Where did that Member go? Rediscovering the Lost Art of Customer Service

Published on 02/08/10 10:26AM by Thomas Plummer

The copy in this blog is an excerpt from my newest book, tentatively called: Where Did that Member Go? Rediscovering the Lost Art of Customer Service. The book is due out in March and will again be published by Jim Petersen and his team at Healthy Learning, perhaps the most patient people in the publishing business.

My theme of the year in the workshops is that we fail the members by not getting enough people in the clubs enough help and then that mistake punishes us when it comes to low retention in our businesses.
The shear number of competitors should be forcing you to rethink this issue. We need to move away from a culture of failure, where just a few members willing to pay for one-on-one training ever had a chance to succeed, to a culture of success where we can create systems that allow us to help the biggest percentage of members and still make money.

The entire book is really about retention, but the bigger issue lies underneath and that is our inability to help the members get in shape and stay in shape. Start with this brief rant and start to think about how you support the members you have in your club. You will probably find that few truly get the help they want and deserve for the money spent.

Create a Membership System That Has Many Layers and Options Where Everyone Who Wants Help Can Get It at a Price They Can Afford

We exist to change lives and any fitness business should be nothing more than a delivery system designed to change as many lives as possible.

Change lives, and people stay longer and pay longer, which results in more income for the business, usually more profitability, and a chance to change more lives in the future.

The tool that enhances this mission to change as many lives as possible is customer service. Every member who pays us each month to belong to the club in essence trusts us to facilitate this change, and every member who pays deserves some respect from the club and its team. This glowing and somewhat simplistic business idea breaks down, however, when it comes to the direct application in most fitness businesses.

In most clubs, there are usually two distinct classes of members. There are the ones who have the money to purchase one-on-one help, and therefore get the best results from their membership, and then there is everyone else going through the motions practicing self-inflicted fitness.

Everyone else is defined as all the other members still doing their original circuit workout from the day they started, the members carrying sweat stained copies of Men’s Health, and the wannabe bodybuilders still carrying around Arnold’s 1977 hardcover edition of The Education of a Bodybuilder. All of these people are seekers of a more fit life, but almost all will be failures since the club simply doesn’t have a system to help them that isn’t restrictive and expensive.

If we want to keep more members staying longer and paying longer, then we have to design a membership system that allows everyone to get help at a rate they can afford.

Doing this requires that you stop copying the traditional one-on-one business model and move to a system that is more inclusive for more members, yet more financially successful for the club due to a much higher percentage of your members paying a fee monthly that is higher than your rate for just a simple access membership.

The Current System Only Serves One Type of Client

The traditional training model only serves one type of client. If you are on the average a middle-aged, fat, white guy and have money, you get a trainer. If you’re not, then you are much less likely to seek out the services of the club’s training department.

The club loses money, and fails to deliver great service, by limiting its business plan to only a single user group. If you want to generate the highest revenue possible from the most members, and deliver service to the widest range of clients, then you need to expand your model to seek out the other types of clientele who are waiting for you, but are untapped because your model fails to serve them.

Following are all of the categories you could be serving in your business by expanding your current training model and by making it more inclusive.

The deconditioned people

This group, defined by the statistic that about 63 percent of the people in this country are either overweight or obese, really doesn’t do well in a mainstream fitness facility. Unless the deconditioned person can come up with money for one-on-one training, he is pretty much underserved by most clubs. These people simply need much more help during their first 30 days than most clubs can afford to give using the one-on-one format.

It is interesting to note that most clubs fail these clients, due to the limits and restrictions of their business model, and not because of the owner’s or manager’s lack of awareness that these folks need more help or because the club’s management doesn’t care. The model itself is wrong, and is where the barrier exists, because most owners just can’t afford to throw that much one-on-one help at people who need constant attention during their first 30-days.

The traditional one-on-one clients

This is the standard client serviced by the standard model. This is a failing model in most clubs, however, if you look at the numbers. One-on-one training usually only has a penetration rate of about 3 to 6 percent of the club’s membership. Penetration rate is again defined as how many people in the club’s total membership are involved in a given program. In this example, a club with 1,000 members, and a penetration rate of five percent with one-on-one training, would only have 50 consistent training clients.

Some clubs try to compensate for this by showing a higher rate of training, using $75 per session for example, and then discounting for anyone who buys more sessions, or packages. In this instance, the club might offer five sessions at $250 (now $50 each) or 10 sessions at $400 (now dropped to only $40 each). Besides killing the credibility of your trainers, who started out as $75-per-hour trainers, but are now worth only $40 per hour, you are still limiting your program to only a single type of client.

Most one-on-one training clients like the pampering and the status that comes with having a personal trainer. These people seek this out because of the results they get, the guidance they receive, but as equally important to many of them is that fact that they can afford it and the other members can’t. It is elitist, it has status for some, and this type of training was always designed to be that way. The trainers themselves perpetuate this by fighting for bragging rights on who can get the most per hour, therefore, continually seeking to drive up the training rates in the market.

These elite clients have a place in the club, and if a member drives up in a Bentley and wants to train, take a lot of his money and give him the training. But there are other types of clients, in much larger numbers, who are not being serviced by this model you need to chase as well.

The social dynamic/group dynamic category

These are the clients that prefer to do things in groups and who seek the energy and fun from doing things they like with a lot of other people pursuing the same activity and goals.

The business concept behind attracting these people is that they can share the cost of the trainer. People need access to more information to make change in fitness, because most people just can’t figure it out by themselves. Training in a group allows a wider range of people, who understand they need help, to get this information at a reduced rate by going through the process with others and sharing the cost of that education.

People grow up doing things in groups. If you were an athlete, you grew up on a team. Even if you were an individual-pursuit athlete, such as a track person or played golf, you were still part of a team and trained and travelled together. If you weren’t into sports, you might have been a Boy Scout, Girl Scout, in the chess club, or somehow involved in doing something with a group of people. Even the guys in the computer clubs still get together to exchange tips and combine expertise.

We have killed the group dynamic in most clubs. Training is done one-on-one, the cardio equipment has personal televisions, and we encourage members to bring their mp3 players. We not only limit the personal connection, we strongly discourage it in most clubs. Except for clubs who have vital group-exercise programs, there is nowhere in most facilities to meet and interact with other members, especially since many clubs don’t have stretching areas or any type of socialization node, such as a sports bar.

Training in a group is more fun, you will get better results because of the peer pressure, and you can save money if you share the cost of the trainer. The club also benefits more by being able to generate a higher return-per-session. For example, if your best trainer can get $75 per hour, then that is your ceiling for her for every hour she works. You simply can’t get more than the proven maximum of $75. But if you think about creating the group dynamic experience, you can now raise your return-per-hour. For example, you might charge $75 for one person, but you can charge $40 per workout for four different people in a semi-private environment; therefore, generating $160 for the same length of time.

It is important to understand that you can add this layer without cannibalizing your one-on-one business. The people who do one-on-one are not the same people who seek the group experience, and the majority of your existing one-on-one clients will prefer to just keep doing what they are doing if you do add the semi-private option to your training business. Most semi-private training would be done in groups of two to four people, but experienced trainers can sometimes manage groups as big as six people.

One of the false assumptions that prevent many club owners from trying this model is that they believe--usually through the influence of the trainers--that everyone has to have their own individualized workout. Unless the person is injured, or needs sports-specific training, such as someone getting ready to do a marathon, then the rest of the members can do things in groups, sharing a common workout. For example, the head trainer might post the workout of the day for the semi-private clients listing kettlebell swings, clean and presses, squats, pull-ups, and dead lifts. An experienced trainer might have a member who has been training for a while do two minutes of swings with a 53-pound bell and the new guy might do 30 seconds with a 35-pounder. Everyone can get individual help and guidance that suits that member within the confines of the group, but everyone still does the same basic workout.

The Challenge Seekers (those who simply can't find a hard enough challenge in most mainstream fitness businesses)

This is the group most clubs never see and wouldn’t know how to service if they did appear. These people are in the 25- to 45-year-old age group and are the ones who are doing radical training in their garages, doing the cult workout of the year. These are also the same people who would be bored to tears working with a traditional trainer by themselves. This group wants a challenge, wants to do the training that their favorite athletes are doing, and are concerned not only with looking good, but with functioning well as a skier, bike rider, hiker, kayaker, or any other weekend lifestyle sport. These people almost always train in groups, because the peer pressure drives the results and helps take every workout to the next higher level.

These are also the people who usually know a lot about training since they read all the hot fitness publications, explore fitness online, and read the training books. We usually call this group the “badass” fitness group, because they are seeking the badass, make-it-hard, challenge-me-as-much-as-you-can workout, and have no interest in traditional fixed-equipment circuits or body-split bodybuilding workouts done 1972-style.

This group thrives in group personal training/coaching with groups of a trainer and up to 10 members. The group training sessions should be very aggressive and would be structured consisting of a program that is usually done for a full month before being changed. This should not be called a class, because that term forces a comparison between the club’s group personal training and its group exercise program.
Group exercise is generally included as part of a simple access membership to the club, but you want to charge for group personal training. There is a sample pricing structure later in this chapter.

The key point is that there are really four types of clients that need, or who are seeking, help beyond the most basic information that most clubs offer, but most clubs merely offer help to the traditional one-on-one client. By limiting your help to just the 3 to 6 percent of the people who can afford training, or like that type of training relationship, you are in effect neglecting the other 94 to 97 percent of the members who can’t afford, or who simply don’t like, that type of working out.

The interesting thing to note is that when asked directly, most owners cite that almost everybody coming through the door, which stated statistically might be as high as 95 percent in most clubs, needs help of some type and can’t get started on their own. Even the folks from other gyms and who have been working out are often doing homemade or dated workouts that are ineffective or dangerous.

Yet knowing this hasn’t led to any changes in the training model for most clubs. The clubs simply don’t change, or can’t afford to change, the current model that limits help and service to the majority of their members.

Building a Price Model That Can Service a Deeper Penetration Rate in Your Membership

Following is a sample model that is designed to touch the largest number of members in any given club. When you add layers, you are really adding a variety of different price points that will appeal to a wider range of clients. This model is also based upon the assumption that the one-on-one training model is not effective in most clubs. The traditional model only generates restricted income from the entire membership base and also restricts the return-per-hour the club can obtain.

Done correctly, most clubs should only have about 10 percent of its training revenue come from the traditional model. Most clubs could in fact benefit from charging more for one-on-one training and making it more elite for its membership and for its image in the marketplace. Setting a higher standard with your one-on-one price would also guide more members toward the semi-private and group models where the club can reap a higher profit margin and serve more members.

Important note: Do not panic by trying to force your existing members into a new system. If you use this model, you would do it for new members forward. Most owners balk at using a newer model, because they always relate change back to the members they already have in the program: “I know Joe, and Joe won’t do any of this new stuff, and he sure won’t pay more.” Leave Joe alone. Don’t mess with your current members in the model you are using. If they want to keep buying sessions, then sell them the sessions, but stop failing to grow your business because you are afraid of a bunch of members holding you hostage. Honor the deals you have made, but move forward from there.

This model is also based upon the assumption that you will at some point stop selling sessions and packages and move to an EFT model (members are drafted monthly for their training directly from a credit-card or bank account). Sessions and packages are weak tools, because the cash flow is so inconsistent. You sell a package, get the cash today, which is nice, but then you have to service the person for several more months without any matching influx of money.

Your goal in this more advanced business model is to:

 
• Offer a system that allows a wider range of members, as defined by workout type and price sensitivity, to become active in your business.
• Stabilize your cash flow by switching away from short-term packages and sessions to 12-month training programs based upon a monthly EFT.
The training clubs have long suffered from having all of their membership based upon short-term tools, such as packages, and the mainstream fitness clubs have based their memberships upon longer tools, such as a 12-month term.

Both businesses could benefit from combining these memberships into one model. The training clubs could develop a large receivable base, which is the combined total of all their members paying monthly for their training. This eliminates the inconsistent cash flow that is so detrimental to these small businesses.

The mainstream people should strive to get the highest number of members possible into a larger monthly payment and include the membership to the club as part of the training membership.

One of the biggest changes in the industry during the first decade of the new century, and maybe one of the biggest changes in the last 30 years or so in the business, was the necessity to show the lowest entry point/membership price possible in order to get as many members as possible into the club, and then work hard to drive up the average EFT sale.

In the past, clubs have been able to hold the line and not drop their single-person rate, but the combination of the economy, the maturing of the marketplace with more competitors than ever before, the advent of the lower priced club model, and a more astute clientele looking for more options is forcing everyone else to change. This change will drastically affect all mainstream fitness clubs for the next decade, and all owners and managers need to tweak their current price models before falling sales and declining revenues force you to change what you are currently doing.

When was the Decade You Personally Stopped Evolving?

Published on 01/25/10 11:39AM by Thomas Plummer

I met a guy at a party whose year was 1986. That was the year that he still believes was the most important year of his life, and he still clings to that era like stink on a fat bowler. He refuses to listen to any music recorded later than 1986 (Journey, Huey Lewis and Survivor still rock his world), lives as a low-tech contrarian and is in essence frozen in the past.

This would be funny if it wasn’t for the fact that I have to deal with this every single workshop we offer. Most owners are frozen somewhere in the past and just refuse to evolve no matter what is happening in today’s market. For example, look at the industry through the recent years:

• 60’s: Some of these guys are still around and in the business. These were the years of the first hard pressure sales, nasty sales tactics and offensive marketing. Whether we like it or not, this is part of our past and these guys and their business practices are why the industry has such a low image with the public, because so many next generation people in the industry emulated these early guys. These guys are characterized by the question, “What do you mean lead boxes don’t work? Why I did 221 sales one month (November, 1966) out of lead boxes,”

• 70’s: Arnold says it all. This decade is why every Monday in America is national bench press and arm day in most clubs thanks to, “Arnold: The Education of a Bodybuilder.” This is also the decade that still dictates training philosophy in the clubs and why we fail the clients so often. Mrs. Johnson, that sweet little member who wants to lose 25 pounds, finds herself with a trainer who weighs about 260 and wonders why she is on a four-day split routine doing bench presses with tiny, pink dumb bells. This decade and all its madness took us away from full body functional workouts to isolation and routines that about 2% of the gym populations can do or really needs.

Owners who worked in clubs in these days, as young employees, are now the ones building their club just like a Gold’s Gym from the early days. These guys are characterized by the statement, “You just can’t build a club without Hammer equipment and you have to have dumb bells that go up to 200 pounds or you will lose members.”

• 80’s: There were actually two groups that emerged from this decade, and both are still around and as bizarre as ever. The first group is still rampant in the clubs and still has hot debates online. This is the HIT group, or high intensity-training fan club of the glory days of Nautilus. Do one set, do it to your max, follow the circuit for 12 pieces of equipment and go home. Give it up people, no one wants to do that anymore and it has proven to fail. You may not even know you are one of these guys, but if you put your new members on a circuit and give them a workout card with the pieces of equipment, seat adjustments and a place for weight and reps, congratulations, you are frozen in time and it was a butt ugly year to choose.

This is why members quit you fools. You can’t sign up a member and never help him again, and you can’t in good business, or good conscious, advocate something we know will fail for the client, therefore, he will leave us. You only make money if someone stays longer and pays longer and the days of chasing endless replacements for lost members are so long gone. This guy is characterized by the statement, “If you can’t get it done in one set, then you didn’t do the one set hard enough. And yes, I do have a shrine in my office to Ellington Darden, so what?”

The other group from this decade is also still haunting us. The 80’s were the glory years for aerobics (not to be confused with the advent of modern group exercise), and any group person who was working in a club during the later part of that decade, or into the first few years of the 90’s, still believes that you have to change your class every week, that the instructor is the star, and that a microphone hanging off the side of the head is status. These ancient divas destroy group programs, because they just can’t stop being the star and can’t let go of the programs. This diva is known by the statement, “Workout music hasn’t been the same since Donna Summer retired,” but they can also be heard saying, “I think I still look good for a forty five year old woman without a single muscle in my body from all this cardio.”

• 90’s: This was the era of the first super Gold’s and World’s Gyms. These big boxes were quite something in the day and each one grew bigger as the owners all tried to out do each other. Fields of equipment stuffed tightly in one big room, cardio inches apart and free weights that would make a bodybuilder wish he could still get an erection. The clubs were all about whoever had the most equipment would win and it was bodybuilding heaven and circuit city all rolled into one.

Even the national chains jumped in and you still find the chains building clubs that are way to big to deliver service, but egos demand that the product has to be built big and expensive, even though the member simply doesn’t care anymore and there is too much competition to make the big pigs profitable. Anyone who was working in this era still says, “You just can’t build a smaller club. It has to be 40,000 square feet or you can’t compete. Besides, a smaller club would restrict your income.” This is, by the way, the same guy who is now competing against a 6,000 square foot hybrid-training club that is generating over $100,000 a month and kicking his over-leveraged ass.

• 2000: This was the decade of the reinvention of the low price/value club, the advent of the small town 5000 square foot model and the end of the 1500 circuit model. More happened in this decade than in the past 60 years in fitness, and some of it was even good. The low priced guys weeded out the marginal mainstream players, which was good for everyone else. The functional guys brought in a new era of fitness that is based upon individual results for the client and the end of equipment as service. The dysfunction of the economy validated whether the big chains really had a viable business plan, or were just coasting along with the endless supply of cheap capital stemming from desperate investors looking for an easy score. The economy won and proved that many of the guys with more than 20 clubs never had a frickin’ clue about what is really happening in the industry and they paid the price.

Everyone had a comment from this decade. The 1500 square foot circuit people cried because no one could believe that losing twenty pounds did not make you a successful business owner. The big guys blamed the economy, but the reality is that no matter how big your club is, or how much equipment you have, you still have to get results for your members and deliver customer service; something few if any of the bigger organizations can accomplish.

• The next step: Build clubs with one purpose: you have to get your clients results so they will stay longer and pay longer. This will be the decade where we finally realize that there is not an endless supply of new members, because there is simply too much competition. The look of clubs will change. The size of clubs will change. What is in clubs will change. The equipment companies will change their offerings or perish. Fixed equipment will become a small part of your offering. More will change in the next few years than in the last 30. Are you ready, or are you still stuck in the past listening to Metallica and wondering if your hair is big enough?

What I just read: Mike Boyle, the Boston bad boy of banging metal and functional guru to the rest of us mere workout mortals, just released a long over due new book, “Advances in Functional Training.” Mike’s new release is a combination of some of his best writing over the years infused with some of his current thoughts on training. This is a must have for any owner’s bookshelf and should be mandatory reading for all head trainers. You can get this book from Perform Better now. Mike will also be on the road at this year’s Perform Better Summits, which every owner and head trainer should attend. Many of you owners are out of date and need new ideas for training in your club. Don’t be frozen: go get some new info and see Mike.

If it's Too Late, Then it's Too Late

Published on 01/08/10 11:12AM by Thomas Plummer

This question appeared as an email I received around Christmas. The short answer, followed by the long answer later in this blog, is why didn’t you react to this about a year or two before they opened in your market. It’s a little late to take boxing lessons after somebody in the bar took your girlfriend, kicked your ass and called your mama a bad name:

What do you do when Planet Fitness moves next to you?

They have sold over 6,000 memberships at $10 per month with upgrades of $19 per month.
They killed everyone……. Mike T.

The following is a Seth Godin blog, which partially answers this question. Seth Godin is the guy who wrote Purple Cow, and about a dozen other books. I highly recommend you sign up for his blog and make it part of your business education each week.

In this blog, he talks about what happens when a generalist business gets hurt in the market, by someone delivering the same service, but now doing it cheaper and disrupting the market. This is the same situation that many mainstream fitness centers that are dated and using business plans from the 1990’s find themselves in when a low price club, such as Planet Fitness, comes to town. The important thing to learn here is that this blog only applies to generic box clubs and not niche specialists.

What every mass marketer needs to learn from Groucho Marx

Perhaps the most plaintive complaint I hear from organizations goes something like this, "We worked really hard to get very good at xyz. We're well regarded, we're talented and now, all the market cares about is price. How can we get large groups of people to value our craft and buy from us again?"
Apparently, the bulk of your market no longer wants to buy your top of the line furniture, lawn care services, accounting services, tailoring services, consulting... all they want is the cheapest. The masses don't want a better PC laptop. They just want the one with the right specs at the right price. It's not because people are selfish (though they are) or shortsighted (though they are). It's because in this market, right now, they're not listening. They've been seduced into believing that all options are the same, and they're only seeing price. In terms of educating the masses to differentiate yourself, the market is broken.
Fixing this is almost always a losing battle. Just because you're good at something doesn't mean the market cares any longer.

The Marx Brothers were great at vaudeville. Live comedy in a theatre. And then the market for vaudeville was killed by the movies. Groucho didn't complain about this or argue that people should respect the hard work he and his brothers had put in. No, they went into the movies.

Then the market for movies like the Marx Brothers were making dried up. Groucho didn't start trying to fix the market. Instead, he saw a new medium and went there. His TV work was among his best (and certainly most lucrative).

It's extremely difficult to repair the market.

It's a lot easier to find a market that will respect and pay for the work you can do. Technology companies have been running this race for years. Now, all of us must.

If Wal-Mart or some cultural shift has turned what you do into a commodity, don't argue. Find a new place before the competition does. It's not easy or fair, but it's true. You bet your life.

[Please note that nothing I wrote above applies to niche businesses. In fact, exactly the opposite does. You can make a good living selling bespoke PC laptops or doing vaudeville today, even though the mass of the market couldn't care a bit. How he got in my pajamas, I'll never know...]

The market has changed, have you?

If you have been following my blogs for the last year, or if you have ever been in one of our workshops, you know that I have been screaming for years that you have to find a niche in the market and own that niche. Without a clearly defined niche, you are at the mercy of the next low price guy providing the same service at a substantially lower rate.

Planet Fitness (PF) has been around for a while and has appeared in a lot of markets. Some clubs survive nicely against them and often even thrive, while others get pounded into submission is less than a year and then are gone.

PF was created by Mike Grondahl. He has two talented partners, but Mike is the creative force behind the organization. He took an old idea, which was to drop the price, and repackaged it into something new and exciting. He then wrapped a solid marketing concept, the Judgment Free Zone™, around the $10 model.
In other words, he created a niche for his company that competes on price, but is seen by the public as a place where everyone fits in and you can avoid the traditional meatheads and other less desirables that haunt the typical clubs. These bodybuilders and “so into myself” people are the ones, that in many consumers minds, are the people who use mainstream fitness and who intimidate so many regular people who want to work out, but are afraid of hanging out with idiots.

One of Mike’s classic quotes, brought out by a vodka or two, is that PF is a niche player and that many different types of clubs could all coexist in the same market, if those club owners weren’t so damn stupid. I actually think this quote is rather brilliant and sums up many of the problems we have in mainstream fitness today.

