chinafit - maximizing revenue - brent darden
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Maximizing Revenue Per MemberTRANSCRIPT
Maximizing Revenue Per Member Through Strategy, Sales and Service
www.brentdarden.com
How can you leverage existing customers into more business?
“Ancillary” Income by definition
• Webster - “secondary, auxiliary, supplemental, additional, incremental.
• IHRSA - “revenue from sources other than membership dues and initiation fees.”
Benchmarking “non-dues” revenue of
68%
32%
Dues/ Iniation FeesAncillary Fees
TYPICAL CLUBS SURVEYED
Benchmarking “non-dues” revenue at
32%
68%
Ancillary FeesDues/ Initiation Fees
TELOS FITNESS CENTER
Clubs have one thing retail businesses crave...
Repeat Foot Traffic
The Impact & Influence of Incremental Sales.
Increasing revenue per member can pay big dividends.
For Example:Total # Members = 3,000 x Additional Revenue Per
Member/Per Month of $ 2.00 = $ 6,000 Revenue Per Month
Increasing revenue per member can pay big dividends.
For Example:Total # “Active” Members = 1,800 x Additional
Revenue Per Month of $ 10.00 = $ 18,000 Revenue Per Month
Increasing revenue per member can pay big dividends.
For Example:Total Member “Visits” Per Day = 600 x 10% “Upsell”
Success = 60 Members x $ 1.50 Additional Revenue Per Visit x 30 Days = $ 2,700 Revenue Per Month
Generating incremental sales actually helps member retention.
“ The more members spend the longer they
stay!”
Member Connections = Member Retention
Maximizing revenue per member through strategy, sales and service
Competitive Lodging Industry - Lessons
Lodging Industry REPVAR Strategy
• REV =Revenue
• P = Per
• A = Available
• R = Room
REVPAR
Generating Incremental Sales
• Mini Bar
• Convenient Bottled Water
• Internet Access
• Retail
Generating Incremental Sales
• Pay Per View Movies
• Laundry Service
• Phone Calls
• Fitness Center Usage
• Room Service
• Gift Shop
• Restaurant
Generating Incremental Sales
Lessons from Cinema/ Theater Industry
Approximately 70% of Gross Revenue is
derived from movie tickets
Profit contribution is approximately
57%
Cost of the product is 52% - 55%
Approximately 30% of Gross Revenue is derived from
concessions
Cost of the product is 15% - 20%
Profit contribution is approximately
43%
Lessons from Cinema/ Theater Industry
“Something sweet, something salty, & something else”
Generating Incremental Sales
Suggestive selling works!
Generating Incremental Sales
Lessons from the Fast Food Industry
“Would you like to supersize that?”
Up-selling works!
Strategic Approach to “Added Value”
Current Customer
1Opportunity
Analysis
3Potential Value
Adds
2Delivery
System(s)
4
Current Customers
1 • Characteristics
• Demographics
• Behavior Trends
• Purchasing Patterns
Step 1: Define Your Current Customers
Stay at Home Mom
Retired
Business Professionals
College Students
DEFINING CURRENT CUSTOMERS
Potential Value Adds
2“What might our members
want/ purchase?
