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.

The Value Membership

Published on 02/24/09 08:46AM by Thomas Plummer

One idea that has been getting the most comments from our seminars during the last six months is the one about offering a value membership to your new potential members as well as offering it to your existing membership at the same time.

A value membership, using a term that is appropriate for the perception of today’s economy, is where you adjust your price structure to demonstrate that you are trying to accommodate the need for your members, and potential members, to get fitness at a lower price. I discussed this in an earlier blog but we can detail it here since I have been receiving a number of emails wanting more information.

For example, let’s say you now offer a $49 per month membership for 12 months. In today’s whacked out financial mess, many of your good members walk away from their memberships at the end of their term thinking they are going to save money. A member with four payments left of $49, for instance, might just quietly go away at the end of his term with the justification that his membership is a payment he doesn’t want to make for awhile. Keep in mind, in his head he didn’t quit the club, he is just taking a little time away until things change and he is planning on coming back.

Adding a vale membership is a way of keeping this member in the system and stabilizing your receivable base during perceived tough times. The value membership in this case would be adding an 18-month membership for $39 a month.

New prospects would be presented with an opportunity to sign up for the club’s regular membership, but if saving money is the key for him, then the club also has a value membership that is $120 per year cheaper. Look for about 70% of your new sales to go for the $39 month option because it is lower although for a longer term.

I also think you need to reach out to all existing members and offer them the same deal. Many owners balk at this idea at first for two reasons. First of all, they believe that lowering the price at point of sale hurts the image of the club and will lower their total receivables. The other issue is what happens if all my members trade their memberships down $10? What happens to my cash flow in this cash?

The first point actually reflects what is happening in the markets these days, and especially matches the way I feel memberships will be structured during the next 10 years. Most owners need to show a lower price at point of sale and then work very hard to drive their average monthly EFT up with additional services, such as EFT 12-month training, which is working very well around the country, and other profit areas including 12-week weight management programs.

If you are in a very competitive market, this strategy is especially important for you to consider. Many of our low price competitors have created a new market reality where the average price perception has dropped. Offering a value membership allows you to show a lower price in the market so you can still retain market share. If all you sell is memberships, however, lowering your price had better result in a much higher volume. Most clubs don’t see big increases in volume until they drop to $19 per month, which is not realistic for most full service facilities.

The compromise position is to offer a perceived lower price and then work on driving your average EFT number up for the month. For example, you might sell 50 memberships for the month showing a $39 per month value membership price at point of sale, but still have an average EFT monthly price of over $80 if you can convert about 20% of your new members into training EFT and weight management programs. In this case, you have the best of both competitive worlds. You show a lower price to attract new members, but your average EFT is higher because internal programming keeps your total average higher.

The second concern mentioned above also has a surprising twist. What would happen to me if all my members came in and converted their memberships to a lower price? Surprisingly, you would make more money during the next year.

Go back to the member who has four payments left of $49. He wants to save money and will quietly get lost when is membership is up. If this guy is offered a chance to save $120 per year voluntarily, and by trading the four remaining payments for a fresh 18-month membership, the club owner will actually make more money over time.

The key is that the lower price/longer term adds more money to the EFT compared to the guy paying just four more payments and leaving. It’s retention people, and if members have a chance to trade for a lower payment versus leaving the club, then the key phrase, as it always is in this industry, is whomever has the highest retention will win the club wars.

What does this mean in simple terms? Adding a value membership and then letting your existing members have access to it will actually increase your EFT over 12 months.

Go back to the guy with four payments one more time. He can go home and tell his spouse that he just saved the family $120 a year by renegotiating his fitness membership. He will stay, and he will pay longer, because he was in control, something most owners take away from the membership, which leads to higher losses in the retention area.