For example, if I run an old style box club, meaning I try to be everything to everyone, have a large workout floor, mediocre locker rooms, about 60 pieces of four-year-old cardio, and the traditional white walled group room with the eight foot mirrors turned sideways and the baskets of crap up against the wall, I deserve to get my ass kicked.

This type of club charges about $39-49 per month, gives the consumer three workouts with a trainer that is totally disinterested, sets the member up on a failure track of doing a circuit with a big stupid workout card and then the club forgets the person even exists. All this club does is rent equipment. The owner puts just enough money into the club to keep it open, is years behind in programming and training, and has a physical plant that is decades out of date.

A fresh PF comes into town and this same guy bitches that the competition is unfair, but in reality, he doesn’t really give a crap about his members or he would have been more up-to-date and would have specialized in a very specific niche in his business, such as family or upscale. The ear of the generic box is gone and you either change or you get ran over by someone that is fresh and exciting

The new player with fresh equipment and a clean club, and who is renting newer models of the same treads that the old guy owns, offers a price of $10. The existing owner has to deal with the issue that he is not in the member retention business, has no niche to protect his business and all he really does is sell memberships. Now, however, there is a new club that does everything he does for about a fourth of the cost.

No matter how long you have been in business, or how much money you have invested in your business, you are not entitled to success. If you can’t compete as a generalist (see Godin above), then you have to move on, because someone took your market and is doing a better job of it than you are.

Many good clubs compete well against a PF. The ones that are fresh, priced appropriately and are full service do well and can share the market. Where PF gets you is the Darwin thing; only the strongest, and in this case most prepared for battle, survive. If you run a good business based upon seeking a specific niche in the market, you will have a chance. Run a dated box concept from the 90’s and kiss your club goodbye.

It is also relevant here to mention the two management styles I mentioned in an earlier blog. About 90% of the owners in this industry are maintenance people, meaning all they do is try to maintain the flow. These owners are happy to hit last year’s numbers, hang on to equipment a year too long because it still works, won’t reinvest in the club except to keep it open and in essence makes every decision based upon the idea of protecting what they have. These are also the first guys that get destroyed by a new, fresh competitor doing the same thing in the market.

The other 10% are the growth guys. Their mission in life is to take a little risk and just keep pushing. Their clubs are current, they reinvest heavily about every 4-5 years in building a fresh physical plant, their equipment and training is relative to what is happening in the training world, and most importantly, they hire talent instead of settling for young dumb asses who work cheap and just fill slots at the front desk. If they get competition, they seldom hurt, because they have a niche membership and they are the source in that market for that type of club.

There will always be a new, fresh player coming in the market. Before PF and Mike Grondahl, there was the fear of LA Fitness, the fear of 24-Hour, the fear of Gold’s, the fear of Bally’s and dozens of others. There is always a new hot player, and there will always be a new hot player, in the market. If you want to know how it all turns out, read Darwin, because only the strongest and fittest for survival will survive.

The Foundational Truth will Set You Free!

Published on 12/05/09 09:44PM by Thomas Plummer

When you spend your life fixing all kind of businesses, you come to realize that there are really just a few fundamental laws that govern whether a business owner will succeed or not. Even if you read endless business books, and limit yourself to just the literally thousands released during the last few years, you will find that most of these books can be boiled down to the same key points buried in a lot of fluff and filler that makes that book unique. One of these basic elements that is recurring in all the good books that you must seek the foundational truth of your business.

I was in Orlando last week to do a few hours of management training with about 70 of the senior staff people from many of the YMCA’s in central Florida. It was a very motivated and talented group but most of the room had never been in a NFBA workshop before and had no idea what would really be taught. As with most groups, they initially requested me to do what most all groups want and that is for all outsiders to come and do training that supports their existing belief system, even when those systems might be dated or based upon false assumptions born from just too much of believing your own brochures and from too much inbreeding of ideas instead of seeking outside challenges that we all know force growth.

Where the Y’s could be more effective, and where almost all small business get in trouble, is finding the way back to the foundational truth of that business. The foundational truth is usually a single sentence that defines the business and why it exists. Stray from your foundational truth and you will usually fail at some point.

For example, one of my good friends in the industry, Norm Cates, co-founder of IHRSA and 1st President some 30 years ago and current publisher of the Club Insider, and I were having lunch in Atlanta and were discussing IHRSA and its current financial issues and image problems. The surface reason why a company such as IHRSA would be down in revenues and losing membership would be to blame it on the economy, but that is just too easy and doesn’t address the major foundational issues that will affect it as a viable force in the industry for years to come.

I believe IHRSA has simply strayed from its foundational truth and that it can’t be fixed until everyone recognizes why it is broken and why it can’t be merely patched. The foundational truth for IHRSA is that it is a trade organization that exists to help all fitness facilities of any size or function to be more financially successful. If this foundational truth is correct, then almost everything they are currently doing is wrong.

For instance, why pay Bill Clinton an enormous sum of money to speak for an hour and a half at a national convention? How does that match the foundational truth of the organization if they exist for the sole purpose of helping fitness businesses become more successful? This decision doesn’t work with the foundational truth because Bill Clinton does not help any fitness business become more financially successful; therefore, there is no valid reason to pay him huge money merely to entertain fitness people.

The membership of the IHRSA trade association would be better served, and the money better spent on that membership, by bringing in as many small business gurus, such as Larry Winget, Jeff Gitomer, Tim Ferris or Paco Underhill, as they can afford and let these guys all do three-hour workshops. Sadly, you could probably get all these guys and more for what they wasted on Clinton, but when you forget why you exist then there are no guidelines to follow and everything you do becomes a disassociated random event.

In this example, the foundational truth, to help every fitness business of any kind become more financially successful, wasn’t serviced by that choice of speaker. Either what you do enhances the foundational truth of the business or it violates that truth and should not be done. Another example by IHRSA is CBI Magazine, which is a slick piece that is almost totally irrelevant to any owner looking for ideas and leadership that should come from a national trade association dedicated to my business’ success. The magazine is a great magazine but it is not designed to support a trade association whose purpose is to help its members become more successful, therefore, it should be radically changed to meet the foundational truth.

The Y’s, which are as far from IHRSA as you can get philosophically, also suffer from a disassociation from why they exist. Remember, Y’s are one of the oldest fitness organizations in the country and the longer you in exist in business the more likely you are to stray from your foundational truth. Y’s have been helping people longer than every other chain in the country has existed and the Y’s deserve our respect even if you don’t agree with how they function.

To me, the Y’s have a very self-evident foundational truth: Y’s exist to change as many lives as possible in their competitive market. They don’t exist to service the community. They don’t exist to provide family fitness to those in their neighborhoods. And certainly not to for the vague reason, as the YMCA national website claims: The nation’s 2,686 YMCAs respond to critical social needs by drawing on our collective strength as of one of the largest not-for-profit community service organizations in the United States. This is a noble statement, but how do you lead hundreds of staff and project change into the future with such a broad, hard to intercept claim?

Y’s do great work, and yes, I acknowledge the tax issue that has been debated ad nauseam, but setting that issue aside, Y’s fill a family gap that is lost in most markets. Orlando, for example, is flooded with almost every national brand, but the Y’s are the only organization that is truly embracing families in that market. They do a great job but all Y’s could do better if they return to the foundational truth, which again should be to change lives.

For example, most Y’s are truly lousy at sales and many directors feel that even the word “sales” is almost evil in intent. And if the Y people use the traditional definition of sales in this industry they are right. Sales, as done by many of the big chains, are harmful and degrading to the client and all of those dated tactics should be avoided at all cost in mainstream clubs and Y’s alike.

But Y’s exist to change lives, or at least should if that is the foundational truth. If someone visits a Y and is handed a brochure and left to do their own tour, or simply walks around with a young counter kid, then the Y’s have failed that person and have failed the foundational truth. Someone came into a Y for help and the Y staff, in a knee-jerk overreaction to the mainstream sales systems used by the nasty big chains (we’re not like those bad people), often goes too far the other way and doesn’t even have competent people to explain the prices and the many, many options a typical Y offers.

The Y failed the client because the client came in for help, was ignored beyond a “hello and here is the brochure,” and left to do their own tour or perhaps spent a few minutes with a undertrained counter kid, and then after wandering through a large and confusing physical plant, walked out because fitness is not rooms of equipment, it is a support system, and you can’t understand that with a quick walk through in a vast building.

This potential member might then sign up at another club and we all know that if a de-conditioned person that becomes a member at some of the big, sales driven chains, will be eaten up as a sales number and left on the floor to die. He will fail because those clubs exist to get sales numbers, not change lives. The Y, because of a dated and misguided sales belief, actually hurt someone here because the person trusted a Y for help and guidance and no one developed any type of system that could powerfully help the guest realize the true difference of working out in such a family driven and supportive culture. In this case, the Y’s forget the foundational truth: we exist to change lives and we have to start that process when the person first inquires.

If your foundational truth were to change lives, then the Y’s would have to change their definition of sales. Sales could be redefined as: helping people get the help and information that they trust the Y’s to provide. Again, if the foundational truth is correct, then how most Y’s sell is wrong, because you can’t change a life if you can’t get the person into your system. Remember, the anti-sales belief sent this guy down the road to another club, which goes totally against the culture of caring and family that the Y’s own and do so well and against the truth of changing lives.

We forget, as do our Y friends, that most people who inquire about fitness at a family style club are often confused and frustrated with fitness and many are scared or had bad experiences somewhere else. The sales encounter is exactly the place you would want to have your best and most highly trained people, meaning the ones who are patient and understanding, meet all potential members and to spend a lot of time answering questions and making sure the person understands the Y’s culture and sense of family, two of the things the national Y’s do better than most other mainstream clubs. You just can’t do that with a cheap brochure and a guided tour by a young, inexperienced kid.

Drifting from the foundational truth affects all businesses, no matter how big or small. If you can’t define your business, and the purpose of that business, in one sentence, then you can’t make the decisions you need to make, train your staff, or even market your business because you don’t know what the hell you are trying to accomplish.

When you explore your own foundational truth, start with the question, “Why do we exist?” Then ask, “What are we trying to accomplish with this business?” Avoid the trite making money statement. Making money is what happens if the foundational truth is correct for your business.

If your business isn’t performing the way you expect, then always return to the foundational truth first. If you can’t define your business simply, and what you are trying to accomplish with that business, then how do you train staff, market, and even paint the place because you are making random decisions based upon the situation at hand, rather than informed choices based upon fulfilling your truth.

Most importantly, you sometimes have to realize that you are so far away from your foundational truth that you have to tear it down and start again rather than patch and keep following the same flawed rules that are destroying you, such as IHRSA tries to do. In many ways, IHRSA is the same as the Y’s with a lot of good people who need to return to the truth that created both of their organizations.

You Can't Fix Stupid

Published on 11/23/09 02:56PM by Thomas Plummer

Darwin had it right: people who evolve progress and those who don’t die.

It is no different in the fitness industry. Those who are evolving make money and those who don’t fade away. This is true for not only the club side but for the vendor side as well. Many companies out there are hurt now, and most blame the economy, but if you look at their product lines and sale forces, you understand that saying, “You just can’t fix stupid.”

Here is my list of what’s stupid in the business today. These are just opinions based upon what I see in the industry but if I can figure this out so can the consumer. It’s also the list of things that probably won’t change because those doing these things don’t understand that these are the things that are killing their businesses. Oh well, stupid is as stupid does, to quote the great philosopher Forrest Gump:

• How many times does the market have to demonstrate to Nautilus that their products are not salable except to trainers who grew up in the 70’s and still believe one set to failure is the hottest trend in training?

• Bally Total Fitness seems to build a culture of failure into its business model. High-pressure sales, little help for the new member, price-driven marketing and dated clubs full of dated equipment make up their plan. Life Time Fitness strives for a culture of success. One company goes bankrupt several times and the other has become the big chain role model. Are they even in the same industry?

• Is there anyone on the planet who doesn’t realize that giving a member a 12-piece circuit workout written on a big card and kept in a box on the side of the floor is just bad business? The circuit doesn’t work. The equipment doesn’t provide service. The member fails and goes home feeling like the club let him down.

• When will we realize that bigger is not always better (easy now)? It is virtually impossible to provide service in a huge box, even if you have the right intent. As clubs embrace more functional equipment, while cardio remains strong, the clubs themselves will become smaller because we just need less space. Who is going first?

• When will we realize that it is hard to run a financially successful fitness facility if you’re fat? If you want to make money, you have to embrace business management, weight management and training. You can’t just decide to be a businessperson and ignore the foundation of our business. If you don’t workout, go sell cars and get out of the industry because you are a bad role model.

• I respect IHRSA but when are they going to understand that if they don’t return to their foundational truth--that their sole purpose is to be a trade association dedicated to making every club financially successful--they will never penetrate the industry in this country much beyond 10 points are so?

• One of the single biggest mistakes owners make year-after-year is that they will not learn how to hire and train people. If you hire stupid, you get stupid, and if you are leaking members away each month then why would you not start with the simplest thing to fix, which is customer service?

• White is not a color. Color through paint is a cheap way to change the energy in your business. Call someone like Rudy Fabiano and invest in getting good colors in your club. It’s cheaper than you think and you need it

• Who will be the last gym owner in the industry that still believes knocking off a fake $100 if you join today works in today’s market? If the client does believe it, he is too young and dumb to be a member

• Yes, there is something to that whole karma thing. Owners who continually screw their members and vendors end up losing everything at some point and this makes the universe very happy, and puts a smile on the rest of us too.

• All the innovation in training is coming from the training clubs and the functional gurus, such as Durkin, Boyle and Cook. The training clubs are the cavemen with very sharp spears and the old box clubs are the mammoths with nothing but a cliff behind them and no place to run.

• Good business is good business and the basics are the same for any fitness business no matter how big or small. Create a concept, market it to the public, convert the leads into sales, service the members you do get, train your staff daily and work on retaining the ones you did get. It is that easy and the only difference between a big club and a small one is how the rules are applied.

• Nonprofits have to stop thinking that they are so radically different. The fitness member who stopped at your club, but signed up at the nonprofit down the street, is the same person with the same service needs and the same issues. These nonprofits are just as likely to make the same mistakes as the for-profit guy but they always claim the higher ground that they are morally superior because they aren’t in it for the money. You still have to change lives and get results and the old technology and philosophy that the nonprofits taut can’t be overcome by thinking you are working from a higher plane of existence because the mainstream club is trying to make a living doing what he loves. Working for a profit might actually make you more efficient and you might get better results, but not always.

• Trainers that still put clients on split workouts with Monday as chest and triceps day need to go home now. Your day is over and the adults need the floor

• You have to stop letting your staff dress like a bunch of homeless people. People don’t trust you with their money when you are wearing a tee shirt and baggy jeans. Get a life and get some uniforms.

• Why are some of the national equipment guys, such as Star Trac, so progressive and build for the future and others still are selling equipment that was out of style in the 90’s?

• Why do the writers in Men’s Health know more about fitness than the average owner who has a fitness center?

• Young is cheap but it isn’t usually smart. That goes for dating and hiring staff.

• Here is yet another point on the medical community. Someone asked me how to build rapport with doctors in order to get referrals. How many doctors actually work out? Why would they refer something they don’t do? If you want to penetrate that market, give a bunch of doctors a free year, hook them up with a trainer and change their lives. It is easy to get referrals from someone who just lost 10 pounds.

• Call your mama and ask her if you were dumb as a child. If she says yes, you might be overachieving, which makes you even better than you thought

• Why do owners have group programs and then never do the classes? These owners have no idea how badly they might be represented by a whole bunch of people who hold you hostage by doing something you won’t take the time to understand or control

• Why is it that every successful owner I talk to can show me a written business plan as to how he will make money and every one that isn’t making money can’t show me any type of plan except for a bull…. plan they had their accountant do for the first business loan?

• How much time did you spend last month looking for good staff? If it is under an hour or two, you probably own what you deserve.

• If your staff is always showing up late because they were out late and partying big then fire them and stop hiring stupid young kids who stay out late partying and think that is an excuse to come in late. Again, you got what you deserved.

• Spending more than you make builds a great, lost decade of your life but it doesn’t build a life.

• Why do owners look so surprised when they lose half of everything to a spouse who did nothing more than stay home while you tore it up with one of your employees and then got caught in your own business?

This list could go on forever, because stupid has no limits. Progress is slow but by refusing to be dumb you can accelerate the game. If you are not making the money you expect, always, always return to the fact that what you’re doing isn’t working and the only way to change the results is to change the action.

We just came out of Atlanta and it might have been the best of the year with over 130 people. Our last gig of the year is in Phoenix and then it is off to 2010. Get your people trained and be ready for a great January-May.

The Power of Personal Motivation & Why Rachel Cosgrove is a Success

Published on 11/12/09 10:22AM by Thomas Plummer

Literally thousands of people have passed through our workshops over the years. If you do something like this long enough, you eventually encounter almost every type of personality, mindset and intelligence level imaginable all seeking information that they hope will change their lives and their businesses.

I strongly believe in the foundational truth that everyone, no matter what they do for a living, how much money they might have, or how successful they are, deserves some respect. The exceptions to that rule are the people who spend their life wasting their life by refusing to accept personal responsibility for their current condition.

Through the years I have noticed a certain small percentage of folks who are a little more driven than the rest, a little more personally motivated and perhaps a little more intense when it comes to defining how they want to live their life and the standards they are willing to live with in their quest for something more.

As I have aged, and gained a little more gray around the edges, a few of the people who find our workshops seek me out for coaching in their lives on a personal basis. In the earlier years, the coaching was always about business and money but as I have gotten older, and gained more of a father type figure look, the seekers are now looking for answers to life issues and personal coaching as to how to get the most out of what they have and how to live their dream.

This responsibility and opportunity to work with young, talented people has given me a viewpoint from which to comment on what it takes to rise to another level in your life and to achieve personal success no matter where you are at now or what you started with on the journey.

It would be easy here to throw out a few trite sayings about success. We could always use that successful people are great goal setters. We could also mention that people who achieve a certain level of personal growth were never quitters. And there are always endless other words, such as “motivated,” “determined” and “winner” that always appears in the success literature. But after watching for years I don’t believe these words are always the right ones to predict who will rise and who will simply maintain.
About 12 years ago, two young trainers set in the front row of a workshop, one furiously taking notes and the other rubbing his head with his hands and quietly swearing in Scottish under his breath. The information they were hearing was challenging their belief system but both understood that what they were doing wasn’t working as well as they hoped so they were open to new ideas.

These two students, Alwyn and Rachel Cosgrove, have gone on to be two of the most recognized names in fitness in the world and have changed a lot of how the rest of us think about how to train people. They have also built a wildly successful training facility and are now mentoring others on how to succeed in such a competitive business.

If you’ve read any of my other stuff, or have been to a workshop or advanced school in the last several years, you have heard me mention Alwyn and his rise to international guru, but this blog is really about Rachel and her success, especially with her new book that just came out this week.

Me being me, I would love to take credit for their success but these two would have been out of control and crazy successful if they simply lived in a closet and only came out occasionally to publish something new or to make money for a while. Their success was not derived from outside sources but from within, which is the whole point of this blog.

It has been a pleasure to watch them grow over the years but it has been Rachel that has been the model of success worth noting and studying. Many spouses, especially those living with an already recognized guru type, never achieve their own level of success because the other spouse cuts off the light and you never really get a chance to live your own life.

Rachel has gone from great trainer, to financially successful business owner, to dedicated mentor for women and now to nationally known author. Her new book, The Female Body Breakthrough, was just released this week after a long journey and I think it is one of the best training books I have ever read or has been written.

As I mentioned above, when you get a chance to watch someone develop over a number of years, many of the traditional trite words that define success simply don’t apply. What has made Rachel successful and what can the rest of us learn from her personal journey.

When I think of Rachel, several things pop into my head. The first word is “discipline.” The act of writing a book, while running a business and living a full life, is mindboggling. Rachel emails me so early that I am barely awake on the East Coast and she is three hours earlier on the West Coast, which puts that email at about the, “What, she is up writing already?” hour.

Personal discipline is a lost act in most lives. We encounter clients who lie about what they eat because they know they are out of control. I have consulting clients who set out with a plan and good intentions but weeks go by with very little being accomplished because they can’t find the time, or the discipline in their life, to get things done.

Discipline means being able to set priorities, which might get us back to the old goal setting concept. Decide what you want, and then arranging your life so you can achieve it is rare and maybe one of the key talents Rachel has mastered in her life.

Another unique thing about how Rachel achieves is that I have never, ever heard her say, “I don’t know if I can really do that?” One of the things I admire about her, and that I see in other successful people I respect, such as Greg Rose from Titleist or Todd Durkin, is that she lives by the concept that anything is possible if that is what you want to do.

Write a book? I can do that. Build a successful business from the ground up and reinvent the business concept along the way? When do we start? Hang on to that business while my husband is locked in a hospital for two years fighting for his life? Sure, if that is what it takes to be successful then bring it on and more after that.

No limit people are often the most exciting people to hang out with at a bar? Sit around a table with Rachel, Alwyn and some of the other notables in our fitness world and you never hear anyone question the ability to get anything done. People are writing books, building new businesses and offering radical new thoughts on their DVDs about the evolution of fitness but no one questions if they can do it. They simply get up in the morning, follow the plan and then change the world.

Rachel has also taught me one more thing about success. I’ve noticed in her the personal belief that what she is doing is the right thing for her. If the thought above was no limits, maybe we can define this one as no doubts. She has found her personal mission and is prepared to live her life on that path. Each step leads to the next and her belief in mentoring women and defining fitness for women has created a rich and full life for her with so many years of success yet to come.

I think one of the richest moments in life is when you learn to celebrate someone else’s success. I am proud of having Rachel as a friend and I admire her journey more than most because of what she has gone through to achieve that success. I hope everyone buys her book and if you are in a training studio I highly suggest you buy many and give one to every female client that comes through the door. It is not only a way to train for you but a motivational tool for your clients.

You can order the book at www.orderthefemalebodybreakthroughtoday.com

Web Pages in the Fitness Industry

Published on 11/04/09 05:58PM by Thomas Plummer

Most web pages in the club industry are just short of so worthless why bother. I am asked often, however, if there are any good ones out there worth looking at and is there any thing you can learn from these sites.

The best site live site right now by my judgment is Goperformanceandfitness.com, a site developed by Jared Kuka for his Go Performance club in Nashville. I often use clips from Jared’s club in this year’s workshop because I feel he has created the next generation training facility that almost any trainer could own in almost any market.

The club is 5000 square feet and embraces many of the principles I think are important in a club, including training men and women the same as athletes, fully functional equipment and performance training, and trainers who are more coach than clip board cowgirl.

