reality", meaning that whatever the client sees is what they believe to be the reality.  A dirty changing when, staff who don't engage with clients  or broken kit that's not fixed in a timely manner can all give members/clients the wrong impression which can lead to higher attrition and lower profits.

A manager cannot be expected to see everything or to find a solution to every challenge.  Knowing what their challenges are though will help to guide policy and procedures that lead to an effectively run business.

Audits should be seen as a way of improving a business, not a way of finding fault in a business.  The sign of a strong business leader is how well they take feedback and implement change.

As a consultancy service we always advise our clients to have their business audited at least once a year, preferably twice a year to ensure they are on the top of their game.  Membership sales mystery shops should be carried out monthly to make sure the team remain focused on their challenge and continue to deliver the same exceptional service every single time.

With more and more fitness products entering the market, every member is vital for survival.  If a business is able to get a client to make contact you need to ensure every effort is made to convert them to a member.  losing members due to poor process and standards is unforgivable.

In conclusion, we believe every club owner, regardless of size should employ an independent team to audit and mystery shop their business.  Knowing your weak points and finding solutions will drive standards, reduce attrition, increase sales conversion and ultimately improve your client experience and more importantly to you, increased profits!

The large chains would never engage in such a process simply to show owners they are good at their job, they do it as it drives profit! simple as that