Implementing this is easy but there are a few keys points that will make it easier for you to get it done. First of all, send your members a letter before you start using value pricing in the club. No one is madder than a member who feels cheated by the people he trusted. The letter should say something like this:

Dear Members,

Thank you for all your suggestions. We are listening to our members, and to our guests, and we understand that for many of you staying at the club is important but you would still like to save money right now in your life.

Therefore, we will immediately offer a value membership on a temporary basis through the end of the summer. We will make a decision then if we need to continue value membership pricing beyond that point.

As you know, most of you are paying about $49 per month for a 12-month membership. Our new value membership will be offered at $39 per month for an 18-month term saving you $120 per year. Any existing member can simply stop by the desk during your next visit and rewrite your existing membership to a lower monthly fee with no questions asked.

And as always, we will honor whatever rate you have with us for any successive years you wish to be a member as long as you stay current or renew within 30 stays of expiration. This value option, therefore, gives all of our members a chance to lock in a lower rate for the duration of your membership.
Thank you for all your support through the years and please feel free to call or stop by if you would like more information about this new membership option.

The Club

The important term is “temporary”. This letter demonstrates that you understand that the people in your community may be having tough times and you care and wish to help with this offer. Keep in mind, if you are losing memberships to a competitor this option may help you stop the leakage by allowing the members to stay and save money. It is all a numbers game and your goal is to keep the most members you can for the longest period you can and this option helps get that done.

Something important to check out: If you have an interest in golf performance training, and live in a community that has a large golf population, look into the Titleist Performance Institute, created by Dr. Greg Rose and teaching professional Dave Phillips. They offer economical certification programs in three different tracks including trainers, med-based people and teaching professionals. This type of certification can add another dimension to your training programs, and more revenue over time.

Thank you to Body Training Systems. We just did a team webinar that was very successful. If you would like to listen, paste and insert this link into your browser.

                 http://www.bodytrainingsystems.com/pages/management/TP_Webinar/default.html

Why do you work so hard to get new members & then let them all go so easily?

Published on 02/15/09 03:43PM by Thomas Plummer

I have sat in a lot of clubs this year and it is disgusting how most owners and their staff people treat their customers. We want so much from these people yet we offer them so little. No wonder we lose so many members in our clubs; if the members wanted to be treated badly they would just have stayed at home with their spouses and teenagers.

Common courtesy, the heart of customer service, is dead in the fitness business. Members, who pay us anywhere from $9 a month to as much as $2500 per month in our training centers, can actually spend hours in the club and never even be acknowledged by anyone who works in the club. It is actually quite funny to watch the antics staff goes through to actually avoid the members, especially those not deemed the “good or beautiful members”.

If you’re leaking members to the competition, or just driving large numbers out on your own without any outside help, you can ease the outward flow if you just practice the most base levels of service in your club. Customer service is an art form that can be practiced at a high level of play, but to make a difference in most clubs art is less important than establishing a few basics that even your dumbest staff (still hiring those relatives and friends are we) can deliver.

Start with a little mental imagery. The club is your house and the members are guests that are invited on a regular basis to a party at your place. My house and my guests are much more important than my staff and remember, it is much easier to replace badly mannered and poorly dressed staff than it is to replace good members.

Ignore my guests, who are the ones paying for this party through their monthly dues and other fees by the way, and you won’t work here anymore. You will be kind to my guests. You will acknowledge my guests. You will be courteous to my guests in my house. If you don’t, you go and the guest will stay. As a guest in my house I promise at least these few kernels of common courtesy will happen each time you visit us:

I promise to greet you each time you visit my house as an honored friend and guest

“Hello, welcome to the club today. It’s good to see you”. Not “hey”. Not, “what’s up man?” Not “Whatssup?” Stop what you’re doing at the counter and greet our guests in our house. I don’t care if you have 50 members or 5000 and can’t even breath on a Monday night. Your guests, your house, and we always respect that relationship.