The thing that makes his web site so powerful is that it almost entirely video driven, which is a huge step beyond endless copy and still photos. In the world of instant gratification where most people live engrossed in Youtube, Facebook and Twitter, video is the tool of choice and of getting and keeping attention.

The video that is attached to this blog is a strong sample of how good a site can be. The production quality is fantastic, the testimonial aspect is extremely strong (see the last blog on marketing) and most of all who see is and what she is doing is completely believable. Watch her do this and you think immediately that hey, I want to do this too and most importantly, watching her do it proves that a slug like myself, sitting at home eating bags of nasty chips, can get off the couch and get my fat ass moving as well.

(click here for video)

One of the common pushbacks I get in the workshops when we discuss group personal training and semi-private training is that this type of workout is fine for someone already in shape but no average person would do this. That is when I show the Sally H. clip and prove that if she can do it, and is happy doing it, then any of your members can do it as well.

Another strong aspect of the site is that the first thing you see is a video that appears in the center of the screen. Immediately you get sucked into the site and the large buttons and mostly video content keep you there. Remember, the longer you stay on the site the more likely you are to take some type of action.
This is also why guys such as Anthony Diluglio do so well with their web sites. He currently has well over a 100 videos on his site and once you get there you need a six-pack of beer and a yellow pad because you will be there for at least an hour and want to take notes. Of course, the longer you stay the more likely you are to buy, which is the whole point of keeping you trapped with great video.

You can also use this type of video in your club at point of sale. For example, you could have a 32” flat screen near your sales area and introduce your prospect to a few of you members by video before you tour. These videos induce the need to move and once you watch a few you will probably tour the club with an entirely different perspective.

Costs vary on these shoots and Jared shot several at once keeping the cost down. If you’re going to shoot these for your club, make sure your folks start with Jared’s site because this is the quality you should be striving for in your work.

Another aspect worth exploring is how Jared does the montage clips of a lot of things going on in his club. These short bursts can get you fired up about working out, introduce you to an entire style of training you might not have ever even seen and the music gets you inspired to watch the clips several times.
These clips should also be part of your Youtube presence and at some point you want to get your own camera and start posting short 30-second clips daily from workouts or other high-energy activities in your club.

One other point about these clips is that if someone goes to your site and sees this type of clip and workout and then visits another club’s typical website, you will win the battle to get someone to visit you first. Keeping this in mind, you should have a large capture on your site, meaning a button that says, “Try us risk free.” The capture is simply a way to get someone to fill out some information in exchange for a guest pass to the club that the potential member can print out himself and bring with him.

Don’t worry, I am back

I received a number of emails concerned that I haven’t blogged in a few weeks. October is typically our worst month when it comes to travel and being out of town and this year was no different with me being home for only about four days. The blogs will resume weekly as always starting with this one. If you have any ideas or questions, post them at the end of this blog and I will start to address the ones that might work for the large group.

Why Most of Your Marketing Fails!!

Published on 10/14/09 04:02PM by Thomas Plummer

Most of your marketing is a waste of money because many of you forget what marketing is actually supposed to do.

Marketing, done correctly, is supposed to drive someone to take action. This action might be to buy your product directly or to respond through a call or visit to the business where a waiting sales person who has the skill will get you to part with your money.

This urge to respond can only happen if there is an emotional response to the advertising. We buy because we become emotionally connected to the story or ad content and we don’t buy if there is no tapping of our emotional keys.

We buy Volvos because we want our kids to be safe. We buy Pillsbury products because they remind us of life we might have never even had. We buy expensive alcohol products because we want to be beautiful and successful like the people drinking them on television. Every good ad has reached our soul yet in our industry we are still years and years behind.

Most club marketing fails because it is void of an emotional content. If you look at a typical ad in our industry, you find almost the direct opposite of emotion. Most ads are boring, lame and a pathetic waste of money because the owner left the design of the ad up to the sales person that sold him the ad. The goal was to get something out quickly, throw in a few stock photos and add a price discount of some type and let it go.

This is why you find ads with headlines such as, “Fitness for everybody!” or “Where fit happens!” These generic masterpieces are then followed by a standard stock photo of an impossibly fit person leading to bullet points listing everything the club offers. For example, here are the bullet points from a club I just visited that are listed in their brochure and in their local ad in the paper. The headline read, “You will see and feel the difference.”

• Marble counter tops in the locker rooms
• Super clean
• State-of-the-art equipment
• Granite steam rooms
• Over fifty treadmills
• Lots of free weights
• Tile entryways
• High ceilings
• Trainers on staff at all times

You can’t make stuff like this up and I would have never listed marble as a point even if I owned the business. What purpose does a list like this serve? Doesn’t every fitness center have fitness equipment? Is marble going to make me run to the club for the deal of the day? What a waste of money and energy to produce such worthless advertising that does nothing but devalue your brand.

The question is who is the target of this ad and what is the expected response? Marketing theory is as old as marketing itself but we forget the basic tenets. Rule one is always remember that features don’t sell; benefits do. This ad lists all the features of the club, or the things that you will see if you visit the business.

Rule two is what is in it for me the consumer. I don’t care what kind of equipment you have as long as you can get my fat ass in shape. It’s not the tools (or features) it is what you do with them that is important to the consumer. But every owner breaks this rule because if I paid for marble and high ceilings I am going to tell someone about how much I spent even if it doesn’t bring anyone in to my business. This guy paid big bucks for the marble and someone is going to hear about it.

The emotion here is loaded on the wrong side. The owner is emotional about what he owns because of pride and cost but the potential member just sees it as another fitness facility with another long list of fitness stuff that is really no different from any other of the large number of clubs in the same town that by the way, just list all of their stuff too.

There is no response without an emotional driver and without answering what is in if for me as the consumer. Fitness marketing fails because it is always unemotional centering on lists of stuff rather than trying to touch the consumer’s soul.

But what about running price in our ads? Doesn’t a deal or discount answer the question of what is in it for the consumer?

Price is based upon a wrong assumption. When you run price you are assuming that everyone in the community has already made up their mind to join a fitness facility (prior interest) but they are hanging at home anxiously waiting for the local club to drop their pants, and price, low enough to move them off the proverbial couch.

The fallacy is that only about 16% of the people in this country belong, or have ever been in, a fitness facility. The ones that have experience and are fitness practitioners know where the clubs are in their towns and have already tried most of them. Price ads do burn up the folks with previous experience when first introduced into a market but after a while these ads become more and more ineffective because price ads do nothing to create new business merely drawing from a base that already had experience.
The logical thing to do here of course if you own a fitness business would be to chase the other 84% that have never set foot in a club. Why fight for crumbs when you can eat cakes. The ad copy above, for example, only chases people with some type of preexisting fitness experience. They are the ones who do have basic expectations about a club and who might be looking for specific equipment or services. But the bad news is that fitness people are already in the club so why are we constantly advertising to people who already get what we do?

It’s kind of like advertising giant burgers to fat people. They have already bought and are proudly displaying your product over the top of their pants. These people have tried all of the burgers, selected the one they deem best, and eat there a number of times a week, hence the problem but you don’t have to advertise to this group to get them to buy. The real money here is in chasing the casual diner or perhaps one who doesn’t have experience with your product.

The opposite is to focus on developing new interest in the 84% who have not yet made a leap into fitness and not cater to people who already have fitness experience. In other words, all your marketing should be centered on developing interest and future business. If you get this, then the types of ads you would run would be totally different than a typical naked model/bullet point hell ad.

Developing interest is a completely different mindset than trying to attract fitness experience people. Instead of price as your main attraction, you would first have to create a new awareness and need in someone who has no experience or any reference point about what you offer.

Keeping this in mind, most of what we do won’t work. Hard body fitness models become the enemy and entry barriers to that deconditioned female, rather than a role model. Price discounts and specials are meaningless since those in the 84% have no reference point to compare against since they don’t have club fitness experience. Bullet points are also ineffective because they list items and services that are assumed to be part of any fitness facility. I have said it before too many times, but you never see an ad for a hotel that states: Stay in our Sheraton, we have beds. Beds, and fitness equipment, are nothing more than presumptive things any good hotel or club would offer.

Again, if we want to tap the 84% we need to tap the emotion. The only way to do this is through the use of testimonial ads.

Emotion is the last, great, unexplored region in fitness business marketing. We sometimes allude to emotion, such as an ad that gives reasons to workout. Feeling better about yourself, or looking better in your clothes, are the by product of fitness, however, and not the direct reason someone goes to a club.
It’s what drove the person to join in the first place that is the source of the emotion. Feeling better about who you are is a noble ambition, but it is not what makes people get off their butts and change behavior. Sitting in the dark crying about your weight because of fear and loneliness is the driving emotion and that is the one that needs to be tapped if we want to develop future business. This person joins a gym because of the avoidance of pain and not just to look better in a mirror.

Emotion is often dark and intrusive, which is why we haven’t yet used it as a tool in our industry marketing. But the rules are changing, especially when we are faced with 63% of the people in this county either obese or just plain fat. When you’re in a fight with a tougher opponent, why fight fair? If you’re losing hit him with a car jack, run over him with your truck, or in the worse case, force him to watch a Sarah Palin speech. You’re losing the battle so fight dirty to win.

I wrote in my latest book, Naked Woman at My Door, that many people would rather die than change. Smokers know it is killing them yet they can’t stop. Obese people in their 30’s who already have medical issues know the weight is going to kill them but it is harder to admit your dying and change than it is to order a double cheese burger with a diet Coke™.

Testimonials are the only tool we have at our disposal that can begin to reach this level of emotionalism needed to get someone to try fitness. Testimonials done correctly are your tool to place the prospective member into your business and associated with the struggles and success of the member you highlighted. “If he can lose 20 pounds so can.” “If she can come back after three kids and look that good then I can do it because she is just like me.” “Wow, I know that guy and if he can do it then I can too.” All of these are responses that should be elicited by a strong testimonial.

Good testimonials are about normal people making change. They give people hope and a role model for success. Testimonials also prove that you have normal people in your club and that you are not filled with just fitness freaks that were born and will die in outrageous shape.

The Susan K. Bailey Company, based in Canada and which is the largest full service ad agency in the industry, developed the attached testimonial. The “Find Your Reason” idea was something we trademarked through the NFBA several years ago with the hope of someday doing a supportive web site and national campaign. The idea behind this campaign was to force the person to admit that you may not want to exercise for yourself but there might be others, such as your children, who may be the driver that finally gets you moving.

Study this ad carefully. I believe it represents the first generation of ads that targets the 84%. It was carefully aimed at people who have never been in a club before and who haven’t yet realized fitness is going to be in their life. Start your thinking now for next year’s ads and realize that lists of fitness crap is really just that and isn’t the tool you need to attract people to your business. Tap the emotion and you will find more members and for most of you testimonials are the only ads you should ever run.

The More We Learn the Less We Know

Published on 09/29/09 12:59PM by Thomas Plummer

Sooner or later, the pendulum has to swing back in our favor. Everything that is bad for us in this country eventually becomes viewed as nasty, a backlash forms, and we revolt against what is hurting us and move ahead.

Cigarettes peaked several decades ago and now you are morally a bad person if you smoke. The judgment zone went from socially cool and featured in the movies, then came the first levels of being unacceptable, to yucky, to socially unacceptable, to you must have a rotten soul if you smoke. The pendulum swung from glamorous all the way back to deviant in just a matter of years.

Fitness, and especially weight management, has to swing our way because we just can’t get that much fatter. We are slow learners in this country but when we do get pissed we have the brain trust and the resources to declare war on any issue that really pisses us off. Right now, we are just at the point where the pendulum has swung all the way out and is hanging at that weightless point before plunging back toward what we all know and believe: fitness matters and a healthier lifestyle is relevant in this county.

We are also in the stage where we do know what has to happen and we are learning how to get people fit. What we can never agree upon, however, is how to eat. One man’s healthy feast is another’s source of fat gain and until we get a little more unified in our beliefs, we might be doing more harm to the clients than good. Here are a few examples of the more we learn the less we know:

• Why is every recommended diet result in one third losing weight, one third staying the same and one third gaining weight?

• Why do fitness centers, the alleged source of the fountain of youth, suck so badly at even delivering the most basic of weight management information and support?

• Dieting is nothing more than the absence of the crap food you were eating on a temporary basis. You lose a few pounds then eat the crap again and get fat again. Until we teach people how to eat healthy nothing will really change.

• Why are most nutritionists so out of touch with people that move everyday? Why can’t they understand the difference between an active adult and one who has never moved?

• How come drug ads on television are now trying to make taking drugs a badge of honor? The drug makers make having a perceived illness as something that makes you unique and something you can flaunt to your friends.

• If you don’t fix the children, you will never change the adults. Most adults over 30 that are really out of shape won’t change and we shouldn’t even bother trying to change them. The ones who seek change will find us but most will be locked in for life because the habit of being fat is too much to change if you haven’t seen the importance of fitness by that time in your life. Change the kids and how they think about fitness and you will change the future.

• Any woman under 30 with low cut jeans, a short top and a roll of fat hanging over the side should do prison time. Any guy over 30 with a wife beater shirt and hat on backwards should be sent to Iraq as an Al Qaeda practice dummy. These two points have nothing to do with the blog but I feel better venting.

• Why hasn’t mainstream medicine explored metabolic typing as the only form of diet? It just has to be common sense that a person is an individual and that there is no one diet that fits their age, metabolic makeup and current health condition. Read William Wolcott if you don’t know what I am referring to here. Individualizing food and diet has to be the only thing we haven’t tried yet.

• Most trainers are too extreme in the eating suggestions. What person is going to eat dried chicken, white rice and broccoli out of Tupperware for the rest of their life and be happy about it? Because we don’t know how to eat we suggest extremes for everyone, which helps no one.

• Keeping the last two blogs in mind, how come I have only met one doctor in 30 years that starts with lifestyle as a treatment rather than just suggesting side effect inducing drugs for life? Exercise and healthy food can cure more disease than the drugs that do nothing but mask the symptoms neglecting the origin of the disease itself.

• Whole, fresh and natural are words never used by anyone who orders food for an airport.

• Most of us believe that getting in shape is about 85% of what goes in your mouth and about 15% of how you move. How come the vast majority of fitness facilities only sell the 15%?

• It is scary to see heavy women in their 30’s with mobility problems. Where will it end and who will pay for her lifetime medical conditions?

• The better the running shoe, the more likely you are to get hurt. If you love running and run for the shear joy of getting away from everything read, Born to Run, by Chris McDougall. It debunks running shoes as the solution to injuries and makes you want to get out the door and move. This guy might single-handed bring back the running craze and get people moving again.

• Why can’t we just admit we are wrong and simplify fitness again? Dan John is still right. Fitness is as simple as picking up something off the floor and putting it over your head. We make training too complicated for most people. Simple is good and simple gets results. If you own a club or are a trainer, read his book, Never Let Go. We have some of the few copies you can still get through the NFBA. It is a must read if you are in this business. Also look at guys like Anthony Dilugio and his Art of Strength site. There is no simpler approach to fitness than one person and a couple of kettle bells in the back yard. We should be the ones teaching simple in the clubs and by the way, anyone spending an hour walking aimlessly on a tread in your club to lose weight isn’t going to get there. We can’t change them all but most members would really like to understand that hours on a tread don’t lead to weight loss. If you can’t explain HIIT then see Alwyn Cosgrove’s site.

• We have 40,000 fitness centers in this country and yet we are still getting fatter as a nation. Maybe it’s us? Maybe we just aren’t helping as much as we think. Maybe we need to rethink fitness and how we teach it in the clubs.

• Get results with your members and you will never have to advertise again. Do you think that the guy who invents stuff that will really grow hair will ever have to advertise it?

• Supplements are great. Supplements kill you. I am going with great because I know what’s in that McDonald’s crap. Your higher income members are looking for guidance in supplements and you should be offering that information.

• If you are wearing it, you ate it. Shut up, workout and stop blaming someone else. It’s your fault you’re fat and nothing changes until the fat in your head understands the fat on your butt. Wouldn’t you like to say this to a bunch of whinny members?

• The pendulum will change when the politicians get involved but they are mostly so out of shape that we may have to wait a while for anything to happen there.

• I don’t understand why movie stars are in shape but their fans aren’t? The teenagers think just starving gets you there but tell that to Angelina Jolie or Beyonce: fit freaks who get it done. I wish they would share the work they do to get the bodies they have-it might change how others think about fitness and dieting.

• How can fitness be done sitting down? Everything we have done since the beginning of time has been chase stuff, catch stuff and eat stuff but we take a deconditioned (nice word for too fat to move) person and immediately sit them on a recumbent, then move them to a row of machines where they sit or lay down while exercising and then we have them sit at the juice bar. What in hell are we thinking here? The last thing a struggling overweight person needs to do is sit more. Don’t be the club that has mastered the art of ass sitting. Embrace movement and all the training that goes with it.

• Why are guys like Mike Boyle, Gray Cook and Todd Durkin so right and yet so few hear and learn? There are gurus out there talking about how to do it right but mainstream owners are very late to that dance. If your business is flat, one reason might be that you are selling pagers in the age of IPhones.

This list could go on for quite awhile because the more I learn the less I know and I want answers. This is a glorious business that changes lives but we could do so much more if we can simply move ahead in our thinking and stop doing fitness by old habit. The pendulum is coming our way but I am afraid it will just smack us on the ass.

The Medical Community Doesn't Get What We Do

Published on 09/24/09 04:37PM by Thomas Plummer

The last blog on personal responsibility triggered a small debate concerning how we as an industry can induce a tighter bond between the fitness world and the medical community. We all dream of this partnership and the money it can provide, but there are huge barriers that are preventing this with both sides unable to solve the issues that could bring us together.

Paul Grymkowski, one of the legends in this business who was instrumental in building the Gold’s gym brand into an international presence, asked in his response to my last blog how we can get both sides to understand and build a continuum of care that would benefit both the fitness world and the national health of this country.

First of all, the new generation of fitness professional is seeking a wellness solution for their members, which is something the chains have been unable or unwilling to go after in the clubs. This total fitness and wellness solution often contains total body functional training, nutrition guidance and weight management, supplement support, and other keys to a sustainable healthy lifestyle. Our weakness is that few clubs have all these components as part of their normal offering but that is changing, especially in the smaller clubs (3000-12,000 square feet) built upon the premise of providing a complete solution to living a healthier lifestyle.

On the other hand are the clubs that work against almost everything that is right for the client. These membership mills do nothing more than take membership money, turn numbers and rent equipment. Sadly, we are more known for these clubs in the industry instead of the ones trying to move us into this century.

In most clubs, if you actually get in shape walking on a treadmill by yourself a few nights a week after work it is more likely an act of God feeling sorry for your fat ass and lack of social life rather than a solid fitness program. The large majority of people left to their own devices do not understand fitness and simply push a few machines and spend an hour at a very slow pace walking on a tread and watching Oprah. You might feel a little better compared to sitting at home staring at a mind numbing television show but nothing is happening to that forty-pound bag of donuts hanging off your ass and there is definitely nothing happening that would excite a major health insurer enough to pay for you to be there.

But again, we know how to provide fitness today and many clubs are providing a complete solution although it is seldom sold that way to the members. We still do nothing more in most fitness facilities than push low intensity, self-directed activity to lose weight and manage health and don’t offer any type of real health and wellness support. Most clubs shy away from this level of sophistication because they simply don’t have the skilled personnel to provide this help and others fail the consumer because they are too cheap and can’t charge for the service.

What all this means is that while we are weak at offering total support for a healthy lifestyle at many clubs there are a rising number of smaller facilities that would qualify for an insurance boost because they can track attendance, offer weight management, and talk about lifestyle changes that negate fitness in the real world and these clubs would be an ideal blend with the insurance world.

On the other side of the debate, medical people don’t get fitness. I was recently diagnosed with a mild case of atrial fibrillation and then sent into the equivalent of medical purgatory, where I have been tested, probed, received three cardioversions, and put on medicine that was supposed to improve my health but did nothing more than make me want to lay under my desk and sleep. After almost a year of chasing rhythm my doctors have decided that maybe all that wasn’t really necessary and maybe just an aspirin a day is all I really need.

I did, however, learn things along the journey. First of all, some of the fattest people, most out of shape people I have seen work in the largest cardio specialty clinic on Cape Cod. Out of the large number of staff wandering the halls supporting at least 10 doctors only three would qualify as in shape and the rest would fall into the Wal-Mart Saturday morning Little Debbie crowd. There is also a small percentage of the doctors that are in horrible shape, which you might consider ironic considering their specialty. Obviously most live in the world of “do as I say not as I do”.

The second more frightening thing is their willingness to just prescribe drugs to everyone they meet as patients and most of these drugs are things that they casually prescribe for the rest of your life. This shouldn’t surprise me, however, since the calendars in the offices were all furnished by drug companies, the check out person was drinking coffee out of a large cup with the name of a drug on the side and many of the other charts and illustrations on most of the walls were proudly provided by drug companies who splashed their names prominently on each piece.

Lifetime drugs mean lifetime patients and while the doctors may not be thinking that way visiting their offices is sort of like going to a PGA event where the average player has about 7-8 different logos on his shirt. If you are displaying that many logos the perception is that someone must be paying you.
We discussed drugs often but we spent very little time on health and wellness. I was by far one of the youngest patients through their clinic, which is quite amazing at 56, but sadly every solution was a drug to take the rest of your life with a minimal discussion of what those drugs might do to you and the quality of your life.

My experience highlights why we will find it so difficult to build a bond between what we do and what the belief system of a doctor in our country is taught to do. Doctors don’t understand fitness, few proscribe anything beyond walking a little and cutting back on whatever is considered bad food in the press, and lifestyle is vaguely discussed because if the doctor learns too much it might get in the way of presecribing the drugs.

In our world, we want to prevent illness. In their world, they only treat symptoms and most doctors don’t seem to have the time to find out why things are going bad and how to change things further up the line that might be causing those symptoms.

Every insurance company in the country should be paying for a fitness membership, but how do you verify compliance? Every insurance company should be offering weight management help but no one can agree on what we should be eating or which diet we should be on although why we don’t at least go after soft drinks, junk food and high fructose corn syrup is beyond my limited wisdom.

We should also build a new version of BMI and reward people who maintain a lower, healthier weight instead of telling a professional athlete that according to the current system he has an index of 30 and is obese though he is as healthy as he will ever be in his life.

We should be the first thing a doctor prescribes to any patient if we can live up to that responsibility by providing a solid product and support that really works. At this point, too few of us in the industry can provide the verification that fitness as practiced in this specific facility can make a difference in someone’s life.

The good news is while not now then soon. The old dogs are dying and the new owners are rising and may they howl at the moon for the next ten years. Modern fitness works, is verifiable and there are owners who provide total support for a lifestyle change. Our time is coming but we have a little dead weight to get off our shoulders first.