Step 2:
Generating Ancillary Income Through Membership Options
TELOS Individual Membership Options:
Basic Membership
$450 initiation fee
$115 per month
Performance Membership
$450 initiation fee
$134 per month
Performance Plus Membership
$499 initiation fee
$285 per month
TELOS PERFORMANCE PLUS Membership:• Unlimited Yoga and Pilates Mat & Tower Classes• $100 credit towards private sessions:
– Professional Training– MAT– Private Pilates– Nutrition
• Buy one get one free Massage each month ($80 value)• Permanent Kit Locker & Laundry Service ($30 value)• Two meals per month at Caesar’s Café ($20 value)• DFW Society Membership ($42 value)• Four complimentary guest passes each month ($80 value)• Complimentary child care • Complimentary Educational Lectures/Seminars
Generating Ancillary Income Through Membership Options
Potential Profit Contributors
• Featured Service
• Professional Trainers
• Team Concept
• Systematic Approach
• Accountability Measures
• Supportive Culture
Personal Training
• Fee Based
• Affordable
• Social
•
Group Training
Potential Profit Contributors
• Introductory Offer
• Fee Based Program
• Membership Option
• Private Training
• Non-Member Participation
• Dedicated Space
Pilates & Yoga
Potential Profit Contributors
• Market Research
• Member Demographic
• Club Culture
• Member & Non-Member Pricing
Spa & Therapy Services
Potential Profit Contributors
• Introductory Offer
• Diet Analysis
• Resting Metabolic Rate
• Registered Dietician
• Nutrition Coach
• Virtual Consultations
Nutrition
Potential Profit Contributors
• Wellness Programs
• Competitions
• Social Events
• Sponsorship
Programs
Potential Profit Contributors
• Nutritional Products
• Supplements
• Self-Serve
• Location
Retail
Potential Profit Contributors
• Open/ Entry Space
• Limited Selections/ Inventory
• “Trunk Shows”
• Retail Responsibility
Pro Shop
Potential Profit Contributors
• Profitability
• Juice/ Smoothie Bar
• Meeting Space
Cafe/ Conference Room
Potential Profit Contributors
• Salon
• Anti-Aging Medicine
• Physical Therapy
• Chiropractor
• Martial Arts
• Shoe Shine
• Recreational Groups
Other Services/ Tenants
Potential Profit Contributors
• Kit Locker
• Laundry Service
• Full Locker
• Executive Locker Room
Possible Add-ons/ Upgrades
Potential Profit Contributors
Strategic Approach to “Added Value”
Current Customer
1
Opportunity Analysis
3Potential Value
Adds
2
What makes sense for your club? Why?
Opportunity Analysis
3• Matches Business Philosophy?
• Relevant/ Add Value?
• Sizable?
• Deliverable?
• Profitable?
Step 3:
Opportunity Analysis
3
Step 3:
Opportunity Analysis Calculation
Concept: _____________Potential Customers: _________Revenue Estimates: customers x price = $Expense Estimates: - Direct Cost = _____ - Indirect Cost = _____ - Overhead Allocation = _____Profit Contribution: _________
Opportunity Analysis
3
Step 3:
“choosing what not to do is often more important that choosing what to do.”
Maximizing revenue per member through strategy, sales and service
Delivery Systems
4
• Marketing Channels
• Operating Processes
• Accounting Functions
• Staffing Responsibilities
• Staff Training
• Incentive Plans
• Overall Service Experience
Step 4:
Step 4:
You must: Ask for the Business
Delivery Systems
4
Step 4: Delivery Systems
“Begin with the end in mind” during the new
member enrollment process.
Member ExperienceManagers
Delivery Systems
4
Delivery Systems
4
“One Throat To Choke”
Step 4:
Maximizing revenue per member through strategy, sales and service
Know Your Best Customers
• Biggest Spenders
Tale of Two Members
John Doe: Profile• Attends 5 times a week
• Swims/ Strength Training/ Cardio
• Pays monthly dues of $115
• Does not utilize any “services” or spend on “added value” offerings
• A “core” member known and enjoyed by staff
Total Annual Spent: $1,380
Tale of Two Members
Jane Doe: Profile• Attends 4 - 5 times/ week
• Personal Trains / Private Pilates Sessions / Therapy
• Pays monthly dues of $285
• Personal Trains 3x/week, Private Pilates 1x/ week, Therapy
2x/ month
• Frequently eats in the cafe, occasionally makes Pro-Shop
purchases
• A “core” member known and enjoyed by staff
Total Annual Spent: $32,000
• Biggest Spenders
• Long Term Members
• High Attenders
Know Your Best Customers
In the future we must move toward an “Experience Economy”.
Capitalize on Your Captive Audience
Maximizing Revenue Per Member Through Strategy, Sales and Service
www.brentdarden.com