I promise to know your name

We will learn your name. We will use a computerized check-in system with your picture and name displayed prominently so we can cheat, but we will use your name. And we will find you on the floor and use your name. And our group exercise instructors and trainers will learn your name. Joe Millet, a name I have mentioned before in other writings, has a club with about 3500 members. During a club visit, he used a first name with every, single member we encountered throughout the entire day. Joe, along with his partner Mike, are some of the best club owners I have ever worked with, and who run several other fitness businesses too, but Joe still took the time to acknowledge the guests in his house that day.

I promise to show my thanks for your support

Every single member is thanked every single time they leave the house. “Thank you for coming in today. We appreciate your business”. It doesn’t have to be harder than this. Use these words exactly. Don’t use, “thanks man”. Don’t just nod and wave. Say thank you like you understand who really does pay for the bills in this house. If you have staff that can’t do this, or who find it embarrassing, fire those people and get new staff. The guests in this house are far more important than a few self-conscious staff idiots with social issues.

I promise to keep my house clean so your visit is a pleasant one

Your club is never as clean as you think it is. Get a cleaning staff that can get it done but keep the staff moving during their shifts. I don’t expect the staff to stay after work cleaning this place. We will get a professional crew, or simply a retired couple, to clean, but I do expect all staff to walk through the club throughout the day keeping the house clean for our guests. We will give equipment a quick wipe. We will pick up crap off the floor. We will take care of the locker rooms every 30 minutes. Our house is always clean because it is one of the main reasons our guests quit us for other clubs in the area.

Customer service really isn’t that hard. Say hello, know a name, say goodbye and keep your house clean. Visit a typical club and you see members walk by the check-in without an acknowledgment. Walk through almost any club and see litter on the floor. Watch a member leave and the staff is too busy to say thank you as he quietly walks past the desk and three staff people leaning on the counter.

Many club owners complain about competition, but most of you would be better off buying a big mirror and hang it on the wall across from your desk. Sit at your desk and look up. There, in the mirror, that is the rat bastard (skinny bitch?) that is crushing your business. If you want more money, and want to keep more members, remember that your members are guests in your house and not a number in a business that can easily be replaced if lost.

What I read this week: There was a great article by Martin Rooney, the resident genius for Bill Parisi, in Men’s Health, centered on some of the training he does with his athletes. Martin is a talented writer as well and has a best selling book on mixed martial arts fitness training. See Martin speak if you get a chance this year. His hands-on workshops at the Perform Better Summits are hugely popular.

An interesting side note: One of my friends just attended a mentorship at Alwyn and Rachel Cosgrove’s club in California. He said he was stunned to see their trainers working all of their clients out using the same training techniques that guys like Martin Rooney do with their athletes. He was especially amazed to see a woman in her 50’s doing dead lifts and one-legged squats. Probably one of the biggest mistakes we make in the business is that we believe serious people need serious training and mainstream people need to be locked into fixed equipment and use stupid little shinny weights. Alwyn and Martin have been training real people as athletes for years no matter what age or sex they are. Use the techniques that get results in athletes and you might get results from your other clients as well.

It's that time of the year & I am back on the road ...

Published on 02/13/09 02:22PM by Thomas Plummer

I recently visited an old friend and client, Todd Levine, from Rochester, New York. He is a really good owner when he feels like it, and an average one during golf season, but last year, despite all the negative images about the economy and what is happening financially in the world, Todd had a record year.
He operates a couple of Gold’s Gyms. His flagship club his about 25,000 square and represents a lot of forward thinking compared to many other owners in the industry, and especially in that franchise which often bases a new club on the amount of equipment it can hold. Todd’s isn’t a particularly beautiful club, but it is a very effective business, and I got a fresh perspective after spending a few days with Todd and his young business partner, George.