The Rules of Personal Responsibilty Do Apply to You

Published on 09/10/09 11:28AM by Thomas Plummer

One of the most culturally defining shifts I have witnessed during the last 10 years or so in this industry is the trend by the professionals in our industry toward blaming others for lack of success in their business or for their personal failure.

As I have said many times, the industry as a whole is in the middle of its biggest shift ever away from many of the old practices that sustained us in the 80’s and 90’s. Many of these fundamentally flawed, and in many cases outright sleazy practices, such as high pressure sales or draw boxes, simply reached their expiration limit and don’t work anymore.

Other trends, such as the shift away from circuit equipment toward results driven functional training, are more positive and reflect an industry moving in the right direction. You may not agree with these examples or the others I have used in recent blogs, but hardly anyone will disagree that things aren’t what they use to be.

Change also leads to extreme success for some and hopeless failure for others. Change happens whether you want it to or not and right now we are in the middle of the fastest period of change since the late 70’s and early 80’s when the entire industry was beaten back to its roots by the emergence of the first franchise clubs such as Gold’s, group exercise was rising, cardio driven by electronic function appeared and the peak and slow fade of Nautilus.

But as we say, with changes come those folks who don’t adapt and this lack of adaptation to what is really happening in your world brings failure. Owners who don’t reach their expected success often don’t admit that maybe their dream business was nothing more than an abrupt nightmare that drained their money and left them crying on the curb. Something caused them to fail and that force had to be something else beyond their control.

This lack of personal responsibility is not only disgusting, but it is often that thing that prevents anyone from fixing the business. If you are the source of failure, but spend all your time blaming the market, the economy, the competitor, your spouse, your dumb ass staff (that you hired and trained), and anyone or anything else you can find, then you will never really address the issues that often can be fixed and the business saved.

An owner that blames his staff for his lack of success in the club is often the one that hires the cheapest people he can find, refuses to learn how to train and motivate, and then fires often because, “they don’t get it”. The issue is not the staff but who hired them and trained them. If the owner adapts and changes rising to meet his weakness, he will prosper. If he doesn’t he will fail, but nothing changes until he realizes they are his staff and it’s his fault they are worthless employees.

Personal responsibility assumes the owner will look within first. Most don’t because it is so much easier to blame someone else for your misery and stupidity than admitting you might not be doing a great job with your people.

But it isn’t just the owners who suffer from this personal flaw. Many companies in our industry refuse to look inward as well and many individuals depicted on the news also avoid starting within as the root of their personal evil. Eat too many big burgers and then sue the company for selling them to you might be the ultimate example of the mixture of lousy personal values and a lack of personal responsibility in your life.

Based upon the assumption that refusing to be responsible for your own life is cultural and beyond just our industry, here are some things worth mentioning:

• If you are wearing it around your fat ass or gut, you ate it. It’s not water weight. It’s not bloat. It’s not pretty. It is impossible for anything to get to your ass that didn’t go through the lips first.

• If you are not projecting a curve toward being profitable by the end of your first six months in business, your business plan doesn’t work and probably won’t. Change the plan and stop blaming the competition.

• The Y’s are a fact of life Get over it. If a Y is hurting you look at what you own. Is it a niche? Is it up-to-date? Have you even painted the pig in the last several years? You do not have a right to make money just because you opened a club. You do have the ability to run a competitive business, but most of the clubs that fail against Y’s are way beyond their competitive years and often deserve the beating.

• If major equipment companies continue to develop endless lines of fixed equipment they will fail. It is not the economy, it’s the fact that going around in circles with a giant card doesn’t work anymore and the members know it.

• Trade shows in our industry are not relevant. The speakers are seldom relevant, the format is worn out and fewer owners are going because of the expense. It’s not the economy; it’s the fact that your product is no longer relevant to the consumer. Change it or close it but deal with it.

• If you are being drained of members it’s not the club down the street that is killing you, it’s the fact that you can’t even spell customer service. Members just want you to be nice and appreciate their business but most clubs won’t even greet their members or thank them when they leave. Look at your staff and if they are dumber than a Jerry Springer audience fire them all, learn customer service and get new ones. Members leave for two reasons: you don’t appreciate their business and show this appreciation every day and they don’t get results because your training is 20 years out of date. The new guy gets them but you drove them out and it is your fault.

• I don’t care how many kids you have, how many years you have worked or how burned you are, if you own a single facility and go home at five on Monday afternoon, you deserve to have your ass kicked.

• If your spouse is making you miserable get a new spouse. Many owners I talk to spend hours blaming their spouse for their failure. If you are that miserable either get professional help and fix it or move on. If you let someone else ruin your life it is your fault and not theirs. Stop bitching about it and get on with your life.

• You are not entitled to make money because you had what you thought was a good idea. Good ideas are cheap and everyone thinks they have one but the ability to turn a good idea into money is very rare. Good ideas are the first brick in your success but it is only one brick and it is a very big house.

• Putting everything you have into your club to get started gives you the right to play but doesn’t guarantee you will win. You have the right to get your ass kicked like everyone else but you also have the right to work harder and master what it takes to make money in this business.

• If you are blessed by being successful, the rules of the universe then don’t guarantee that you will be successful forever. Many big companies in our industry have failed, and are failing, because they don’t realize that what made you successful seldom keeps you that way. The client changes but many companies don’t. What ever happened to Stairmaster, Nautilus, Body Master, Flex, Ezone and so many more? Where is Universal now? How about Icarian? Where is Living Well and International Fitness? What happened to Spa Lady? Where are all of the circuit knockoffs that were ripping the last few years? All merged, sold, closed or are lesser versions of past success. The foundational truth of the universe is that everything changes and you change or die because the client no longer wants what you have to sell. There is not a single idea in this industry that hasn’t been disputed and resurrected. Look at strength training. We are now back to the basics because the members want success and won’t settle for anything else. You change willingly by accepting the rule of change or you change unwillingly because the laws of the universe dictate that your business plan is no longer relevant in the real business world.

• Stop bitching; no one cares. If you are unhappy, keep it to yourself. Endless complaining, especially to your staff, leads nowhere except to a miserable staff. No one cares your broke. No one cares your fat, unless you have a skinny spouse. No one cares your business doesn’t work unless it is someone like me who gets paid to clean it up. Stop being a victim, get off your ass and go to work. It really is that simple.

• To quote Larry Winget, you’re broke because you want to be. You don’t need that big ass truck while you are barely making your rent. Your kids don’t need all that new kid crap when you are just getting started. You don’t need to eat out every night and you don’t need to get away this weekend. Look in the mirror if you are broke and blame that guy if you want to blame someone, because it is the guy looking back at you who is spending you into financial oblivion.

• Most stupid kids have stupid parents.

• You can’t save yourself into profitability. Cutting your expenses down to nothing and hiring children as staff gets you nowhere. Your goal is to generate revenue everyday you are in the business and if you aren’t generating enough revenue then learn how.

• Smoking might be the all time dumbest thing you can do. If you smoke and are in the fitness business then get out of the fitness business because you giving the rest of us a bad name and you are definitely not a role model for a healthy lifestyle.

• With all the books, workshops, online training and consulting help in the industry there is no reason to be an unsuccessful owner unless you are uncoachable, hardheaded or don’t understand that your lack of knowledge is why your business doesn’t work. The funny thing is that you don’t know how to fix it but you won’t let anyone else fix it either.

• If you own your own business and aren’t working about 70 hours a week then you are probably getting what you put into it.

• There is enough time to do it all. Turn off your television and play with the kids or better yet take your significant other and a good bottle of wine to your room and embarrass your kids. Turn off the television, back away from the computer, put down the crackberry and you will find a lot more hours in your day. Stop bitching about not enough time and start valuing the time you do have.

So many people make their lives harder than they need to be. Once you realize that you are the one responsible for your own life, miracles can happen. You can learn new tricks, make money, have a life and be productive but you first have to escape “poor, poor, me” trap and be able to acknowledge that you don’t always have the answer and that it isn’t someone else’s responsibility to make sure you are happy in the world.

The Numbers NEVER Lie

Published on 09/01/09 10:07AM by Thomas Plummer

Most owners make very emotional decisions, and often ones that are right for their businesses, based upon a situational management style. Situational management means you base your decision on what is in front of you at the moment, and if that something is causing you a little pain at the time, the reaction, and the decision, is often emotional rather than what is best for the business.

Effective management is always number based. If you track the right numbers, and understand what the numbers mean in relationship to your business, then you will make better decisions that will improve your business because the numbers never lie and will always point you to the decision you need to make to help the business grow.

For example, a typical owner who is not numbers driven has a poor and extremely stressful sales month. He is sitting in his office when his local newspaper sales rep drops by to check in to see if he needs to run an ad. Our owner, who is frustrated that sales are slow, listens closely as the newspaper person paints a great picture of a new section coming out in the paper next week on brides and summer weddings.
The newspaper person tells him he has to be in this section because it will be the best read special issue of the summer and if he isn’t he will miss out big time on a chance to get great exposure. Our hardworking owner, but dumb as a kettle bell, slaps together a special for a bride’s boot camp, the paper designs the ad in about an hour with no thought to the club’s brand or marketing look, and a few people drift in when the ad appears, but not nearly enough to justify the ad.

The owner had a frustrating day, makes a quick decision to solve that frustration, wastes some money in the process and still hasn’t helped the business. This is situational management at it’s worst because the decision was made through emotion and the day’s frustration and not based upon any real numbers that reflect the true financial situation of the club.

Most owners claim they track all leads, for example, and most owners lie in this case. Few owners really know the amount of qualified leads through the club over a typical 30-day period because they simply don’t have a system in place that forces the staff to report correctly, therefore, the owner always thinks he knows but seldom has a tight number. In the case of our kettle bell head, he made the decision based upon frustration and not real numbers because first of all, he doesn’t know how to gather real numbers, and secondly, he doesn’t know what to do with them if he did have them.

In his case, if he would have looked at his numbers closely he might have found something like this, which is often the case in a typical club. If he had control of his leads he would have found out he really had 80 leads through the door and not the 60 the staff reported because there is really no incentive, or punishment, for not reporting true numbers everyday.

He would have also found out that he only converts 35% of his total leads each month and not the 60% and higher his staff reports because they drop the amount of leads to look better. They aren’t trying to cheat, but they do find many reasons a person wasn’t really qualified and dropped from the potential lead list and that eventually raises their closing percentage much higher than it should be.

If kettle head was really in the game, he would track his numbers every day for his team, and for each sales person, and find out he doesn’t have a marketing problem, he has a sales training issue since the numbers would have shown him that he is really closing less than 40% and no amount of marketing money can overcome a bad sales effort.

Training his staff would be far more effective than blowing senseless money on an ad. If he really wanted to do the ad, he should have his ad company do a real ad for the paper that reflects a thought out special reflecting the club’s brand, meaning the ad perpetuates the club’s image in the market. A bride’s boot camp might have been a good idea, but it has to fit the overall marketing plan for the business and the ad has to build a recognition factor in the marketplace.

                                 The most important number you aren’t tracking

The most important number you aren’t tracking right now is your average EFT payment. Typically, a club might have a monthly rate of $39 for one person. If you break couples (two people at same address) into separate agreements, you will find that if the club sold seven memberships on a Monday, the average EFT is always going to be lower than the single rate of $39. For example (ignore the membership fees here):

Monday sales
$39 x 12
$34 x 12 (second person)
$29 x 12 (student)
$39 x 12
$29 x 12 (senior)
$39 x 12
$29 x 12 (corporate)
The average EFT payment is $34 ($238/7 = 34)

In our business, the average EFT has always been lower than the stated monthly single rate, which makes it hard to run a business over time since most owners base their success on the higher number. If you factor in all of your discounts, you’ll probably find that your number is actually lower than this example.
This lower number is what makes you so vulnerable in the market place to the lower priced competitors, because whether you want to or not, you are competing head-to-head on price. If the guy down the street is at $19 a month, and your true average is only about $29-32 in this example, you are in the same price game he is except you are losing. Your price is high enough to differentiate or high enough to protect your business.

Your discounts reflect the only way most owners know to generate more volume in their clubs. You simply drop your price for every exception to the rule. Couples get discounts. Kids get discount. Seniors get discounts. Corporate people get discounts. Your business plan is to figure out a way to give everybody a discount.

What you should be working on is how can you raise your EFT average not lower it. You can generate a higher monthly EFT average, especially if you switch your training away from session driven to monthly EFT, something we have been teaching this year in the workshops and that has proven to be a very successful plan in the clubs.

Other clubs have also added weight management programs based upon 12 weeks that is also EFT driven. Yet others have added programs such as a Parisi sports performance school that allows the club to drive more memberships by adding the children for just $15 per month per child and then upgrading the kids from that point into higher priced sports performance training or one-on-one.
Once your number goes higher than the one person price, your vulnerability in the market drops because you are now making a much higher return per sale, or in other words, you are now making more money per club client. Here is what your sales for the day should look like:

Monday sales
$39 x 12
$89 x 12 (group personal training)
$150 x 3 (weight management)
$54 x 12 (one parent with one $15 add-on for the Parisi program)
$39 x 12
$39 x 12
$39 x 12
The average EFT for this club is $449/7 = $64

Couple this with a low entry price, such as value pricing members using the 18 month tool at $29, and you have the best of all possible worlds: you can show a low entry into the club at $29, which allows a higher monthly membership conversion but you also get a higher EFT average from all members you do sign up increasing your return-per-member.

Track this number every day and also get a monthly total. Your goal is to create programs in the club that allows you to seek a higher return-per-member and still get the highest number of new members possible each month.

This is just one of the numbers you should be tracking each month or each day. The secret here is to track the right numbers and then learn how to react to what you learn from these numbers. The numbers don’t lie and keep you from making kettle bell head emotional decisions based upon situational management.
If you want more about numbers, try and get into the last few seats for the Chicago three-day advanced workshop in October. Most of the first day will focus on numbers and how to use them to make better decisions in your business.

Special note: The NFBA has Dan John’s new book, Never Let Go, in stock. This book is only for people who are fascinated with the essence of what we do in this business, and the theory about how we should train clients on the floor, which should be providing our clients with the information and leadership to get in the best shape of your life. This book might be the anti-gym book but what he discusses is what most of the real training clubs are returning to for their clients. It is not a business book but if you love training and working out it will get you to think about what we do in the club and how we train our clients in a different way.

Thom - What if you are wrong?

Published on 08/26/09 08:53AM by Thomas Plummer

This year has been totally flat out with more teaching and more workshops than we have done in years. During a brief respite, I was sitting with the famous singing insurance guy, Ken Reinig, talking about life and business. One of our constant sources of amazement is that we have been on the road for over 20 years as friends and that I have been out doing some sort of seminar somewhere for almost 30 years.

Thirty years on the road translates into thousands and thousands of students passing through your life. For example we just finished a workshop last week in Chicago with about 100 students in attendance representing about 170 clubs. If you figure a slightly smaller average and take it times the amount of work we do through the NFBA and that I have done in the past, you can guess that about 60,000 people have passed through our business not counting outside events or speaking engagement.

One of my most sacred personal beliefs derived from years on the road is something I found written better than I could have ever done it in a Hugh Macleod cartoon:

Stay ahead of the culture by creating the culture

I have worked to do this by watching the industry carefully; stripping out what doesn’t work and replacing these dated ideas with practices that better represent what any small business should be doing to make money. Small business is defined here as any single business that has less than 100 employees and does less than three million a year in revenue. Get bigger than that and the rules do change slightly.

We have been on such a mission for all these years to change the industry from sleazy business practices designed to punish those who trust us to ones that allow a young owner to make a lot of money ethically and professionally while still helping the clients who trust us with their money.

The speed of change in this industry has been painfully slow but in recent years things are picking up as the practitioners of the old methods begin to fade. Still, there is huge pressure for a new owner to question his processes, especially if faced with a competitor that is doing many things most of us think is wrong and ineffective. The following is a letter I just received questioning the system and even my sanity. Although I thankfully don’t receive letters like this one too often anymore, I respect Pete and think his inquiry is worth an in-depth answer, perhaps with more information than he really asked for when he sat to write me this email.

Thom,

I hope this email finds you well. I recently joined the NFBA and I have been enjoying the benefits of my membership.

I have been reading all of your stuff and I have put many of your ideas into practice. I have certainly benefitted from your expertise but I have to ask you a blunt question.

Thom, what if you’re wrong?

I strongly agree with your methodology regarding marketing and membership sales. That is probably because it resonates with my own values and philosophy. However, it is challenging to maintain the proper course when I see competitors doing ALL OF THE THINGS THAT YOU SAY NOT TO DO and packing the house with members.
These things include:

• “Insulting” marketing images
• Price ads
• Misleading advertising-baiting with a low price(only good for limited hours) and then switching to a higher priced membership
• Warehousing rows and rows of fixed joint equipment
• Drop Closing
• Pressure sales

It is sincerely like someone attended a Thom Plummer seminar and then did everything that you say not to do! The frustrating thing is that IT IS WORKING!!!

So the logical questions is why should I stick with the Thom Plummer way if the BS works?
Maybe people are not as sophisticated as you give them credit for?

Thom, I’m sticking with your way but I thought that this was a fair and interesting question that many of your clients and seminar participants likely also have.

Sincerely,

Pete Longo – Owner
Anytime Fitness of Asheville

P.S. I’ve copied my business partners on this. You come up quite a bit in our conversations and this is a question that we struggle with in both of our respective markets.

First of all, I can never answer this question in a way that will give a young owner an answer he will feel secure with in his business, but I will try here to at least lay a foundation for future growth by asking a few questions myself.

Why do you think everyone else makes money?

Since this business began in the modern era, usually assumed to be about 1945, someone has done something and everyone else copies that person assuming that the other guy must be making money.

In the 60’s, we all copied long-term memberships because the chains did it that way.

In the late 60’s and early 70’s, we all bought Nautilus and practiced High Intensity Training. Everyone had to have the stuff and everyone finally realized that if doesn’t work over time. Imagine today telling our members that we have equipment where one size fits everyone. We have grown and stability, total body strength, and agility are more important as fitness research progresses.

We keep trying it, or some form of circuit training, in the industry. It doesn’t work but people still buy it because they trust us to provide the answers they need to reach their goals. We sell it because it is cheap to offer in a business and questionable owners always think there is always another stupid person who will replace this one once they realize that going in a circle only works for six weeks and then fails the consumer. We copied it, and had to have it although, and while it was a break through at the time it eventually failed.

In the 80’s everyone jumped on group and priced their memberships with a group upgrade. Sounded good but didn’t work. And let’s not forget the first generation of semi-naked model ads that appeared in these years. Looked good and we all did it but how well did it really work?

In the 90’s we all copied the guy who sold memberships on a bi-weekly plan so he could rip the consumer for an extra payment a year. Sounded good but where was the ethics in this one?

This year we are all copying the enhancement fee because someone claims, usually in a bar, that he made a ton of money and got no complaints from his members. He lied but we copied it anyway.

Why do we copy?

We copy because we are always looking for the easy way. This business is hard. It is service intensive. It is capital intensive. It has staff turnover that rivals banks, which has the highest turnover in the service sector.

But the guy down the street, and he swore to me in the bar that it worked, tried this cool price sheet and it worked. In fact, he is opening more clubs now based on that damned sheet.

I even copied this in my own career. For years I believed that there had to be a magic combination of words that would lead to a higher sales percentage. Once I threw that crap away and spent time getting to know the client and what she wanted my sales did go up. I stopped copying sales people in our industry and started following Xerox sales practices. Huh, a lesson there?

Important fact

The bastards are lying. They lie in the magazines. They lie to their board of directors. They lie in the bar. They lie to their spouses. They lie because statistically they can’t be telling the truth. Everyone claims to have found the magic but if it is too easy, and too perfect, and you don’t have to do any work, then start with the assumption that the bastards are lying. Here is how real life looks in all small business, including the fitness industry. Remember here that his is true for the chains as well.

At any one time, they are fighting these numbers in their pile of clubs along with the independent guy:
20% make money and show a profit of about 15-20% pre-tax net
50% make a little; lose a little, and run average businesses that can go on for a long time
30% are too stupid to own their own businesses and never will make money burning up their money, their parent’s money and the bank’s money along the way. These people are in it for the wrong reasons and simply can’t figure it out

The guy down the street has the same issues you have. If you think running a single business is hard, imagine running 300. Your morning person didn’t show? Now take that times 300 hundred units. Your club is worn out but you don’t want to spend $500,000 to make it competitive. Take that times 300 clubs and see where you are, especially using the numbers above that reflect the true state of small businesses everywhere in the country. 

Another factor to keep in mind is that the chains are mostly in the going public business. They are not, and never will be, in the same business you are. Their goal is to show little debt, high revenues and sales and hope they can go public before they have to reinvest in their clubs. To do this you have to constantly open new clubs that are fresh and generate cash to feed the dogs that have reached the two-year plateau where they are flat.

You can as an independent, keep growing almost forever, but the chains don’t seem to work that way. I believe they get flat because they use such aggressive price driven marketing when they open that they burn down the market and do little to create new customers in their marketplaces.

The rules are the same for all of us

There are things call foundational truths that are the same for all of us. These are the basic rules of running any small business and have to be followed to make money. If you aren’t making the money you want, check your practices against this list.

• You have to develop a product that differentiates you from your competitors. For example, one of the worst things you can do in a market as an independent is to become nothing more than a shrunken version of a big chain club. Keep in mind that, “The same but smaller” is not a good business plan and also kind of sucks if your girlfriend is using this line on you comparing you to her last boyfriend

• You have to develop a marketing system that creates enough leads to feed your business. Most owners won’t budget to get leads, won’t do the guerilla stuff to drive in new business and just wait for people to come through. Marketing is so hard that most owners just refuse to play beyond sending a few cheap mailers once in a while. They never master the art of lead generation and just blame the guy down the street for draining leads

• You have to train your staff to convert these leads, at least 60% in our businesses, or your marketing is wasted. The national average for sales conversions is 38% meaning that the typical owner doesn’t have enough money for marketing to cover a lousy sales effort

• You have to create a system that allows you to collect the most money from the most members, meaning using a third-party financial service specialist

• You have to master service/retention because competitive markets force us to keep the ones we have. There is a limit to new business in a competitive market.

The tactics listed in the letter are the ones we have used for 40 years in the business. Why do we assume they still work when there have been so many failures using those tools? If this nonsense still works, why don’t we have more than four public companies in this industry? If this out of date garbage worked why do so many chains post such big losses annually? Why are the investment people trapped in club chains when VC guys have to flip in three years or they never get their money back? Why are there so many local failures, using these same mentioned tools, if running a club was as easy as using a picture of a big chested model in a skimpy outfit and running a two-for-one price special?

Most importantly, if drop closing, pressure sales, bait-and-switch tactics and sleazy marketing worked so well why is it that after over 60 years in the modern fitness era do we only have 16% of the total population in this country as members of gyms? The number is low because we have created an industry that insults the consumer and then can’t get him in shape once he is in the door.

