How to increase profit and revenue in your gym. Part one.
Let's think about the number 168 for a moment. One hundred, sixty eight represents the total number of hours available each week to accomplish our goals and produce results. We all get the same amount of time.
How we choose to maximize each one of these precious hours is where the equality ends and metrics like density and efficiency start to appear.
In this multi-part series, I am going to break down some of the key strategies we use to help clubs uncover new profits using small but effective changes in flow and procedure.
Last year, we started consulting with a franchise that wanted to increase revenue at a few underperforming locations.
On the surface, it looked like they were just struggling with a lack of foot traffic. At the advice of a marketing team, they 'refreshed' the brand, created several new subscription models, launched marketing campaigns and even offered generous incentives with disappointing results.
What was wrong?
We started by running a few pivot reports to show sales and traffic trends by day and time. This gave us a good visual overview of performance.
Pinpoint & Prioritize
On reviewing the pivot data with the client, our initial results confirmed the slow performing areas.
Looking specifically at sales and visits, we noticed that Monday and Thursday consistently underperformed with Friday and Sunday bringing up the rear. These low performing areas are what I call surface metrics and are typically symptomatic of a bigger issue.
We needed to spend some time in the club.
After about a week of observing the flow and process, we started seeing some patterns. Our focus shifted to the busiest time-blocks because density has the ability to produce results even in counter-productive environments.
Density vs. Efficiency
Going back to our pivot data, Wednesday became our focus-point with peak performance in the 3pm - 5pm block. No surprise there. They offer several very popular classes during that timeframe. This was our first target. I call this a Density vs. Efficiency model.
The first change we made was to focus their class entrance and exit. We noticed there was no flow refactoring in place to funnel customers to or from the class areas.
Customers were piled up and waiting in lines at the front desk. These friction points had people frustrated. The staff did their best but you could see they were in a constant state of reaction. There were no retail influencers. The vibe felt rushed and impatient. Nobody was thinking about buying anything.
Take an honest look around your club. Evaluate your flow and process. Reduce unnecessary friction at all costs.
Control your vibe
This is a perfect place to stop and talk about vibe. Vibe starts before the customer walks through your door. Think of retail as a theater performance. You set the stage in advance and most of the magic is in the planning.
Control the vibe and you create a better environment for influence.
Remember, it's your club. You can control the vibe and customer experience. Which means (to a great extent), you have the ability to control what a customer is focused on while in your environment.
Setting the stage
Using a couple 11ft retractable belt stanchions, we created a Flow Funnel that was super easy to put up and tear down. This fast-pass style line is placed at the class entrance and designed to move customers efficiently through a check-in kiosk.
Side note: We love full service concierge kiosks. By placing them in key areas of your club, you make it easy for members to quickly buy or rent specific items related to the workout (frictionless grab-and-go)
Kiosks should be stocked throughout the day with strategically placed single use products, impulse buys and high margin items frequently forgotten or replaced.
Plan ahead and never be out of stock at a kiosk.
To further reduce friction during class check-in, we wrote a custom app to allow dead simple, rapid-fire check-in to the class.
Once the customer's barcode was scanned in, retail items at the kiosk could then be included with the check-in (almost magically) and then auto-paid as the customer walked into the class. (grab and go!)
Perfect. We now have flow control, greatly reduced friction and a much improved environment to keep customers excited and focused on the upcoming class.
The next step is building influence. We now have the stage and an audience... we just need to add our performers.
We placed two outgoing, relatable staff members at the kiosk to engage customers, reinforce vibe and improve retail performance. This is crucial to the success of our new flow.
No Cold Conversations
Our influencer's job was to maintain an efficient check-in rhythm while keeping the vibe friendly and fun. Let's call it controlled chaos.
The first rule of keeping check-in rhythm fun and efficient is to avoid Flow Killers. Small talk and open ended questions can kill the vibe and clog your flow quick. You have 5 seconds to engage the customer during check-in... you can't afford to start cold.
Discussions should start at the rear of the line and stay warm. Influencers should be actively engaging customers with questions like "Can I grab anything from the check-in kiosk for you?" or "Have you tried this new product?".
Our influencers frequently gave away free samples and gift bags with incentives for early arrivers.
We made some good progress here. The changes we made took a little time to rollout but the customer response was positive. As expected, profits gradually increased and continued to grow over the targeted areas. The real surprise was an almost instant increase in foot traffic for a few of the underperforming areas. (more on that in part two)
Set your stage, control vibe, reduce unnecessary friction, create influence and make it cool to buy everything in your club.
See you in part two.