When I walked into the club on a Wednesday evening, Todd and George had over a 100 members working with a team of trainers doing group functional. It was sold as a weight loss challenge but the reality was that is was functional training in motion. The members were smiling, screaming and having fun all over the club and the energy was as good as it can get on a frigid night in Rochester.
The interesting thing to me as I sat and watched was that the trainers were stuck in holes all around the club. They were using the walkways, the group room, a small, dedicated functional area and just about any other space they could find that was open. The bobbed, weaved and leaped around all the traditional equipment that sat empty in the middle of the club.

This started a discussion about what is called money zones. Money zones are areas in the club that derive the most income over a year’s period of time. Todd calls them touch zones in his club. He recently has a couple of owners from another club visit him on a Saturday and he took them through his place at the peak Saturday morning traffic hour.

According to Todd, the group rooms were packed, the functional area was filled, and he admits that this area is currently weak in relationship to the rest of the place, and the free weight area was filled, the cardio was going and members and trainers were using all the rest of the space that was open.
The epiphany moment for the guests was the fact that the fixed equipment was deserted. As Todd described it, the club was running at a high capacity and it seemed that the members were actually working around the fixed equipment.

The working areas that were filled are called the touch zones. These are the areas of the club where members interact with each other and a staff person rather than being on their own just using the equipment. Group exercise is a touch zone because of the group dynamics. Group personal training is a touch zone because of the relationship with the trainer and the group. Even your front counter is a touch zone because that is where you have a chance to demonstrate customer service to every member as they enter and leave your business.

I call these money zones because touches equal member retention. Keep in mind that Todd was one of the original Gold’s Gyms in the country and he was showing me that his single joint fixed equipment had that lowest use of anything in his business. The money zones made his business and he credits his success on how well he and George get their members involved in anything besides just sitting on a piece of fixed stuff that is 30 years out of date.

As a result of this discussion, we redesigned his club during my visit. We eliminated about 15% of his fixed stuff, opened up designated areas in the club for functional space, ordered about $4000 worth of new functional tools, which represents a very large number of new toys for your trainers and members, and reset his membership to reflect group personal training.

The lesson to learn here is that during a flat year for many this guy had a record year, and he did it using a simple approach. His focus, and yours should be for this year, was on working toward maximizing your strengths. Most of you will find that you have these money zones in your club, and most of your clubs will have almost the exact same areas that are full as Todd does in his club.

During 2009, exploit your money zones and kill your black holes. If your members and trainers are working around your field of fixed equipment, get rid of some of it and open up some training space. If you don’t know what to do in that space, come see me in a seminar this year. We are showing clips and actually doing workouts illustrating what should happen in your businesses. And don’t forget that the Perform Better Summits are just beginning for the year and you can experience some of the magic there that you need to take back to your club.

We have come to think over the years of the equipment in the club as our product, and we were wrong. Your staff, the energy in the club and your ability to touch people each day is what people want and is what we should sell. We have become lazy and just buy more and more equipment thinking that our purchases represents service. It doesn’t and the member knows that, which is why you lose so many members to fresh competitors. If all you sell is the right to use a giant field of outdated crap, then you deserve to lose your members to a guy with a bigger and better field of crap. If you don’t relate and service your members, then they have no reason to stay with you since it is all about the equipment and not the relationship

People involved in relationships don’t leave your business. People who are touched stay longer and pay longer, something Todd and his team proved during a tough year. And keep in mind; he did it in Rochester, which is not exactly the club capital of the world.

2009, The Year of the Money Zone

I like it, and I hope you spend the year building your zones and killing those nasty black holes.

What I am reading now: Beyond Bullet Points, by Cliff Atkinson. This is a good book if you have to do any type of presentations in your business. My friend Ernst from Austria recommended it and it is a good read for someone who has to sway an opinion or keep people entertained for a few hours.

We have changed the format of our seminars for 2009. The entire first day is dedicated to changing the culture of your club into a functional driven business and then how to support this change through stronger point-of-sale memberships. We have gotten solid feedback on shifting training to EFT based over 12 months and on the 30-day membership for $19. If you haven’t been in awhile, we have a lot new to share with you. We are also only doing two sales gigs this year, which will be based on doing more sales at point-of-sale. We are using a new price structure for those as well based upon training more of your people more cheaply. This year’s price will be just $89 per person for the entire two-day seminar with a lot of customer service too.