In other words, that guy down the street looks good but if he were really tearing up the market every investment guy in the country would be funding clubs and the members would find us without marketing. Think about it, if someone really had a cure for baldness do you think you would have to advertise it on TV? If we had the cure for a bad case of fat ass, you wouldn’t have to market and beat people so badly when they do come through the door.

Fitness was, and will still be, a local affair based upon servicing clients that live three miles or so from your business. How do you stand out and how you are different are still the foundational truths of our business and these rules apply to the guy down the street too. Don’t assume he is making money and that what he is doing makes your life easier.

We have proven our system works for over 20 years and we have literally thousands of clients making money using our ideas. But what makes one client successful and the next, using the same stuff, less successful.

The key is execution. Good owners simply get more done and more effective in their businesses. They set a plan, follow it, and ignore the competition to a certain extent, especially if it interferes with their plan.
Good owners are driven business people first and fitness people second because they are in it to make money while providing a needed and ethical product. Most owners who are not as efficient as they hope can’t sell memberships, don’t practice modern training systems, won’t spend money on marketing and won’t study best practices in the industry, meaning the ones that do work with the numbers to back up the bull.

We begged an owner who was failing last year to get out and at least do door hangers near the club. She refused saying that there was more important things, like paperwork, to do in the business. She rode it down because she felt that since she opened her business she had a right to make money. Good owners simply make business happen compared to bad owners who wait for business to come to them. If you don’t know the difference then you are not in the 20% who is making real money in your business.
What all this means is that you can only master and run your business. You are responsible for your own success and failure but the grass is always greener in the next yard and it is so tempting to seek the fast way to success.

There was a famous columnist in San Francisco named Herb Caen. When I lived there a local radio station ran a billboard of one of the most beautiful women in the world. Herb received over 4500 letters from readers wanting him to research her. Who was she? Where did she live? Why was she not more famous? He ran about 30 of the letters in his column selecting the best lines from a lot of letters. His answer was simple: Your fantasy is someone else’s pain in the ass.

In the end, though, it doesn’t really matter because Pete, it’s your business and you should try all those things to see if they work for you. There are no absolutes and there are many ways to make money in the world beyond what I teach. Experiment and see if these things will draw the way you think they will for your business but always return to the foundational truths because they are the only things that will determine your success in this business.

Random Thoughts ...

Published on 08/17/09 05:38PM by Thomas Plummer

This is sort of a random blog based upon a number of calls and contacts that happened this week. Todd Durkin, one of the rising stars in the industry in training theory, sports performance and the actual business of training, ask me to do a phone in with his mentorship master mind group this week (Todddurkin.com).

One of Todd’s questions, and one that I also received from several other callers this week, is where are we and where are going as an industry? Most of the calls revolve on what is new in the industry? What is coming next? Where will we be in the next five years?

If I knew the answer to this exactly I would charge a lot more for this blog but I do think there are some interesting trends underway that will dramatically change how we do business in the coming decade. Here are some thoughts in no particular order:

• Circuits and single joint fixed plane equipment are dead: The consumer is bored. The equipment doesn’t work. Isolation works against an active lifestyle. The consumer has been there and done that is ready for more than rows of equipment and no help

• The industry will return to what works, which is total body authentic fitness, a term I borrowed from Anthony Diluglio (artofstrength.com), the guy who has led this trend for a number of years. Using 50 foot ropes, kettle bells, medicine balls, flipping tires and pulling sleds is exciting for the consumer, allows trainers to become coaches rather than rep counters with clipboards, and cuts the cost of equipping a new facility

• The 3000-7500 square foot club will be the club of the future. These clubs can be situated in almost any neighborhood, are cost efficient to open, are based upon what works (at least they should be) and can turn out a lot of profit with a relatively low risk. Every guy at home watching the P90X infomercial and Googling Crossfit wants to do cool stuff and most mainstream commercial clubs simply don’t offer the option. The consumer will keep looking until he finds someone who can help him and that person works in this new club model

• Innovation in training always starts at athlete end and works slowly back to the club. Here is the sequence: athletes seek performance and embrace what works and discard what doesn’t; trainers working with successful athletes share this information with the training population through educational events, blogs and dvds; these trainers incorporate these new ideas into their individual businesses and clients at the local level; trainers in mainstream fitness businesses eventually get the information and bring it into the commercial world, usually several years after the athletes grasp the newer training methods; the general population, the ones who follow the athletes and who read the fitness magazines, pressure the commercial clubs to make change. Most commercial clubs are at least five years behind what is happening in the fitness magazines and with current training thought. Innovation comes from the bottom up, which is why so many clubs still tout the benefits of going in circles with a workout card

• The large chain clubs will continue to decline because their approach to fitness is so dated. It won’t be tomorrow, but it will be obvious over the next several years as the consumer seeks fitness at a more effective level, something chain clubs full of dated equipment and cheap trainers simply can’t provide. These ships are too big to turn and most will fight the change believing that just adding more lines of equipment is the answer. The more progressive chain clubs will eventually be smart enough to start adding large amounts of strong functional equipment, such as Human Sport from Star Trac replacing the old single joint fixed plane equipment over time

• Cardio still rules in the commercial club setting and that won’t change much. Entertainment systems still won’t add much and the consumer would always pick more working pieces of cardio where you don’t have to wait over less cardio loaded with small viewing screens

• Somewhere, at sometime, a commercial owner will read Dan John’s new book, Never Let Go, and realize that effective fitness is simply total body conditioning done the retro way by picking stuff up off the floor and putting it over your head. This owner will then look at his 80 pieces of equipment and realize that he could have cut that order in half by buying just functional equipment and a bunch of kettle bells, ropes and suspension trainers. This guys next gym will be half the size and much more effective

• The low price/value guys will also feel the trend back to vintage/retro fitness because their entire business plan is based upon just equipment, light dumb bells and no support. You still have to get results to stay involved and the consumer, who is now at the most sophisticated level of training knowledge in our history, will quickly reject what doesn’t work even if it is cheap.

• Marketing will also change, but not as fast as you would like it too. Electronic marketing will someday rule the club world but not for at least another five years. As of now, your clients still find you mostly through referrals, convenience and traditional awareness marketing. The reason electronic marketing doesn’t work now as well as it should is the fact that there is a total disconnect between the cutting edge technology of electronic marketing and the extremely dated clubs trying to attract a younger, more sophisticated consumer. In other words, high tech marketing attracts a person who just read Outdoor magazine or Men’s Health and wants a fully functional workout to get him ready for ski season. He gets hit with an electronic message through a social network site, visits the gym and finds out it is 20 years out of date and couldn’t get his mother ready for ski season. But, by the mercy of the universe, the trainers all have clipboards and can count to 12. The club has to equal the expectations and until that happens we will still be minor players in the electronic marketing arena

• Clubs will have to be smaller. There will still be large clubs built in certain markets, meaning those over 30,000 square feet, but you will see fewer and fewer as the cost outweighs the possible return on investment. If owners embrace functional/effective fitness, then the clubs will naturally shrink because what is in the club will take up for less space and service far more members. Look for clubs in the 15,000 square foot range doing the work of what use to take 25,000

• The club business will get hot in the next five years and you will make a lot of money if you are ready. The consumer has moved from fitness to lose ten pounds for a wedding to a lifetime journey to feel and look good. The clubs are lagging behind, however, in the fact that the consumer wants leadership and coaching. Clubs that figure out semiprivate group training, personal group training and updated group exercise and other revenue generating machines that service large numbers of clients at the same time will be the ones to most benefit in the coming years

• You will have to understand weight management in the next five years. Our country has 63 percent of its citizens either overweight or obese. Where are these people going to go for help and why shouldn’t we be providing the answers they need?

• Traditional marketing will have to change. How many of you believe that a club that offers 50 percent off a membership fee to get started is believable. Percentage discounts must be the most mistrusted of all advertising gimmicks and most clubs running these fail with them. Due to all the competition, you must practice this motto: To know me is to love me. This means that fitness is complicated and you have to get someone into your business at a low risk and let him or her experience your business for a few weeks before he or she can commit. To know me is to love me and spend time in my business and you will buy at some point. Embrace the trial/30 days for $19 or some version and get people into your culture.

These are just a few random thoughts we might continue at some time in the future. Project your business into the future. Are you ready for the changing market and changing consumer? Are you different than your competitors, not just self-deluded as better? Are you ready to own your marketplace through ongoing marketing each week?

Simple Issues that Drive the Fitness Business

Published on 08/05/09 03:44PM by Thomas Plummer

Sometimes the clients bring me back to the simple issues that help drive success in a fitness business.

This week I was talking to a guy who is trying to buy an existing fitness business. The club he wants is in a southern state and has been in business for a number of years.

The client does not have fitness business experience but is an experienced businessperson who also has some real estate. He surprised me with his thought process in that he had already figured out many of the cash flow questions, understood debt, calculated the free cash he would have after the current owner stopped running everything through the business, including payments for the dog house in his yard, and in general was able to analyze the business that you can only do when you have real life business experience.

The big thing he missed, however, was the receivable base. The current owner is collecting his own receivables, which for most owners is a foolish choice. Collecting your own memberships means that you now have to create a separate business within your business to manage, but most fitness owners don’t have the skill set to manage a full blown and effective payment servicing /collection department.

There is also the issue of waste when you collect your own memberships. Most in-house collection situations usually cream their own memberships, which means you easily collect the money from the good people but take a higher level of loss from people that you should have collected from over time.

There are three classes of clients that affect how much you really get from the memberships you sell. I think they group like this: 

• The top 60 percent, who pay no matter what you do because they are good, honest people, who keep their word and pay their bills on time. These are the ones that are easy to collect and are also the ones where low-end third party financial service companies make their money. These are easy and if you don’t want to work hard you collect these memberships first and then send everything else back to the club to handle

• The next 30 percent are the members who have to be taught to pay. This group can go either way, test you when they can, and will pay you less often if they can get away with it. This is also where a high-end third-party financial service company, such as ASF out of Denver, the largest company of its kind in the world, earns it money.

The members in this category can be taught to be good payers if they are approached aggressively early if they have issues. In other words, some young knucklehead doesn’t pay on time, gets called immediately and he has now learned that he can’t get away with that. This is the group where a good service company can make your club but it is also the group where the do-it-yourself guys at the club level get beaten so badly because they aren’t aggressive enough or timely enough to get the job done. Collecting from this group take advanced systems and one old lady sitting in an office pounding your members just can’t get it done.

• The bottom 10 percent is the chronic never pays and need to be beaten just for principle. If you use 12-month contracts, coupled with a third-party service company that is good, you can keep these loses in this category to 10 percent or less of your total outstanding, or less than a point per month of loss. This is a good number you can live with, but keep in mind that if you are driven to do it yourself, this number will be higher because people from the category above will drift down because they have never been taught to be good payers from the start. Remember, it’s like getting a dog. If you teach the dog right from the beginning you end up with a good, well-trained member of the family. Wait too long and it is hard to correct mistakes, such as eating your shoes or peeing on your carpet. Start early and train correctly and you will get more money from the same amount of sales.

Collecting your own memberships also raises the question at time of sale of the club as to how good is this paper and how much will I collect if I take over the business? I have only seen a hand full of embezzlements over the years in this business but every single one was from a person who collected the club’s membership payments. Collecting a large number of payments and running a large amount of cash through the business daily is just an invitation to take the money and run, especially when you are totally dependent on just one person collecting your money rather than a specialist that has many safeguards in place.

We usually coach new owners to expect at least 20 percent less per month than they think they will receive when they take over. Most existing owners just turn out to be wrong in what they think they are collecting from their membership and the new owner will be the one to take the beating. Another factor is most sellers sabotage the new owner by cashing out a lot of members on the way out the door to increase portable cash, which will drop the monthly return from the receivable base.

Another interesting question from the new buyer was, “How can you help me?”
This sort of goes back to the point in the last blog of using a business coach, but the issue here is that most owners don’t know what they don’t know.

I was sitting in a doctor’s exam room recently for a routine visit and the doctor asked me what I do for a living. I told him that I am a business consultant. He kind of laughed and asked me what that really meant. I answered that I tell people things they don’t want to hear about the businesses they own.

His response was, “Well, what do you see here?” It was just too easy. First of all, the exam rooms are painted a yucky yellow including all the walls and even the counters and cabinets. This makes the room feel really claustrophobic and I guessed that his older patients would fee really uncomfortable in this room.

I also pointed out the open wastebasket (low-end and unprofessional and actually disgusting too) and how he could fix his entry area to service more people, dress his staff better to give the image of professionals, and that his customer service sucked since no one on his staff of 50 or so ever acknowledged you as you passed room-to-room. It’s what I have done for a living for 30 years and sometimes you just can’t turn it off.

Good coaches find the flaws in your business but most owners don’t want to really hear it. It’s sort of answering the questions, “Does this dress make my butt look fat?” If you are married, and want to stay that way, you always answer, “No, I really love that color honey.” If you are a consultant by trade, however, you answer, “No, that dress doesn’t make your butt look fat, it’s your fat butt that makes your butt look fat.” This is also probably why most consultants are single and drink a lot alone.

Coaches find the flaws and show you how to fix them appropriately for your business, location, time of your career and competition. There is never one answer that can apply to every club. There are rules to start with, many of which I might have wrote, but even these might have to be broken depending on the situation. There are exceptions, but always remember that good business is good business no matter where you live and work.

Next stop-Chicago: Come see us this month in Chicago (the regular NFBA workshop) or in Nashville next month. Get you butts moving and be aggressive in the fall. Now is the time to make some money.

Keep the Business Real Simple

Published on 07/29/09 01:59PM by Thomas Plummer

“You know Thom, those are good ideas in the workshops but you see, my club is a little different and I don’t know if what you teach will work for me.”

The fundamentals you need to make money in this business are just about the same for any size facility you might own. If you own a 100,000 square foot club, or a 1500 square foot training facility, how money is made doesn’t really differ that much. You obviously have more staff at the larger club, and more risk, but the fundamental business skills you need to make money are the same.

The reality is that most owners are comfortable doing what they are doing, even though what they are doing isn’t often making them the money they want. A little money, however, tied with no change, is often preferable to change, which is often painful for a few months no matter how much money you might make later.

We recently had a workshop in Hartford, CT, and after two full days a trainer dude who owned his own club came up and said as he left, “I just don’t think this information is for me. You see, I have all these one-on-one training clients and I don’t think they will change.”

I asked him where he had been the last two days. Everything we talked about was centered on information gathered from training clubs, usually the source of most new ideas in the fitness industry for working people out, and the information ranged from adding semi-private workouts and group personal coaching to marketing. We even discussed the need to leave existing clients alone and just focus on news business forward.

After I asked him a few more questions we came upon the real answer: he was happy doing what he was doing and all these changes were just too much for him. He wasn’t the brightest dumb bell on the rack but we sat and deconstructed the entire workshop into small, easily digested segments he could use now, in his business. These are the foundational truths for our industry and if all else is failing in your business, start here to rebuild or grow.

A few foundational truths

You have to get control of your money first:

• Set a price that reflects your current club and competition and then be willing to reset it every two years

• Use a third-party financial service company to secure your revenue stream from your member payments and so you can focus on revenue generation

• Use a 12-month membership as the foundation of your memberships, although you may use other tools to enhance your club

• You must learn to drive your average EFT payment per membership higher than what you charge for a single member per month. For example, if you charge $49 per month per member, you must learn to get a higher average payment than $49. You can only do this if you learn to base your training revenue on monthly EFT and not sessions. This might be the biggest thing we are teaching this year
You have to market every week

• You have to have something going out every week, every month, every year until you die or someone takes the club away from you. Fire your staff, sell your car, move in with your mother but never stop marketing

• Use a paid trial as your base driver, such as 30 days for $19 (up or down depending on the market). We do this to take leads away from the competitor and to keep the club full of leads

• Use a risk free trial every three or four months as an alternative to the paid trial. Try 21 days risk free if you are using the 30 days for $19

• Master electronic marketing. You must have a decent web page that captures leads that you can use, you must have Facebook and you must Twitter, at least this week. Look up Casey Conrad and her new series on adding electronic mastery to your club’s marketing plan. She has been around a long time and she is one of the most ethical people in the business

You have to get control of your leads

Very few clubs truly know how many qualified leads they have coming through the door each month. If you can’t get control of the leads, you will never know how well your marketing is working.

• Every phone call and walk-in, qualified or not, must have a matching inquiry sheet at the end of the workday. If your staff isn’t comfortable doing this, get a new staff because the ones you have are killing you

You have to learn to sell

• You need a dedicated salesperson, no matter how small your club is you training fools out there, that has the sole responsibility for the acquisition of new business each month

• You have to do sales training daily for at least 30 minutes with everyone who sells memberships. Too much? Sell your club and deliver pizzas because you will never make the money you want from this business

• Learn to convert at least 60 percent of all qualified leads over a 30-day period. You also need to track first visit closes as well. For example, if you get 100 qualified leads into the club, you should convert at least 60 to some type of membership and of the 60, 30 percent, or about 18, were first visit sales.

Train on service every day with every staff person

Service can be taught, but it has to be taught daily person-by-person in the club.

• Teach your people to greet every person through the door with a strong welcome statement, such as “We’re having a great day at the Workout Company.” If your staff can’t say that, or are embarrassed, fire them and reload

• Learn names. Nothing is sweeter than someone recognizing you by name at the club

• Thank every member every time they leave the club. “Thank you for stopping by today, we appreciate your business.” It just isn’t that hard to deliver good service and good service in a mediocre club will beat bad service in a new club everyday

• Clean the club more than you think. There isn’t a club in America as clean as you think it is. Clean it everyday; let the members see you cleaning, and remember that it still isn’t enough. You lose more members because your club is dirty than you do through any other reason

If none of this makes sense then come to a workshop. Our focus is to always return to good business skills. Many owners just get involved doing other things in the business and you have so take time to find your way back to the foundational things that will allow you to make the most money.

This year we are also highlighting the changes in training in the clubs, perhaps the biggest changes I have seen in all the years I have been doing this.

Remember that making money has to be made simple but most owners fight change rather than take risk. Most feel that what they are doing got them this far then why take any risk, even though a lot more money could be made.

Most of what we do at the NFBA involves getting owners to simplify and learn the foundational truths of the business. You would be surprised at how many owners get frustrated with their business and revenue, yet haven’t marketed in the last three months.

Consider business coaching. We do a lot of it and you may need it to help you find your fundamental truths in our business. Call the office and talk to someone as to what it takes to work with a coach to keep you on track and growing and who can help you fight through the fear of change. Call us at 800-726-3506. We can and will help your grow your business.

What I am reading this week: It’s a weird week in the book nook. This week I am reading Dave Draper’s, Brother Iron Sister Steel, and Misquoting Jesus by Bart Ehrman. Draper’s is a must read for anyone who plans to make the fitness business your business for life and if you actually think outside the gym, try the other book for a unique look at how the bible came to be.

Much of What We Accept is Worthless

Published on 07/20/09 05:05PM by Thomas Plummer

Much of what we accept as business experience in this industry is worthless.

Many owners pride themselves on longevity in this business, and if you have survived over eight years doing this for a living, I congratulate you on a rare feat of magic in an otherwise unforgiving business. But often, this shield of experience is what keeps you from performing at a higher level in your business.

Experience is usually equated with survival. I learn to cut corners, manage expenses, do a little marketing and survive a few attempts at my market from other, persistent, but equally business-sense deprived competitors and; therefore, get to stay in business another year. I haven’t learned to make money, but I have, through experience, learned to just do what it takes to stay in business longer than the other people who have tried this business in my market.

Although I have said it before, it is worth saying often: a typical owner who has been in business for 20 years usually has one year of real experience and 19 years of repeating the same mistakes over and over again. These owners surface often at conventions standing in the isles but never in a seminar or during phone calls to get them into a workshop. The standard response is always, “Why do I need a workshop? I have 20 years of experience and I don’t think there is anything out there worth knowing or anything new someone can teach me.”

This guy is right, there isn’t much anyone can teach him. And I am sure his wife would agree as well that he never changes, and all the talented employees that have left this closed minded idiot over the years because their ideas were never heard also would probably add an amen brother too. Locked, rigid minds isolate you from almost everyone who want to help you mover forward in your life and your business.
You can also see that change eludes this owner by just looking at his business. Nothing has changed in years including the colors. The equipment is dated and hasn’t been moved in the club since Carter was president, the walls are white with the traditional stripe around the top, and group rooms are clusters and piles of never used crap in the corners and the club has a total feeling of stepping back into the 1990s.

This is also the first person to complain about how unfair it is that a nonprofit is coming to his town or that a low priced competitor is hurting his business. This owner deserves to get his ass kicked because he has failed to keep his business viable in the marketplace. Why? Because this is the way he made money 15 years ago and he isn’t going to change because he doesn’t know any other way to function.

Experience as we define it in the industry is what actually insures that you will perform at a lower level in your club. Experience should not be defined by longevity but by adaptability. Personal growth, change in your business and adaptation to trends and member desires are all more important than still trying to force ideas that are 15 or more years out of date.

Change happens, with or without you and failing to adapt and keep moving forward becomes your limiter, not just in your business but in your life too.

We recently interviewed a guy in his late 50s for a phone job. The NFBA is a tough business in that it requires a certain skill and persistence to penetrate the screens most owners have set in their businesses. Our goal is to talk to someone who can make a decision about attending a workshop and it is difficult getting an owner to take a few minutes to sit and chat about something she may never of heard about previously.

The person we interviewed stated quickly that he had experience on the phone but he wasn’t really good with a computer. Much of what the NFBA does is based upon a database, emails, finding websites, Facebook and every other electronic way imaginable to get information to people who we hope come to see us. This guy had failed to change, failed to keep up with the real world, or in other words, he failed to adapt to the way the world is now, preferring to remain stuck somewhere in his past experience. He had work experience; it just wasn’t enough without the other skills.

Way too many owners in this industry are like the guy we interviewed. Their skill development simply stopped at some point in history and they have failed to adapt, grow and change to the way things are now in the market.

For example, drop closing worked many years ago. Drop closing, for you precious few not attuned to this part of our industry history, means that you show the potential member a price during his first visit and then you knock-off a $100 if he goes today. “Normally our money due today for joining is $150, but if you’re willing to get started today, and I know you’re serious or you wouldn’t have stopped by, I will knock off $100 and you can get started for just $50, but you have to get going today because this won’t be here tomorrow.”

This is insulting. The potential member isn’t as dumb as you hope. This person has so much more sales exposure than the kids we pitched with this nonsense 20 years ago. All this, and yet we can’t get owners to stop drop closing in their business because that’s how they made all their big sales 15 years ago working at a nasty chain club.

The most successful owners in today’s market are the ones constantly willing to move their business ahead. To quote Alwyn Cosgrove channeling Bruce Lee, only keep what works and discard the rest.
Business changes. Life changes, and what made you successful even a few years ago will not keep you successful in this business. We are in a lot of ways like modern medicine. Research brings forth a new concept that save lives almost daily. We are in that same fast forward mode in this industry. Change is happening but most owners hide behind the “I have experience and know how this business works” mode rather than admitting that what they do doesn’t always work anymore and that they haven’t had a new idea since they were 19 and discovered pot in college, and the ideas they generated then after four bongs and two dozen chocolate chip cookies are maybe not the ones that were so good anyway.

What I am reading: Dan John’s book, Never Let Go, for a second go around. I read it on the plane for the first time a few weeks ago and picked it up again when I got home and found myself reading the entire thing again. This of course, led me to Dave Draper’s book, Brother Iron, Sister Steel, which is a great read about the start of the modern era in fitness. Both books lend strong but different perspectives to what we do in today’s clubs and are worth the read. Experience is also the gathering of different ideas and these books are a must read if you own any type of fitness business.

Retention in the Fitness Industry ...

Published on 07/07/09 03:11PM by Thomas Plummer

Retention in the fitness industry is like your Uncle Bob, the one who comes to the family gatherings with a bottle of Canadian Club, terrifies the little kids with his bad breath, falls asleep in the living room, farts loudly whenever he can then giggles, and generally embarrasses the entire family. Like retention, you know he is there but no one wants to deal with him since he only surfaces once a year or so.

Most owners define the word “retention” as, “What ever happened to that guy, you know, he joined in January and was always on treadmill three at about 4:00?” Retention is not proactive to most us but rather reactive in that we assess the damage but fail to do anything to prevent it. Your jeans are too tight, you’re just getting fatter, but it is easier to eat that next donut than it is to adjust your life. You live with the fat rolling over the top of your pants just like most owners live with large membership losses.

First of all, let’s start with what is real when it comes to retention. Owners who claim they renew, or retain, 85 percent of their members on a year-to-year basis, always amaze me because I know they are lying but they feel the need to exaggerate their numbers for personal gain. If you want to be the president of some organization, and you’re a local club owner reaching for national fame, then you stretch the facts to build the case that you are indeed legendary at retention.

Retention is what happens after you adjust for losses. For example, let’s look at a club who signs up a 100 new members in a month, uses 12-month memberships and a strong, third party financial service company. Losses for 12-month memberships as a tool are about one percent per month (12% annual) and most clubs will lose about one percent per month from members who simply move away or have permanent physical issues (12% annual). The total for these two categories is 24 percent losses as reflected by the .76 collection rate below. Every club should target 60 percent of possible renewals as its goal:

(100 x .76) x .60 = 45.6

This represents a good club with low losses, a strong collection effort and a higher than industry average renewal rate and it still only retains about 46 members out of every 100 new at the end of 12 months. This single fact is what makes the fitness industry so difficult but it is our own fault. We have built failure into almost everything we do, from our training systems to the quality and dumbass level of our front counter kids.

A few things any fitness fool can do to help increase retention over time

Here are a few things any person crazy enough to own a fitness business can do now, cheaply, to increase retention over the next 12 months. Remember, everyone you save is one you don’t have to pay a lot more to buy new in the market.

1. Thank every member every time they buy something or when they leave the club: Yes, I have mentioned this before and it still makes me angry. I support your business through my membership and through purchases made on site. Say thank you each time I leave. Be grateful. Be kind. And whatever you do, don’t tell me to have a nice day.

2. Contact me once a week: Email me some motivating articles to inspire me. Take me to You Tube or Facebook for something to get me excited about fitness when I am sitting at my desk thinking about a beer rather than a workout. Let me know I belong to something bigger and that the club cares that I come and sends me stuff that makes me want to stay involved.

3. Twitter me: If I work with a trainer or nutrition person, send me something a few times a week to keep me involved with that department and person. Short sweet and learn to tweet.

4. Start a boot camp if you can: Going to a gym sucks when it is nice out. Offer a boot camp outside every Tuesday and Friday morning in a park near the club. Let members go for free. Charge guests $10 to do it for one workout. Advertise to secondary ad sources, such as church flyers or the shoppers. Remember that a guest paying a daily fee is nothing more than someone willing to pay to get pitched by my sales force. Keep the camp going year round. Use props and have adventures in fitness. Do anything to keep me from getting bored. Think of it as fitness without borders.

5. Every year validate the sale: I paid you for a year so send me a gift. If you are using open end, auto renewals, send me something I can use in the club, such as a smoothie card or usage package for something like tanning. If you are using closed ended 12-month renewals, which you should be using, then give a cool messenger bag or other gift that lets me know that my business was noticed and appreciated for the year.

6. When I sign up at least give me a stinking tee shirt: I drove past four gyms to get to yours. When I choose you give me something that proves I made the right choice and that you appreciate my business. If you can, give me a tee shirt, workout bag, water bottles and other goodies. My decision to stay at the end of my membership might be determined by how much you appreciate my business in the beginning.

7. If you want my guests, pay me: We will pay $5000 per month in the hopes that we get guests through the door. Buy 50 IPods instead and give one to everyone who brings a new member in that month. Don’t give me a stupid ball cap to me to buy my guests. You want my friends, pay me; which again proves you love me and appreciate my support of your business.

8. If I last three years, make me even more special: It is an old idea, but revisit the VIP card program. Give every person who finishes three years with you a black VIP card that allows me to get anything in the club for 10 percent off and also allows me to bring in a guest who can sign up with no membership fee. I paid you for three years. Doesn’t that merit some recognition in your business?

9. Clean and paint your place: Your club should be the best part of my day but most likely spend more time there than you do at home so you stop seeing what the club has become. Clean it every day and clean it while I am in the club, expect for the vacuum. Bring in a big crew annually and take it back to the way it was the day you opened it. Paint something every month to give me the impression that you reinvesting and that you are into details. Don’t assume new equipment buys me off as service, as most lousy owners do. New programs are more important and that fact that what you do reflects real world fitness and not fitness that is 10 years out of date and based upon going around in circles on fixed equipment.

10. Answer the phone live and with three rings: Nothing, and I mean nothing, pisses off the customers off more, and especially the members at the club, then calling for help and getting dumped into an automated hell by electronics. No matter how small, or how big, your business is pick up the phone and answer live and within three rings. We have people paying us so treat them with respect and answer the phone with courtesy and energy.

This list could go on and on but the foundational element is the same. They pay so we should show them respect. Visit other clubs in your area where you aren’t emotionally attached and hang near the front as you fake your workout. How many of their members walk by the counter without getting acknowledged as they enter and how many get ignored as they leave? The difference between your business and theirs is how you treat the people who are paying and the difference between high retention rates and lousy retention stems upon those same actions.

The Essence of Fitness

Published on 06/30/09 08:12AM by Thomas Plummer

The essence of fitness is that somewhere, somehow, someone still has to get in shape.

We forget this in the current fitness business model. We package the clubs well, rent vast fields of equipment to the client economically, decorate and showcase our products and work on our ability to generate new sales, but we have drifted from the essence of what our business is all about, and because of this drift from our roots the member has suffered and our businesses have lost money and direction.

There is heavy buzz in the industry about the word, “retention.” Simply defined, we discuss how to attract new members into our system and then keep them staying and paying longer than we now average. Most clubs, despite huge claims, only keep a new person actively working out in the clubs for about 7-9 months on average. Members trust us with their most precious asset, their fitness and health, and then leave after a short period of time.

Mostly we blame them. They aren’t motivated, didn’t make the commitment, weren’t ever really serious or just didn’t get “it”, with it meaning the culture of we know how to get you into shape and how dare you not listen to us.

Maybe there is another reason they fail. Maybe it’s us. Maybe we don’t really know how to get people in shape.

Laree Draper, the business mind behind the legend Dave Draper, perhaps the classiest body builder ever to stand in posing trunks, just sent me a book to review: Never Let Go, by Dan John. The book is a collection of articles and blogs by Dan edited in a well written and motivational read.

The book wanders from Dan’s training philosophy, honed after decades of working with thousands of students and athletes, personal philosophy and a unique look at what fitness really is and how to achieve it. His personal story makes it a good read and his trials and tribulations make it funny as well.

My take, however, is that the book also points out why and how we fail the average consumer who comes to our clubs. Dan talks about pure fitness, meaning doing things that actually get people into shape, as opposed to main stream fitness where everything is pretty and convenient and nothing really works for long. In other words, because of how we train members we actually build failure into the workout because after about 6-8 weeks the person doesn’t progress, gets frustrated and eventually leaves.

Here is Dan’s list of tips for athletes. Read and figure out how we so radically differ what actually getting this done in most clubs:

1. Use whole body lifts: rarely isolate a muscle
2. Constantly strive to add weight to the bar, and move it faster
3. The best anabolic is water
4. Did you eat breakfast? It not, don’t ask me anything about nutrition
5. If you smoke or don’t wear seatbelts, please don’t tell me the quick lifts are dangerous
6. Go heavy, go hard
7. Keep it simple. Less is more
8. You have to put the bar over your head
9. Put the bar on the floor and pick it up a bunch of different ways
10. Know and love the roots of your sport

This is from one of the older articles in the book and he expands on these and other core ideas as the book progresses.

Read these carefully and you find out that most fitness members don’t do much of these during their average workout. Most don’t do anything whole-body but instead rely on machines to isolate everything. Most don’t add weight unless forced and then not enough to keep the challenge. Most are fat because of the 10 sports and soft drinks they had that day. Few understand free weights and use them only as extreme isolation tools and very few would know Bill Pearl, Dave Draper, Bruce Jenner or any other person who helped moved training ahead over the years if they worked out next to them in a club.

We have made fitness accessible, convenient as to number of clubs, affordable and attractive. We haven’t, however, done much to make it more effective. To paraphrase another Dan John quote, can you imagine any real athlete coming to the gym, jumping on a treadmill for an hour and plugging in Brittany Spears? If you don’t get into shape, you leave and we structure entire fitness businesses around the premise that working out without sweating is your goal for the membership.

People always ask about what the next big thing is going to be in fitness. I think one of the next big mind shifts is when we stop training a very limited number of our members like spoiled clients (one-on-one fitness) and start training bigger numbers like athletes at a lower cost and with better results. Group personal training, extended boot camp cultures, a return to full body workouts three times a week and the emphasis of getting people up and moving is all returning to our business plans.

The sports world has already returned to simple fitness, and many of the teams, such as the Tennessee Titans, have returned to fundamental fitness in the form of even kettle bells, ropes and logs (go to artofstrength.com). Most change starts with athletes, then trainers and eventually winds back to the mainstream fitness world. If we embrace fitness at the base level again, and perhaps return to some of Dan’s insight from above, we can get members results and they will stay with us longer and pay us longer.

My thanks to Dan John and Dave Draper who have made the fitness world a better place because of who they are and what they share.

To order the book go to Amazon.com and it is about $16.

Over Reaction is NOT a Good Business Plan

Published on 06/22/09 03:09PM by Thomas Plummer

It has been one of those summers. Each year I swear I will travel less but I always seem to end up doing even more. This week I just finished a few days with a Gold’s Gym Alliance Group comprised of a few guys who have been successful for over twenty years and a handful of newer guys just making their way in the business.

One of the key points worth mentioning that emerged from the group was the constant urge for experienced owners to overreact to market conditions. Over reactive is when you respond to competition, or to market factors, too aggressively instead of applying the appropriate response that would protect your business. Too much too soon can often weaken the business instead of providing the stability and protection you are seeking.

There is an old adage that is very important to consider here: your perceived fears are usually worse than what actually happens. Put another way, the more you think about how bad it could be seldom matches the reality because your mind almost always comes up with the worse case scenario. An owner especially magnifies the possible horror when he starts using absolutes, such as, “That new guy will take all of my business,” or if I rewrite my memberships and adjust the price I will lose money because everyone will want to do that.”

Someone usually overreacts to a situation when he or she is running the business in a totally reactive mode instead of driving the business to dominate the market. For example, if I constantly react to a competitor I will make mistakes. Reacting to his plan, rather than trying to run my own business dictated by running my own business plan, forces me to make short-term reactive decisions based upon something that is happening today, rather than trying to set my business in motion over time to weather anything that might come my way.

One of the owners in the meeting is a very sophisticated businessperson in other businesses but runs his club in a totally reactive mode. When he encountered his first batch of low price competitors, he immediately lowered his price to meet theirs. At first this seems to make sense, but in reality you have now changed your business plan to match theirs, and in this particular case, the owner’s facility and type of club didn’t warrant the over reaction to the market.

Keep in mind that price is the last thing you should adjust but it’s usually the first for owners who don’t have a tight plan in place to grow the business. If all you do is worry about maintaining your business, then you make mistakes because every decision is based upon doing what you cannot to lose business. If you focus on growth as the core of your plan, you make decisions based upon constantly trying to increase market share and keep competitors locked into their own niches and out of yours.

If you are running a proactive business, you may still get rocked temporarily by a new competitor but the damage is usually less significant and, most importantly, you have time to react without panic.

Proactive business management is defined as building a plan and then driving revenue and the business every single day based upon that plan. For example, if you have a four million dollar investment in your club, you should be running that business very aggressively. Aggressively means you are marketing every week, you continually work to develop the club’s money zones (see previous blogs), you adjust the prices as needed every two years, you train and develop staff daily and in other words, you run your business as a business driving the market rather than reacting to others in the market.

Most owners don’t do any of these things and then seemed shocked that they get their ass kicked by a new player in their game. Staffing may be the biggest indicator. Most owners pay too little for desk staff attracting idiots, try to use too many part timers instead of trying to hired a few skilled full time people, and then only train their team a few hours a month. Let’s see, I hire stupid kids, pay them little, offer them part time so they don’t have any real loyalty to my business and then don’t train them. Then let’s bitch a lot about how unfair it is when a low price guy moves in and takes my members.

Proactive assumes there is always a competitor coming and that he will be good. Preparing your staff to retain your members is a fundamental truth of business. Hiring idiots and not training them is what you do when you want your members to leave you. Miss your spouse’s birthday a few times and blow off your anniversary to go out with your friends and you’ll see first hand what happens when you don’t work on retention in a relationship, which is all a club really is if your price is $39 a month or higher. Why should a member stay when you offer weak service and rent the same brand of treadmill for $30 more a month than the guy down the street?

You can’t compete on fields of equipment based upon price. You can run a proactive business and dominate a market based upon differentiation, constant service, and a better club, but it is harder, which is probably why most owners prefer to bitch about how easy it was in the early days and how hard it is now to make money. They are right, it is harder, but that is the new reality that drives the current market.
Other things of note

Do what you can now to get ready for September forward. Remodel and paint, add equipment, convert to functional and gear up for heavy marketing through the entire remainder of the year. Run hard and fight for every member. If you need help with your physical plant, call Rudy Fabiano’s team. He is adding new people on his staff allowing him to help smaller owners with colors and economical remodels.

Get to a seminar. We have updated the material in the workshop this year to reflect what is going on with pricing and most importantly, the shift in the market toward a more functional driven business plan. If you don’t know what I am talking about, you should come see us soon.

All Laws of Predictability are now Suspended in the Fitness Business World

Published on 06/01/09 04:52PM by Thomas Plummer

All laws of predictability are now suspended in the fitness business world.

The fitness business used to be a business where you could actually project your numbers ahead for six months or a year and then come fairly close to achieving those numbers. Members worked out everyday as usual, the typical number of new sales signed up this year compared to last year, and cash flow stayed about the same with a consistent EFT draft and in-house money.

If there is one effect, however, from the current economy it is this: predictability is gone and managing cash flow on a daily basis is the new ground rule of a successful small business.

I was talking to Robert Creech, who with his brother David own and operate a number of clubs in Mississippi including a 40,000 square foot flagship. They are two of the more talented owners we see through the NFBA and they are also those rare breeds that understand the deep numbers in the fitness business and how to manage their businesses using these numbers each day.

Robert told me that his total club workouts were solid comparable to last year but it was becoming almost impossible to predict revenue over even a short period of time. Keep in mind that these are guys who look at their business a year in advance, as we all should, and make plans accordingly for reinvestment or acquisition of new clubs.

In response to this inability to know how and when the money is going to arrive, he and David are now concentrating through the end of the summer on just generating and managing daily cash flow. This lack of predictability stems from more members paying later than usual, or not at all, and fluctuations in the renewals, which arrive later than expected.

The Creech brothers also had an unusual take on their business. About a year ago, they spent over a million with Rudy Fabiano to redesign their main club. The purpose of the redesign was to create new revenue sources in the business. At the time, the total number and project seemed overwhelming. Now, according to Robert, the remodel is adding over $400,000 a year in revenue because as noted above the members are still working out in large numbers and buying a lot of in-house purchases while there, such as training, sports bar and tanning.

The significant point here is that we actually see this lack of business predictability in our own company.

The NFBA has been located on Cape Cod since January 2004, and it’s predecessor, the Thomas Plummer Company, was founded in 1991. During all those years, this is the first year where we have looked at our income stream, which has existed in almost the same form for about 20 years, and not been able to accurately predict monthly income. We too are just managing daily cash flow and working with the people who owe us money to help get them stabilized as a receivable again.

The new reality is that the income is still there but for small businesses the importance of managing cash flow on a daily basis, meaning paying bills almost daily, setting aside money now to cover payroll, and hoarding cash for those big hits such as ordering new high dollar supplies, is now the business skill of the moment.

The lesson to be learned from the good operators, such as the Creech brothers, is that a modern fitness business develops more than one revenue stream. In the old days, meaning about three months ago, most of the industry lived from the proceeds of their EFT draft and new sales money. In an unpredictable economy, we now live have to seek cash flow from at least 4-5 different profit centers in any fitness business to keep the total cash flow sustainable on a daily basis. Bills have to be paid, staff has to eat and the only predictable income you have these days is what you made today.

This would be Great Business .. if it weren't for the Damn Members

Published on 05/27/09 03:53PM by Thomas Plummer

This would be a great business if it weren’t for the damn members.

Anyone who has been in this business for at least a few years has said this at least once and the longer you own a fitness business the more often you mumble this to yourself during the day. At some point, however, these personal rantings somehow make us lose the proper moneymaking perspective.

One of my good friends was bitching over a beer at a workshop to me that he went into the club and it took him four hours to make a deposit because the members kept interrupting him. He had stories about how rude the members were to just walk into his office (the door was open) and how inconsiderate it was to just interrupt him while he was trying to work.

My response was to just laugh at the owner. Think about this for a few minutes. The members, who are paying monthly to belong to the club, see the owner sitting at his desk doing a little paperwork and want a question answered or a problem solved. These members are the clients/customers and they are expecting service for the money spent. As they see it, they pay and you help, which is not an unreasonable assumption.

What we have to question is at what point did we lose sight of the important issue that these members are right in their expectation of service and the owner who feels they are intruding in his day is wrong?
My advice is simple. Do all you’re real work at home or some ungodly early time in the morning and then work under the assumption that if you are in the club you are fair game. In the case of the owner mentioned earlier, my advice to him was to build a real office in his house, do all of his critical work at home, and then go to the club and focus on making money and making members happy.

He tried this solution with decent results. He started work at about 7:00 at home and worked until late morning and then headed to the gym. All his real work, such as financial stuff and marketing, was done uninterrupted before he left the house.

Once in the club, he jumped in with this counter staff or worked with member problems, sold the occasional membership and concentrated on other things that grew his business. By getting stuff done at home (the maintenance side of the business) he was free to spend time at the club generating income all day (the income producing side of the business side).

Many owners waste their day doing things that don’t really make a lot of money but it is the age-old argument of being busy instead of being effective. Most owners are very busy. Few owners are effective at making money during the hours they are in the club.

Here are four things you can do now to shift the focus away from a busy day to an effective day:

• Start early in a quiet place: Work from home, or an outside office, turn off your phones and crackberry, and concentrate on getting things done that have to be done to maintain your business. If you really embrace this thought you would also find time to read for 30 minutes in the morning as well.

• Spend your day doing the things that matter and delegate everything else: If it doesn’t make you money, pay someone else to do it and you work on the things that will lead to more money for your business. This is why you shouldn’t do your own payroll, service your own receivables or write checks everyday. These things are important but don’t make you money. Do them at home or farm them out and only do the things that increase your revenue.

• Eliminate the distractions in your workplace: This is the work at home in a quiet room theory. Turn off the television and music and just work for a few hours. I have actually watched people work to see how they function and most end up doing so much less work than they realize because of answering emails, quick phone messages, spouses asking questions or kids. Two hours without disruptions is more time than you realize if you can focus on the task at hand.

• Manage the phones and be very afraid of the crackberries: One of the most powerful things I can teach you is to stop getting addicted to instant response management. Phones and crackberries are supposed to make us more productive but I believe they do more harm than good for most owners. The harm comes from making a dozen or more decisions instantaneously throughout your day without a lot of thought.

When you answer the phone, blast out a response and then move on, you are more into reactionary management instead of proactive management. This means your decision was quick, not thought out, and too short. Instead of quick responses, you would make better decisions, and free up your day to grow your business, if you only returned calls during certain hours and only returned emails once or twice per day. If your car is on fire or your dog was just pancaked by a truck someone will find you but otherwise, work on growing your business and return calls when nothing else important is going on at the club.

We make money in this business through the development of relationships on a day-to-day basis. People are more important in the club than making deposits. Making money today is more important than trying to design your own add. Managing your receivables is more important than collecting your own money. Work on people and production and everything

20 Things that Amaze Thomas Plummer

Published on 05/20/09 01:17PM by Thomas Plummer

Life on the road is a mystery in itself. Why are people always so angry at airports? How can airlines claim to be in the service business and yet still be so rude? At what point does someone just give up and decide to be really fat and not even try. I came to this particular question after watching two really big women order triple scoops of ice cream with Coke chasers at the Atlanta airport.

Life does confuse me by its weirdness and entrances me by its vast array of characters so, based upon too much time sitting in an airport bar, here are about 20 things that still amaze me in the fitness business and in life.

1) That equipment companies spend so much money at trade shows (a million dollars per show for the big companies) and get so little out of the events. Massive trade shows actually seem to work against the large companies in that you have so little time to build relationships with the very customer you are seeking. All those companies would make more money if they go back to their roots and put more money into the face-to-face relationships and less on trying to impress other vendors at the big shows. They all suffer from the fear that if we aren’t doing a big booth at the show, then the other competitors will tell everyone we have financial problems. Tell who? Not many people go to those shows anyway these days. Smaller booths you equipment people and more money in building relationships at the line level where the deals are really done.