The Next Big Breakthrough will not be in Equipment, it will be Nutrition

Published on 02/04/09 10:33AM by Thomas Plummer

One of the funniest things in this industry is to go to a major tradeshow and see some company proudly flaunting their newest line of fixed equipment, which is really another redo of 1969 Nautilus. We need a lot of things in this industry, but we don’t need another startup company basing their entire investment on a line of equipment that was out of date 20 years prior to the show.

There have been breakthroughs in equipment. Functional equipment, such as Human Sport by Star Trac, FreeMotion, and Kinesis by Technogym, are progressions on the evolutionary scale representing thought at the next level, and you will see many more club owners convert completely to a functional culture during the next five years. Costs go down for the owner and the member actually gets results leading to morepeople staying longer and paying longer. It’s progress but not the total solution.

Perhaps the questions I get asked the most often by reporters, or club owners bored out of their minds, is what is going to be the next big thing in this industry? In my opinion, the next big breakthrough won’t be equipment driven. The next big breakthrough that will drive us from 41 million members (IHRSA numbers) currently in clubs in this country to 80 million and beyond will be the development of a nutrition component that individualizes the process for our members and can be sold and serviced at the club level.

We have gone about as far as we can on the fitness trail. Pioneers are still out there and people like Gray Cook, Bill Parisi, Mike Boyle, Alwyn and Rachel Cosgrove, Anthony Diluglio, and some of the other great minds in our industry, will continue to take us to a higher level of results-driven fitness that is possible to deliver on a broad scale in commercial fitness settings.

But even this steadily increasing knowledge is just a step along the evolutionary trail. In our world, more efficient ways to train people is much like the first functional machines. These machines took us further along, but you can still turn around and see where we came from last week. It’s a step, not a leap.

Nutritional knowledge that isn’t controversial, that can be individualized and that can be scaled to the typical club will be the key that drives revenue in the fitness industry during the next decade. Nutritional support is where we have failed the consumer and this lack of support and guidance is the block to long-term sustainable growth in the fitness business. Provide a solution the millions of fat people tired of their bodies and the client will find us instead of us begging for more members.

In other words, we may get from 41 million members to 45 million members in the next few years by just maintaining our current percentage as the population continues to expand in this country. But if we want to get big numbers, and the even bigger revenues, by doubling our current penetration rate in our national population, we must finally bring to market a way to drive weight loss consistently for the average person.
Fitness sucks. It is hard, no fun, repetitious, boring, endless, frustrating, time consuming, mind numbing, ego driven (in the mind of someone who doesn’t yet do fitness but who is contemplating it) and why should I even do fitness when all I want to really do is lose 15 pounds and finally get laid this weekend.

Weight loss sells, and yet we don’t sell it in commercial clubs in any scale at all. Over 60% of the population is overweight and obese, yet we still don’t sell weight management in the clubs. Many of our club owners are overweight, not because they don’t work out, but because they are confused as the consumer on what constitutes efficient nutrition.

The biggest pioneer in nutrition in this industry, and one who should be remembered as one of the four or five most influential people in the history of the fitness industry, Neal Spruce, was right 20 years ago when he first introduced a basic metabolic typing diet into mainstream fitness, but we still only practice nutrition at a very basic level in our industry and in very few clubs as a national percentage.

Most of us believe that the equation for getting in shape is about 15% of what you do and about 85% of what you eat. We have reached 41 million members by selling a solution for the smallest percentage of the equation. Just think what is possible if we finally sold the entire package.