2) I am dumb founded that we still design clubs exactly the way we did in the 90s, yet the client doesn’t train that way anymore. Vast fields of equipment designed for the smallest segment in the clubs-the bodybuilder-isn’t productive. The consumer wants functional/lifestyle training but we still just throw him another circuit line. We lie to the clients when we tell them that going around in a circle will get you into shape. We do this because it is easier to let the equipment provide the service instead of us actually learning how to train people into a higher level of fitness.

3) Getting into shape and losing weight is the goal for the largest majority of our clients. If results are truly what you are after as a member at a club, then training with someone like Alwyn or Rachel Cosgrove, Rick Mayo, Rod Steward or Frank Nash will get you better results more quickly in their small specialty clubs then you will achieve at a 20 million dollar massive structure with 100,000 square feet. Why is it that you always see real fitness people, defined as those involved in an athletic endeavor, always training in the small specialty clubs and never using the mainstream fitness facilities even if they are as big as a small town in Iowa? Because it’s the expertise, not the shear amount of equipment, that gets you to the next level.

4) It amazes me every week that a hotel in almost any city in America can take the same level of employee we use and turn them into customer service machines and we aren’t even smart enough to tell our employees to take the damn gum out of their mouths at the front desk.

5) I find it sad that so many owners still drop close the potential member (knocking off $100 if you sign up today and today only) insulting him, giving the industry a bad name and still expecting it to work. Drop closing is a perfect example of how bad this industry still is.

6) I use to worry about it more but I have aged and become jaded when it comes to consulting. Why do so many people go so far out of their way with time and expense to ask me questions and advice and then do something different that has been proven to hurt other businesses just like theirs?

7) Why are there still women bodybuilders? What a demeaning sport for women although I do admit that the women’s fitness contests are like watching a happy hour at Hooters gone bad and are equally scary.

8) Why can one trainer with a few kettle bells and medicine balls get you in better shape than the large majority of trainers working in a commercial gym?

9) Is the golf swing the single most difficult move in sports? Greg Rose at TPI (mytpi.com) says so and I think he is right, especially when you see so many athletes from other sports get so humbled.

10) It is amazing that owners spend so little money to hire staff, train them for about an hour, throw them at the front desk and then bitch about how bad staff is these days. Hire better people and put a lot of training into them and stop being a staff moron.

11) Why is it more important for most owners to prove that something they learned from another club owner 10 years ago in a different market, different time and different culture still works and that a worthless idea from a decade ago is more important than making money in today’s market. Very little from our past still works with today’s more sophisticated buyer, yet we refuse to embrace new tech and new ideas built for today’s market.

12) Why would someone still smoke after the millions of pages of research available that tells you it is one of the dumbest things anyone on the planet can do? And this goes for fat people too. When you struggle hauling your fat ass up stairs (assuming the elevator is broken) it is God telling you to drop the donut and get your ass moving. Why would most people rather die than change?

13) Why do most owners insist on making up crap, such as programming and software solutions, instead of buying something proven at hundreds of clubs? Buying off the shelf makes more sense than endlessly trying to rip off programs because you are cheap or egotistical.

14) It is frustrating to watch an owner let staff make decisions he or she should be making, such as an old aerobic queen who refuses to bring in a proven national program or the book keeper that fights getting a national third-party financial service company to handle the receivables. We know these people are fighting for their jobs and will make decisions they perceive to protect themselves but why does an owner listen to these people?

15) It was interesting to see a new start up company at the IHRSA show that obviously spent big money on getting new equipment to the market. The equipment-stuff that simulates working out with free weights. Why not just save $75,000 and buy the free weights instead?

16) It amazes me that people still buy Nautilus. It proves that the equipment had brand power but after all these years it is just another line of fixed plane stuff and the fitness world doesn’t really need that much more fixed equipment even if you were the first.

17) I have lost a lot of sleep over the years wondering why owners refuse to learn about marketing, don’t market regularly and then die from no leads. What is more important to a fitness business than leads? Why would you cut marketing first and guarantee the death of your business?

18) Why are there owners in this industry who couldn’t do 25 pushups to win a thousand dollar bet? Hey you knucklehead, Pizza Hut is hiring.

19) Why don’t people who open gyms understand that it is an 80 a week job and you work a lot of nights? Why would you think you can build an expensive business and then go home at 5:00 and turn it over to kids working for $8 an hour?

20) It should be law and it should be part of every owner’s mandatory read before they open: You can’t fix stupid no matter how much money your daddy has?
And a bonus

21) Why don’t you bring your staff once a year to our workshops, get new ideas because we do change every year, and write a business plan during the workshop that you can install as soon as you get home? When was the last time you got out of the club and spent three days working on fixing what is wrong and seeking new ideas that will take you to a higher financial level? And why we are at it, why don’t you go to other seminars and get new ideas from guys like Perform Better or Titleist Performance Institute?

Thought for the week: Get your butt moving. You should be working on a total relaunch for September to take advantage of the rising markets and improving economy. Only the aggressive will dominate a market and it is your time to move fast and capture share.

The Fitness Industry has Hit Rock Bottom!

Published on 05/05/09 03:54PM by Thomas Plummer

Every person that has ever suffered from a drinking problem knows the old adage that there is never change until you hit bottom. Then, and only then, can you admit you have an issue and rebuild your life.
In this industry, we have hit bottom and we’re floundering on the floor like a bunch of wet monkeys in a hot tub. We have found the bottom and we now have no way to go but up.

How do you define bottom in the fitness business? We as an industry track the national membership numbers every year and then we bend them until they break and we still show flat growth. We track new clubs opening, and when the truth finally emerges from this recent alleged recession, we will find that we probably shrunk in total club numbers with the biggest hits occurring in the circuit club and dinosaur classes (dinosaurs are generic box clubs left over from the 80’s who still have the same old business practices, and probably the same original equipment, that give us all such a bad name in this industry).

We don’t have any exciting new business models, and despite the success of the small training club segment, sports performance centers and the rare chain showing growth, such as Planet Fitness, we seem to be more in a retraction mode than growth mode. We’re trapped by 50 years of bad mistakes and we just can’t seem to break into the next generation of fitness that will feed the industry for the coming decade.

I think the revelation for all of us is that this needed breakthrough won’t come in the equipment or workout concept segments, but rather in the industry’s maturity in our business practices. This much anticipated awakening, when it comes, will be in our selection and management of the people who work in our clubs. So far in the history of this industry, we have been horrible in this portion of the business, yet this where we have to target to get to the next level of growth in members and new clubs.

In the fitness business, we spend most of our time as owners and managers managing the business and very little actual time managing our people. We market, we manage processes such as receivables, we pick the perfect, yet out-of-date equipment line, and we keep our clubs open for business.

We also spend an inordinate amount of time looking for the next gizmo or class that will drive millions of new members to the club. Perhaps we are so overwhelmed by infomercials about fitness that we really do believe that there is one class DVD or unique piece of equipment (maybe Tony Little and the Gazelle) that makes millions of people instantly and forever in shape.

The reality is that we have made fitness a horrible experience for the average person. We put them on routines designed for 1970’s bodybuilders, we teach them to go around in circles on the same equipment week after week and we believe that equipment and acreage makes up for horrendous service and young dumbasses working the front counters. Fitness clubs aren’t fun and over the years we have progressed away from being a service and people driven business to becoming nothing more than a vast floor of equipment that is several decades out of work and was never designed for a functional fitness approach to life.

One of the jaw on the floor moments from our workshops over the years has been the question, “How much time do you spend a week training your staff?” The average fitness business owner in this country, despite about 60 years of collective experience, only works with his staff for an hour or less a week.
Despite what you hear at a trade show, we are in the experience/service business and not the equipment business. We have, however, become extremely dependent on equipment and other amenities in the club to do the job we are supposed to do, which is to build strong relationships with the people who depend on us to help them change their lives.

Another way to look at it is we are in the service business dependent on a large number of young people providing service to our most valuable asset, which is represented by the members and their monthly payments. The powerful point to consider here is that the average person working in our club, standing in front of the largest number of customers per week, is trained for that job less than one hour per week.
Compare your staff to a person the same age working at Starbucks. How does your staff handle the customers compared to those employees? Compare your staff to the average nice hotel check-in staff.

These hotel people, by the way, make about the same money as most club people. How are the hotel people dressed? How are they trained to handle service? How well mannered and well spoken are they as a whole?

Even you reading this who are nodding your heads and saying your staff can hold its own against other service people are suffering from delusions. Having a body at the front counter with a tee shirt tucked in is not staff training and it is definitely not customer service.

Staff training should be our biggest concern for the week, not something we do after everything else is done. Staffing, relationship building, real customer service, member retention and other industry defining issues are something we haven’t even stumbled upon yet, even by accident or even as practiced by a small number of owners who are trying to create a business that is people dependent and not equipment dependent.

What I am reading again: This week I am reading, The Simple Truth, by Alex Brennan-Martin. It is a small, but powerful read, that I find myself picking up at least once a year. It is important to help you focus on what is the true focus of your business.

Bad Staff - Who's Fault is it?

Published on 04/28/09 11:28AM by Thomas Plummer

Perhaps the most common owner rant, usually preceded by a few beers, is about staff and how truly stupid they are. The staff doesn’t take responsibility for their jobs, they can’t, or won’t perform the duties we pay them for, and just when your club is really doing nice numbers your best employee leaves and you have to start all over again. Blah, blah, blah and more blah. Whine, whine, whine.

Keep blaming the staff if it makes you feel better but the reality is that most of this is your fault. The good news though is that, through the combination of heavy reading, divine intervention, a little trial and error and a good bottle of wine you can sort out these issues and move your business forward.

Most owners get out of their staff exactly what they put into them. You have crappy people working for you because you hired crappy people, didn’t train them well, and then you get mad at them when they don’t perform to some high level that really doesn’t have any relationship to the business except you need the that much money and they have to go make it today.

One of the most true staff adages is that you get what you buy. Pay peanuts and get stupid monkeys. Many owners are so cheap they only get young, very stupid people who work for them. If you pay a low number for your area and attract a nineteen-year-old person who has no real business experience, or maybe you are her first job, then unless you are willing to put a lot of hours into this person nothing will change. You just can’t fix stupid and you shouldn’t spend a lot of time trying.

The magic number for most areas of the country that separates talent from just a dumbass filling a time slot is about $2-3 per hour. For example, local minimum wage is what it costs you to get someone to show up for a front counter position. Let’s say you are in a market where you have to advertise and pay $8 per hour to get anyone to apply for the front counter position. How good is this person? How old will he or she be? How much work experience in the real world does this person possess?

Advertising a rate at $2-3 more per hour will attract a higher quality person to the job as compared to what the scenario above usually brings through the door. Although it sounds like a lot of money, a few bucks more an hour, or about $360 per month, isn’t much if the person can produce and has some real business experience. Production-based people earn their money back in 60 days or less while young dummies never justify even the $8 you pay them.

Another way to look at this is that you hire lousy people to do a customer service driven job, which they don’t have the maturity or experience to do, and when that doesn’t work you end up throwing more stupid kids in the pile. The thing to keep in mind is that a full time person with business experience in customer service or retail working 40 hours per week can do more than 60 hours of untrained, immature rookies.

You then compound matters by poorly training the people you do hire. Think here deeply for a moment. You hire people with no experience in anything, and then don’t train them once you get them, but still expect the person to perform at a very high level. Maybe the person you hired isn’t the real dumbass here?
Training any staff, even one with maturity and some talent, takes about 4-6 hours per week. Put in less you get less. Put in more you might make more money over time.

But most owners don’t know how to train staff. They know how to do a curl, which by the way is also outdated and useless technology, but you haven’t read a business book or attended a staff training workshop in a year. The staff only gets better if you are willing to get better, but most owners bluntly won’t do the work because it is too hard. If this is you, stop bitching about your staff because you are getting exactly what you put into them, which is very little at a big expense.

Another issue is setting expectations. Most owners create situational, and often unreal expectations, for their staff. For example, I was working with an owner who was doing a sales meeting. She puts up a flipchart and writes 100 new memberships, 70 renewals and $10,000 in new sales cash on a sheet and then tells the team these are the numbers for the coming month.

After the group left, I asked her how she came up with those numbers? “This is what I need to make this month to pay the bills and buy two new treads” What did you base those numbers on? “You don’t understand me. Those are the numbers I need this month to pay bills.”

After pounding her for a little while longer we established that she had about the same chance of making those numbers as I have of playing golf on the PGA tour, which is beyond a physicists ability to calculate below zero.

The most she had ever done in that same month was about 80. Her renewals had been down and she had only hit this number once in the last 12 months and that was in a month where a much larger number of members had signed up the year before. She also had only been averaging about $7000 in new sales money in that target month. In other words, where in the wide expanses of hell did she come up with such donkey poo poo numbers? She mad them up and the staff knows they aren’t realistic so how hard will someone chase a figment of the owners imagination?

Your staff can deal with expectations and in fact want numbers they can chase each month. Using more realistic numbers, and then showing the team how she came up with them and that each category was realistic for the coming month, would have better served this owner. If you don’t know how to project, see my books because I do talk a lot about history and time line projections and how to do them each month.

Everyone, everyday, needs a realistic target to chase. Even the front counter kids need a daily goal to go after on their shift. Realistic expectations and goals are a motivator but fake numbers pulled out the magical butt demotivates a staff person over time because no matter how hard they work it is almost impossible to hit numbers that have no reality tie to the business.

Staff training isn’t hard, especially if you stick to the basics of the business. How to greet people at the door, how to answer the phone, basic sales and basic courtesy, and other simple tasks that lead to high member retention and increased sales are all things that should be talked about weekly. Friday afternoons are still the best time to train staff and every owner should block out at least four hours every single week to get the staff moving.

Also consider bringing in outside people to train, such as your local real estate person or banker who might have the skills you lack to start basic customer service or sales training. You might also keep in mind that many of the equipment companies you deal with can do excellent training not only on their stuff but also with fitness in general. Aaron Moser from Perform Better, for example, has been know to do a four hour install that gets rave reviews from the owners and staff and brings everyone up to date in some of the newer functional aspects of fitness.

One of the funniest things the NFBA staff hears on the phone is the owner who states, “I don’t want to bring any of my staff to the workshop because what happens if I spend that money and then they quit?” Good question, but I would be more concerned if I didn’t train the person and they stayed for another year.

Keeping people on the job too long because they are nice is a curse. Nice people simple fly low under the kick-their-ass-out-radar and always get a longer break. I am especially concerned with employees who have been around for just too long.

During the last year, I have worked with a number of owners who brag because they have people on the staff that has been with them for over 10 years and in one case the owner had three staff people who had been with her for over 15 years.

The first thing to ask here is do these people still produce any revenue for the company? Not surprisingly, none of the five people in questions really did anything at the club. One worked the counter but had no accountability for dollars on her shift. One was sort of a manager but wasn’t held accountable if the clubs she controlled didn’t hit target deposit and the rest were equally as worthless. There is no production without individual accountability.

All of these people were deemed loyal employees and all should have been put on a 30-day probation period, given goals to hit and then fired if they failed. Work is a privilege you get only if you perform. This group cost the owners a lot of money because each one got a raise every year and were now making several dollars more and hour than the job was worth.

What happened here, and is an important lesson to learn, is that your best people will leave after three years or so while the laziest and lowest performers will stay as along as you pay them. Accountability weeds out the weak and people who just show up year-after-year will eventually leave on their own if there are numbers that have to be made each month.

The final point to note about most owners and their staff is that they become personality dependent. “I just lost Sarah and it is crushing me this month.”

Personality dependent means you make money when you have workers who work and you lose money when you are between employees that perform. You have no systems in place; you simply go from highs and lows dependent on whom you have working for you at the time.

System dependent means you create systems in your business that allow lesser employees to perform at a higher level, yet the better and more skilled people will even get more done. The vast majority of clubs are simply held hostage by the people they hire and get beaten if a key employee walks out the door because there are no systems in place to guide the staff; simply a little training that gets the staff moving and then abandons them to the day-to-day routine.

A website worth looking at: Warrior X-Fit, functional driven site done by Bill Clark of the ATA, or American Taekwondo Association. The site has a free membership and a workout of the day and if you get involved you can take part in the ranking system. Bill Clark is a legend in martial arts world creating a lot of the business systems in the ATA and influencing a lot of the fighters and early MMA training.

What I am reading: Made to Stick, by Heath and Heath, a book on marketing that will help you start to develop a different thought process for promoting your business in the next few years.

Generalists Eat Last at the Table!

Published on 04/22/09 07:05PM by Thomas Plummer

Generalists are people who provide the same services as other people and then try to compete on price.

Generalists are chosen by convenience. For example, if there are five training studios in my neighborhood all providing training designed for anyone who comes through the door, then the one closest to my house will win.

Specialists are people who possess specific skills and apply those skills to different segments of the population.

Specialists are sought out by consumers looking for a specific skill set or talent.

Specialists make more money than generalists.

Almost every business in the world, such as the auto industry or medicine, has progressed over time from generalists trying to please everyone to specialists who target varying segments of the population. Look at the typical Jetta and its under 30 market or your corporate attorney for validation.

This simple progression is a fact of business, yet we in the fitness business seem to be late to this dance. Many of us still fight to build the perfect club that has everything for everyone so no single member of the community feels excluded. The problem here is that the old adage applies: those who strive to be everything to everyone are usually nothing to anyone.

Even the ultimate perceived generalist Wal-Mart, who in reality is a targeted specialist seeking the low end bargain hunter more interested in price than quality, and who put most other generalists, such as Woolworth’s, out of business, suffers from lost market share to the small specialists that surround the bigger stores. Gourmet food stores, shoe stores and lawn and garden stores all do well located near the giant boxes.

In our world, we are now seeing the first inkling of specialists emerging. Planet Fitness is looking for the buyer who wants minimal service and a clean club for about $10 a month. Anytime Fitness created a solid model for the secondary markets and can insert a financially successful model into a town of 25,000 people.

There are a few other exceptions but the bulk of our industry is still an ill-defined mess applying a generic model of fitness to an increasingly specialist world. Walk through almost any town in America and you will stumble into a 20,000 square foot box with a bunch of cardio too close together, too much fixed equipment few people use anymore, one or two badly decorated group rooms, poorly finished locker rooms and an ugly front counter that looks like it came out of a closeout sale for unsold Formica. All the same and all claiming to be the fitness answer for everyone in that community.

Learn this now and learn it well. You have to become a specialist in the coming years if you want to survive in this industry. And this just isn’t limited to clubs either but pertains to everyone who works in the industry as well.

Trainers need to stop being the guy or girl that works with everyone and start specializing in something that excites them and where there is more money. Be a youth specialist, sports performance person or the one person in town that knows more about training women over 50 than any other trainer.
Find one thing you care about and then learn more about it than any other person and you will always make more money than the poor generalists. Kill the category and become the person who is known as the source for that information in your market.

Training clubs need to evolve. Mainstream fitness facilities need to declare and go after specific markets. Franchises need to carve out a niche and let it evolve instead of failing to reinvent the concept as time passes. Nothing is deader in this industry than an old franchise concept locked into the first year it opened and still using the same marketing tools and ideas. Everything changes and everything moves from large groups to smaller target groups.

The barrier to change is that this concept is so hard to understand for most novice owners. Let me get this right, you want me to turn away clients because they aren’t my specialty? Won’t I lose business, and decrease my potential market share, by eliminating large segments of the population as possible members?

As strange as it sounds, the narrower the niche the larger the market because likes attract likes. Upscale clubs attract upscale members because people with money hate to hang out with poor people.
Mixed martial arts centers will do better than generalist martial arts that teach adults and kids together. Trainers with a specialization in golf swing efficiency will draw golfers, and their friends, who want a trainer who does nothing but work with golf people. Remember, generalists are chosen for convenience, but specialists are sought out for their specific skills.

So where does this leave the fitness industry? Some theorists state that the industry will come down to nothing but a few large chains that dominate all the level one markets. Eventually, they claim, everything will be like the drug store business that has seen the end of the family owned store and the evolution of the chain takeover during the last 10 years.

Not in this industry. Even the super franchises, such as Gold’s and Anytime, still allow the local guys to make many of their own decisions as how to operate in their markets. They make their own choices about pricing, offerings and marketing. The true chains, such as 24 Hour (company stores) or Planet Fitness (franchise), exert more control over their clubs but out of all of the chain strategies, only PF shows sign of life a progression in the marketplace. Most other groups, no matter how large the reputation or number of clubs, reach a point of no return where the ability to develop new clubs and profit from the ones already opened stalls.

The question for all owners in the field is who specifically is your target market and how do you go after those people. By using generic ads with stock photos? By running 1980’s price specials? By trying to house 20 or so unfinished parts of your business under one roof because you try to offer everything but really finish nothing?

Choose a specific target market and master that segment. Advertise to them. Talk to them. Design your facility to meet their needs. Evolve, grow and specialize and the future will be yours in this industry.

Hot topic: One of the hot topics popping up through emails right now is the $1 down special that Planet Fitness ran this winter with such strong results. We ran $1 a number of years ago in about 300 martial arts schools, and in about 70 fitness centers, and we put big numbers on the board. In fact, it was probably the single most effective promotion we ever ran during our years as consultants for that group.
And then reality hit the proverbial fan. During the next 120 days, the losses for those memberships were staggering often exceeding over 60 percent in many of the facilities. We wrote a lot of paper but it turned out to be extremely difficult to collect.

Memberships are only as good as what the person has invested up front. If you have little invested, the perceived value, and ultimate personal loss if you don’t pay, is small. Most memberships gain collectability when the buyer puts at least the equivalent of 10 percent down of the total value of the membership when he buys.

Planet Fitness is getting a buck down and $10 to join. The volume is there but the losses over the next six months on that paper will be interesting to track.

Could we do this in the mainstream world? You could try the $1 but make sure you get the first month’s payment as well or you will be writing a lot of lost opportunity in the future.

Think Chicago: We are having our advanced workshop in Chicago again this year. We sold out last year and will do so again this year. This is our owner and manager’s retreat for three days to discuss topics related to owners trying to get new ideas to keep their business vital and growing in the future. We also have great guest speakers at these events as well. For this year we already have Alwyn and Rachel Cosgrove, the functional training gurus and successful training club operators as well as Dana Anspach, an investment brain who talked last year about building wealth in your life. If you want in for this book soon and check the website for additional speakers as we add them.

Converting Leads into New Members

Published on 04/13/09 09:59AM by Thomas Plummer

You would think that after over 60 years of sales training in this industry we would be good at converting potential leads into new members but the reality is that we are probably getting worse as time goes by.

The reversal of skills comes because how we sell, and the potential member’s sophistication and expectations, have changed over the last few years. In the olden days of the fitness industry, meaning just last week because we still insist on using technology that is five decades out of date, we lived and died in this business by the pressure sale. Get a lead in the door, drop close aggressively and move on to the next lead.