There is a first generation of new super heroes practicing nutrition at the club level. Guys like Robert Yang, Dr. Mark Smith and John Berardi are years ahead of what the typical club offers. Paul Chek was years ahead of his time in the application of nutrition at the fitness consumer level. And Neal Spruce is still creating new tools through his new company to provide a solution. It’s coming, and we will get there, but there will never be 80 million fitness members until we can make big asses smaller and get paid well for the process.

Fitness Matters

Published on 01/31/09 04:52PM by Thomas Plummer

What we do matters. Helping people find a better quality of life makes a difference.

Why discuss these things? Because when times get a little tough and we all get a little frustrated with our businesses, we start dwelling on the negative aspects of the fitness business, such as how much we hate the pain-in-the-ass members, the never ending parade of stupid employees and the constant struggle to grow a business we once cared deeply about.

Many owners got into fitness for a very simple, almost embarrassing to actually say, idea. Most of us started on this path because we wanted to somehow make a difference. It’s soft. It’s not easy party talk, but for most of us, we chose fitness because improving people seems like a noble way of making a living.
Having the ability, willingness and talent to help people lead better lives through fitness should be accepted as a humbling gift for those who have possess these rare talents. In our world today, it seems far more people lead lives of destruction or irrelevance instead of exploiting the ability to change the world they live in. You chose in life but most chose the easy path that seldom leads to any long-term benefit to anyone, including the person who made the decision.

We see people like Bill Gates, who literally donates billions of dollars a year through his foundation to change everything he sees needs fixing, from the ability of a poor child to gain access to education through computers, to fighting horrible diseases that cause the death of millions of people somewhere in the world. Because of the scale at which he operates, we believe that what he, and other like-minded good souls do is something beyond our grasp. But it isn’t.

Changing one single person who, through your patience as a trainer or dedication as an owner, leads a quietly better life because they are healthier, more productive and happier, impacts the world around you just as deeply as a gift of a million dollars to a worthy cause. In some ways, this change might be viewed as more important because if happened in your world, in your community and in your club. You did it, and you did it yourself.

It is easy to hate this business because of the constant need for customer service and new customers. It is also easy to become the walking dead who does nothing but spend all of his hours trying desperately to avoid going into his own business. When money is hard and the world around you seems like it’s collapsing, it also becomes overwhelming to think that we actually have to fight so hard to keep doing what we do. Why not just sell it, close it or get out of it and get on with a life that is less stressful?

Because then what would you do? Would you then become one of the millions of people who work for the money but don’t contribute anything to their world or local community? Would you become a person trapped in job that requires nothing more than moving paper around an office or a number on a screen, needed work perhaps but seldom satisfying in world changing view?

The fitness world gives you both: the chance to make a lot of money if you learn to finish things and run a good business and the chance to change lives.

We change lives. We as an industry change a lot of lives. You as a local owner can change your community and the people who trust you with the care of their not-so-perfect bodies, every single day you are in business.

Sit somewhere quietly and find that reason that inspired you to start your business or dedicate your life to fitness. That reason, and your belief that you can make a difference, should give you a motivation to get up in the morning and go to work. Find your reason to live up to your talent and passion. What you do is important, even if I am the only one reminding you.

Report from Charlotte: We just finished our first seminar of the year. Good owners are still making money and ineffective owners are still looking for answers. This was the largest seminar we have ever had in this market and perhaps the best collection of owners and staff we have ever had in that area.

Special note: You have four good months in front of you. Work it harder than you have ever worked in your life and you will make money this spring. The clients are there but service, marketing and sales are more important than ever. Remember, good owners can still not be successful because the tools they use don’t work. Drop by a seminar and let’s discuss more efficient ways to make money this year.

Signs it might be Time for you to Get Out and Get a Real Job!

Published on 01/21/09 01:32PM by Thomas Plummer

One of the negative parts about being a consultant is that the more experience you get the easier it is to smell death.