Drop closing for you youngsters without psychotic experience in this business means you set a stupid price, such as $150, as your down payment and then leverage the sale by dropping the number to $50 or so if you sign today. This still works if your client is as stupid as a pile of mud laying in the middle of the road but for the most part no one with an IQ over that of your average hamster believes anyone ever really paid the full $150.

This degrading system is failing and the industry is in a transitional period right now that is quickly forcing many owners to adjust their practices to more ethical yet still effective methods. We still have to convert leads into members but how we do it is rapidly changing due to the more sales experienced member and the amount of competition a typical club now has.

The gold standard of sales is do you have the ability to convert at least 60 percent of your qualified leads into real members? The answer based upon national averages, which hovers below 40 percent, is no, we can’t convert enough leads monthly to support most of the clubs in the market. Put another way, most clubs do get enough leads through the door each month, if they can accurately control and count the leads, to make that club profitable over time, but the owner simply doesn’t have the skills to develop a staff that can effectively close those same leads.

This failure to close puts pressure on the entire club business system. If you can’t close over 40 percent of your leads, then you have to spend more on marketing to buy a greater number of leads, or misses in your case if you are holding at the 38 percent national average and just keep walking those prospects to the door, which most clubs just can’t afford to do. If you can’t close, something else usually has to give and that is almost always customer service because all your money goes into sales people who can’t get the job done leaving very little left for hiring decent service staff.

You can rebuild, however, if you are tired of living at the bottom of the fitness food chain. Here are a few ideas we discussed in our recent sales workshop in Charleston, SC, that any club could do to make a difference immediately in your business. These are not those brilliant, write it down on a napkin at the bar ideas, but most good business is really nothing more than mastering the basic skills anyway.

Get control of your leads: How many qualified leads do you get through the door each month, on an average Monday, on Saturday morning or on any other day of the week? Most owners can’t honestly answer that question. Ask a McDonald’s manager, however, what his average ticket sale is and he can answer that in about three seconds. There are fundamental numbers every successful owner has to know and how many leads through the door during the month and prime times is one of the most important. Use a basic inquiry sheet but start here to fix your sales effort. If you don’t know how many leads you have, then you can’t determine your true closing rate, which means you can’t tell how effective your sales effort is over time.

Do sales training daily: Even if you are the only employee in your club, sit down at least once a day and read and study about how to properly present your business to a prospective client. Keep in mind that in today’s market, sales are defined as the simple skill of helping people get what they came in for. We don’t have to pressure or hurt people to be effective at sales but we do have to learn how to help people take the first step on their fitness journey and that often means we have to spend a lot of time practicing how we present the club and its services. If you have a larger staff, go back to a 30-minute sales meeting every day to focus on numbers and short training efforts. Train every single day on how you can be more effective on helping your clients get involved in your business.

Hire adults for the job: Stop hiring young, stupid male salespeople. The trend has always been to hire the stereotypical sales person from the chain clubs. He is young, a killer at the drop close, and knows every Tom Hopkins sales pitch in the book. He is also disruptive to your system, high maintenance, dates all your members and can’t be coached because he only knows one way to sell, which is far too dated and aggressive for today’s market. Hire adults and usually look for that plus 30 female who has customer service experience. Her communications skills are better, she presents a better first image, she can relate to a wider range of people, she will sell from a position of helping rather than forcing and she will often stay longer in your business.

Start a basic follow up system that you can maintain over time: Phone calls are not follow up. Phone calls are what you do when you don’t train your staff on how to properly follow up a sales lead because no one answers their phone anymore. Use emails, use handwritten thank you notes, leave encouraging messages to get involved but do not depend on harassing clients on the phone until they give up and join. You should have at least a three step follow up system in place and most clubs should have at least five steps over 30 days to be effective. Calling people at home and begging them to come back is not one of these steps.

Get a dedicated sales person: You can’t use multitaskers and expect to be effective. Get a dedicated salesperson whose sole job is new member acquisition and then pay that person well for the work. In most markets, you have to pay at least $12-15 per hour and commissions of at least $15-25 per sale to get anyone decent. Pay peanuts and get monkeys. Don’t believe me? How did your staff of monkeys making $7 and hour do last month?

Owners need to learn to sell as well. If you own only one club, then you should still do the majority of sales in your business each month. There is nothing more important than generating new memberships for your business. If you aren’t any good at it yet, keep practicing because you can’t teach it if you have never done it. If you have no idea where to start, check out my book, Anyone Can Sell. The title says it all.
Thought of the week: The economy is already coming back and club sales, except for the first two weeks of February, have been decent. Get off your ass and attack. Market, train your staff in sales, go to a Perform Better Summit and get some new ideas but don’t just sit there waiting for business to happen.

What's your public perception?

Published on 03/31/09 10:43AM by Thomas Plummer

The public’s perception of your business is far more important than just plain traditional advertising. When you get a positive public perception, you have to earn it. Most owners skip this process and just focus on traditional ad campaigns, such as direct mail, to try and buy an image. Successful businesses work hard on both because without a positive image in your marketplace all the ads in the world won’t do much to help you get new business.

Most owners just don’t worry enough as to how their business is perceived by the marketplace they seek to serve. Maybe this comes from the wrong perception that they think their business has its own personality, like a puppy or favorite grandparent, and is something all the members love and enjoy. You can tell when owners think of their business as something with a living personality when they tell everyone, “Oh, the members love my business. They tell me they couldn’t live without us.”

Personality is defined as something that has human traits, such as, “I put my life into that business. It’s almost like my baby.” This emotional perception is what gets most owners into trouble because it clouds your judgment as to what is really going on in your business.

Your business doesn’t have a personality, but it does have an image in your community. This image is something you craft slowly over time member-by-member and through the constant flow of advertising and public relations you generate for your business. Signs of a good image are when customers say things such as, “They really take care of their members at that club” or “I think that is the cleanest club I have ever worked out in”.

Image is everything and nothing establishes your image, or damages it, in your community more than your staff choices and customer service training. You are only as good as your people and the training they receive, which means for most owners who only train their staff a few hours a month, your image in your market is weak.

Your staff does not just spontaneously combust one day and become excellent delivers of customer service. If you’re not training your staff at least four hours a week on service, then the people who work for you are making things up on their own and their definition of customer service probably isn’t going to match the image you want to build and project over time.

How good is your image? If you have to beat members for referrals then you have a lousy image in your market. In other words, if you have to ask for a referral then you are doing something really wrong in your business. Happy customers bring in friends and relatives because they wish to share an exceptional experience with others. Think about your experience at a new restaurant and how willing you are to share your opinion, good or bad, with anyone who asks. If it is good, you’re going to tell someone even if the restaurant isn’t paying you somehow to do so.

If someone is happy with what they bought you can be guaranteed that person will be telling others about the product or service because they look brighter because of the choice they made. “Hey, you have to check out this club I found. It might be the best in town and you just have to come with me to see for yourself.” This person wants to flaunt what he found because it makes him look smarter.
No one wants to bring a friend to a club that is a dump with a young and stupid front counter staff. “Hey, you have to check this new club I stupidly joined. Just wait and see how badly they beat you in the sales office.”

Customer service is the first line of image building. Even if you have a mediocre physical plant and equipment you can still compete on a higher level if you can deliver strong customer service over time. Service beats new and flashy with a below average staff every time.

Keep in mind that I visit a large number of clubs per year and even some of the perceived best struggle with basic customer service. Customer service isn’t hard, which is why it’s probably ignored as too basic for someone to care who is fighting through all the other recurring issues we deal with in this business.
Remember how much you paid to buy that member initially and then put a little effort into all of your front line people to train them to provide an experience that will keep your members staying longer and paying longer in the system.

Here are a few key points of service we are discussing in this year’s workshops. Try these and start training your staff aggressively now to deliver the best service you can in your market. I have also written these from the perspective of a pissed off member.

If I pay, I expect you to provide a decent service, even if my payment isn’t all that big.

Answer the damn phone

Answer the phone within three rings. No exception. That also means you small training clubs too. Answer it live with no machines and with a voice that is professional and is trained to provide service.
Use a strong welcoming statement on the phone:
"Hello, we’re having a great day at the Workout Company. Make it strong and positive. Eliminate the weak retail greeting: Hello, thank you for calling the Workout Company. My name is Sarah, how may I help you?"

This is boring, weak and has no energy. We are in the energy business people and it starts on the phone.

Use a strong welcoming statement every time I walk through the door

Act like you’re happy to see me every day. You know, sort of like you recognize the fact that I haven’t missed a payment in two years and support the place (at least in my mind). Try the same one as above: Hello, we’re having a great day at the Workout Company. Is it repetitive? Yes! Do the member’s love it? Yes, because it creates the illusion that you’re coming home to your gym everyday.

If I am paying you, at least know my name

I still find it amazing after all these years in the business that owners put so little time into knowing the names of the people who make their business possible. Reward your staff for knowing names. Give bonuses for a staff person who can name 50 members at the door before they get to the computer. Make sure your third-party software system has an option to get member pictures and that flashes names when people check in and then use those names every chance you get. It is outrageous that you take someone’s money and then don’t know the names of the people who make your life possible.

Thank me for my business

Thank me for coming by the club to day as I leave. Thank me when I buy a bottle of water. Thank me with something unexpected if I bring a friend. Be grateful for the money I supply. Thank everyone every single time they visit your club as they leave for the day.

Clean this place better than you ever imagined

Your club is never as clean as you think it is. Never! The members want clean but many owners, even with the best intentions and who think it is clean, just miss too many things. Because of the size and weight of our stuff in the clubs, we never really clean the place. We usually only surface wipe, which means you wipe down the surfaces of everything. That is what most cleaning services provide and for most owners this is enough.

The problem, however, is that this isn’t nearly enough for the members. You have to go beyond surface wipes to get a really clean club. You have to move stuff, clean behind stuff, disinfect things like lockers and do the ugly stuff that is the difference between what you will accept as clean and what the members really want as clean.

Where we have been these days: The NFBA Orlando workshop turned out to be the best workshop we have ever had in Florida. We had about 80 participants, including a number who had just done our IHRSA one-day the week before in San Francisco and then followed us to Florida. We also had a number of Titleist Performance Institute (mytpi.com) certified professionals attend during the last few workshops. This specialization might one of the fastest growing segments, along with kettle bell certification, in the industry.

Anthony is out of his mind: Anthony Diluglio, the vintage fitness guru and kettle bell innovator, is making a statement with his new program to push youth fitness into the schools. He is giving any school, through local trainers and with a letter certifying that there is an educator at the school accepting the program, a free rope and workout dvd designed for the youth market. Again, this is absolutely free. The trainer just needs to make contact with a school and be willing to donate the necessary time to go teach the classes as the program develops. Kudos to Anthony for putting his money where most people’s mouth is and for the huge investment he is making toward this effort. Find him and the program at artofstrength.com.

Marketing - "It doesn't work ... "

Published on 03/18/09 09:55AM by Thomas Plummer

Marketing questions are still come up frequently in any discussions with a fitness facility owner. Most of these questions, however, are usually preceded by the comments, “Marketing doesn’t work in our area” or “That may work back East (or up North, down south or out West, really anywhere but here) but it just doesn’t work here.”

Most marketing in clubs fails because the owners don’t have any type of plan in place over time or any set expected outcome. There is also an issue for most that the expected results are so unreasonable that the marketing is doomed to fail no matter what it might bring through the door.

The key thing to remember with marketing is that even mediocre marketing will work if you practice two basic rules. First of all, you must market weekly for the rest of your life. Secondly, you must send a consistent message to the consumers in your target market over time.

Mike Grondahl, one of the founders of Planet Fitness, is probably one of the best marketing guys to ever work in the industry and even he gets frustrated with the guys in his franchise because they simply won’t stick to the plan of getting a large number of economical images in front of your target market each month.

During one of my past chats with Mike, he stressed that he taught the new franchisees to get out about 35,000 low cost, oversized post cards per month, every month, and to run the same offer, with a strong call to action (expiration date) on every card, until you simply wore the market out over time. After you wore out that offer, you chose another and then repeated the process.

The concept to learn here is to get out a large number of images (cards, flyers, door hangers) each month until you develop a strong recognition factor in your target market. The sad part is that for most owners in this industry, 35,000 postcards represents about two years worth of mailings, not one month.
The majority of owners will cut marketing before they cut any other expense and marketing should be the last thing you cut back on if times are tough. Cut your staff, sell your car, work more hours but without consistent marketing there is no hope for your business.

Marketing done correctly should accomplish a list of things to help your business grow:

• Marketing should be based upon an offer that gets you the biggest capture over the longest period of time

• Marketing should strangle your competition

• Marketing should lower or eliminate the perceived risk of trying the club for the consumer

• Marketing should develop new markets rather than constantly tapping into the existing fitness member pools. For example, only 16% of the people in this country have ever set foot in a fitness center. Market to the 84% that haven’t been in clubs; because the 16%, or consistent fitness people, have already been in your club because they check out all the clubs near their home before they join any of them

The offer we have been recommending, based upon the clubs we tested it in last year, is the 30-day for $19 risk free trial membership. If you have a training club, we have been offering 30 days for $89 or if you are in a competitive, low priced market, we tweak it to 30 days for $9.95.

Many of the clubs running this offer have had a great deal of success although we did discover an odd result in certain markets. A small percentage of our clients who have been running the risk free 14-day trial over the last several years switched to the 30-day for $19 offer and it didn’t work. They then switched back to the 14-day and it brought a lot of leads through the door again. We don’t know why this happens but it has happened for a significant number of units and it is worth keeping an eye on when your try this offer.

Risk free trials also draw the biggest capture over the longest period of time. This concept also accomplished the second major expectation, which is to strangle your competition. If you are taking leads out of the market for 30 days at a time, you are hurting your competition over time by keeping qualified leads out of their clubs and in yours. After 30 days, either you get them or no one does because the potential member either joins or walks away, which also means he seldom joins another club because of his 30 days of experience with you.

Risk is still the biggest barrier to entry for most potential members. What if I join and then don’t like it? What if I lose my job? Am I going to be stuck? All these rattle around a potential member’s head and cost you new sales over time.

The words, “risk free trial” softens the first level of entry for most people, if you clearly explain how the trial works, which most owners miss when they put together their marketing pieces. Most just list the trial and then assume the marketplace understands what it means and how to take advantage of it. If a potential member takes the 30 days for $19, the most he would risk is just the $19. He can try it and then walk away at the end of 30 days losing just a few bucks.

The current economy, along with the endless stream of media fear mongering, has also made the consumer much more cautious. The risk free trial softens this too but many clubs need to do additional steps to cover the person who is afraid of joining the club and then losing their job. You can cover these folks by simply adding an addendum to your membership agreement that states with proof of loss of job you will cancel the membership immediately. Make sure you run this by your third-party financial service company before you launch this but it will help you make more sales if done properly.

I have talked to a number of owners in recent weeks that are still hesitant to commit to a full marketing program this year. What are you waiting for? You still own the business and still have bills to pay. Start now and start aggressively.

Another important point here is to find a consistent image you can live with over time. Perhaps one of the biggest rookie mistakes is to change your look, or delivery system, every time a new ad comes out. Find a series of ads you really like and then commit to that look in your ads for the next five years. Yes, you will get bored, your members will get bored and your spouse will get bored but consistency builds brand recognition and that is what you’re really after in your market. I am sure that the management team sits around Pillsbury going, “Are we still running those damn ads with the doughboy?” The doughboy, one of the most recognized symbols in the world, was built one ad at a time over a 40-year time span. Be patient and be bored but build a name in your community over time.

The last point is that sometimes ads work immediately, and sometimes they don’t, but almost all ads work over time. This means that the longer you run ads the more they will draw if you are using a consistent theme, market every week, and use a risk free offer. Couple these things with a valid testimonial and you have a complete ad campaign.

Words of Caution: Attack now, attack often and make business happen. Clubs are making money but if you sit and wait you will fail. If there is less business coming through the door this year, you can at least get out 500 door hangers within a mile of your club every Saturday. If you need new members, run a solid membership referral program (call us if you need help) but do something now to make the business grow.

If you need help: We have consulting available by phone and can help you manage your business and train your staff. The NFBA has solutions ranging from a single phone call to weekly set phone time if you need guidance to keep you focused. Call us if you need 800-726-3506

What is Your Management Style?

Published on 03/02/09 11:34AM by Thomas Plummer

There is a unique way to look at your personal management style that I have noticed is a strong indicator of how successful you will be in this business: you either manage by fear of failure or you manage by pursuit of success.

Every owner approaches his business armed with one of these two styles. Each decision you make in your business, from simple day-to-day operation decisions to big picture strategy issues, such as the acquisition of your property, is governed by your individual style. Most owners, however, aren’t really aware of the perspective they bring to their business. They are who they are and they seldom question why they make the decisions they do.

The fear of failure management style is by far the most prevalent, which also correlates as to why so many owners are just average financially in their businesses. The old 20/60/20 rule does definitely apply to our industry as it does to almost every other small business. In this rule, 20% of the owners will make money beyond the norm, 60% are average and the bottom 20% should get jobs and stay away from owning anything. Someday we will talk separately about the bottom 20% and why that happens.

For now, let’s concentrate on the other two categories. The 60%, or eternally average group, hardly ever escapes being mediocre because of their choice of management style, in this case the fear of failure mind set.

If you are a fear of failure manager, you make every decision, no matter how big or small, based upon protecting or maintaining what you have, not on growing or increasing your business. All decisions are made to simply keep what you have going a little longer. You don’t buy enough new equipment because you might fail next year. You don’t spend to train your staff because you might train them and then they will leave you, not thinking about what happens if you don’t train them and they stay with you for another year.

These owners don’t seek new information because they are afraid change will lead to loss. They don’t paint because a member might complain and leave. These owners won’t risk buying a building because you never know when the next big crash will come and they might lose some equity for a year or two. They don’t market because they tried it once and it failed to flood the club the first day and the owner didn’t get his money back today.

Most everything fails for these owners because they never commit and finish anything completely. I tried a juice bar, they claim, but because he never committed to the project fully it did fail; but it wasn’t the concept that failed, it was the owner who was so afraid to spend the money and do it right the first time that the bar was doomed from the first blend.

Loss dictates every decision these people make and leads to a constant pulling in or shrinking of the business. Over time, your business gets worn out and less successful because the members will go somewhere new where the owner is responsive and not afraid to innovate.

Here are a few cues you might be a fear of failure manager. You operate in fear of failure if you can’t stop training clients because you are afraid you will lose income. In this case, you also have an ego issue because you believe everyone asks for you because you are the best. Because you are afraid your income will suffer, or the clients will leave for other facilities if you don’t personally train everyone yourself, you continue to train clients instead of learning to manage and operate your business at a higher level.

Many of you also believe you are over thinkers, meaning you believe you like to take your time and make slow, agonizing decisions. The process is slow and frustrating, but not because you are a person who over thinks. This person is slow to react because he or she is so afraid of making the wrong decision and perhaps losing a few dollars or a member or two that they do everything they can to slow the process down and not make any decision at all.

This group is the one who is very slow to react to market conditions. I am currently working with two owners in this subgroup who has intense competition coming into their markets but just will not react fast enough to protect their businesses. Each owner is so afraid of making a decision that will hurt their business (fear of failure) that they just keep putting off the important things in their businesses to some point in the future. At this stage, each one of them should be painting, increasing their marketing, buying new equipment and reworking their price structures to anticipate what the new market will bring.

Always remember that no decision is a decision: you decided to do nothing. Doing nothing is occasionally the correct thing to do, but in the very fast pace of independently owned fitness businesses, doing nothing is the same as standing on the road with your eyes wide open in disbelief waiting for the car to run over your nonresponsive ass. The car is coming and you either react or you get crushed. Competition is coming for these two and the choices are the same; fight or wait until the auction to see how much you will get for your stuff when the club closes.

The top 20% of the owners live by a different creed. These owners manage by the constant pursuit of success. Each decision is made to either grow the business or project it into the future. All decisions are important and are made by constantly responding to trends, market conditions and your ever-changing club population.

For example, a club owner who only has a few hundred members but signs on with a third-party financial service company is an owner who is projecting her business forward and building a foundation for future growth. Instead of fearing loss of control, she seeks a business partner that can help her focus on growing the business instead of protecting pennies by having her mama do the memberships in the back office. One owner projects by hiring a third-party firm, such as ASF, and the other saves a few bucks by doing it herself. One manages by fear and the other anticipated success.

You can also get a clue if you might be one of these more aggressive owners, which includes anyone who practices business by the pursuit of success, by how you react to marketing in your area by your competitors. You practice fear of failure management if you wait and react to the competitor’s ads and offers but you practice pursuit of success if you market every single week year round forcing the competitors to react to you.

The types of long-term positioning strategies you make are also a reflection of the type of management you believe in for your business. For example, if you are a full service club with group exercise and you still let your old aerobics director manage your program (I might lose members if I let her go) then you are living the fear of failure nightmare.

On the other hand, if you use a national group exercise development company, such as Body Training Systems, then you are adding another layer of quality service to your business and setting your business up not to be held hostage by a single person, such as your current group director who threatens to leave you and take all the instructors unless you let her do exactly what she wants you to do.

In these two examples, one owner lives in fear something might be lost and the other makes decisions that are best for the business over time. Sure, you might make change and lose a few members but the pursuit of success manager understands that losing 10 now, along with the old aerobics’ diva, might lead to 200 new members in the future.

Perhaps the biggest difference between the two management styles is who innovates and who doesn’t in their business. Fear of failure clubs are always years behind in their offerings and business plan and make do with what they currently own or offer because they are afraid if they change all might be lost. These people are also usually extremists as well. “How many will I lose if she leaves?” Everyone! “What if I start to change my training program?” All the trainers will leave taking all my members.

Innovators, or pursuit of success people, are usually the ones offering what is new and relevant to the members. These are the people who adapt to EFT training rather than sticking to endless packages or sessions. These are the owners who are in Perform Better Summits or are at an Anthony Diluglio certification getting new ideas and equipment for their business before anyone else in the area does.

The failure thought is what will I lose if I change? The success thought is what will I gain if I do and how can I position my business for success during the next 10 years?

If you are a fear of failure manager you can change. Every time you make a decision and worry about what you will lose, simply add the other thought; what will I gain long-term if I do this. You will find that the long-term benefit often offsets the short-term pain.

On the road: We just finished Philadelphia and it was one of the largest workshops we have ever had with about 170 students at final count and another 30 or so alliance team members hanging around. This was also our first morning workout that topped over 100 people. My special thanks to Aaron Moser and the rest of the morning gang who managed to give that many people something exciting to take home. Next stop Orlando. I am teaching the new training and point-of-sale selling system and it has been nicely received.

We will even be more prepared by Orlando to put on a powerful show.

And a special thank you to Jill and our NFBA staff for the hard work to fill this event. Nicely done everyone and thank you for the amazing group.