I think it might happen when you get to visit maybe 500 clubs or so and realize that there just aren’t that many creative ways to build a club, or anything really particularly new or innovating, out there in the fitness world. Every once in awhile I get shocked and see something fresh and effective, but mostly it’s the same things done over and over again. Fields of equipment, cardio too close together, locker rooms that are never quite finished and colors picked out by blind, old Republicans (conservative to the extreme with white, beige or the occasional ugly yellow, red or cheap plastic blue).

At some point, however, you stop seeing the physical plants for what they are and you start looking for the signs that the business is making money. It gets so weird that you eventually get to the point where you can actually tell how much the club is generating and how many members it has. Businesses that are successful have a definite look that is easy to see when you get used to what you’re looking for in the club.

The painful thing is that you can’t hide failure. Failure stinks and all the paint and equipment in the world won’t cover the smell of a business that is failing and an owner that is scared and who has given up. It’s a lot like really obese people or heavy smokers who won’t change; they are already dead but they just won’t lie down. They quit trying and become passive passengers in life, unable to enjoy the finer moments of a long walk, ski vacation, sex or anything else that might interfere with a destructive lifestyle.

Can you come back from the dead? It’s possible, but it takes some type of life altering circumstance to force change. In fact, if you notice, few people make any major change in their life unless they are forced to by circumstances outside of their control. The drunk quits when he ends up wrecked at the bottom. The overweight person only loses weight when his wife leaves him for someone who is willing to walk on the beach instead of sitting in front of the idiot screen. And the failed businessperson will only learn business skills after he has lost one business already and is now finally open to the thought that he doesn’t know everything.

Here are a few signs I’ve seen in the last year in clients who are near the end of their careers, whether they want to be or not. If you see yourself in here, remember that self-awareness is the first step toward changing a behavior that is killing you or your business:

• You don’t market: You have every excuse, from too expensive to it doesn’t work in my market, but there is nothing more important than chasing new leads. If you’re not marketing every week, every year, and if marketing is not your full-time job, you are failing and don’t even know it. Marketing is not a person or a department; it is your purpose in life if you own a small business. Any business, anywhere, can do some type of marketing each week no matter how broke you are. Stop whining and do some door hangers if nothing else.

• Your lack of success is some else’s fault: The economy, your competition, the new guy your wife is dating or any other excuse is just that, an excuse to fail. It’s your life and it’s your fault if it turns out like poodle crap.

• You go home at 5:00: This one is a major indicator of a club on the way down. If you own one club, you have to be there working where people can see you, such as selling memberships or working with your counter staff, when the majority of the members are in the club. Tony DeLeede, perhaps one of the most talented club owners in modern club history, would often just drop into a club and teach a class that night to get a feel of what was going on, and he had 25 clubs at the time. The 5:00 owners are the ones who believe that being busy means something. It does. It means you’re busy. But it does not mean you’re effective. Busy is busy but it isn’t always effective. Is what you’re doing now, at this moment, making money for your business. If not, don’t do it. Only do the things that make your business grow.

• You’re training clients: Training clients is the least effective thing you can do in your business, even if you own a personal training business. Sell memberships, speak to business groups, teach a group exercise class once a week or so (touch bigger numbers) or hand out flyers. All of these money-producing things are more important in your business, and more effective at generating money, then training a member one-on-one. No, you can’t keep that favorite member you love to train three mornings a week because then you want to go home early because you feel you’ve been there all day.

• You own a club, or a small chain, and you haven’t sold a membership yourself in months: You have to sell memberships to stay in touch with your potential clients. The look on their face when you show them around, the questions they raise about your business offerings or the concerns they express about your competition are things you need to hear personally to keep in the game. Name anything you do, or think you do; that is more important than generating new income for your business? And you can’t teach it if you don’t know how to do it.

• You don’t know your numbers: How many tours last month? What is the closing percentage for your team and for each individual salesperson? How many check-ins do you average on a Monday? It’s the 15th of the month, how much do you need to average per day for the rest of the month to be profitable for that month? If you don’t know your numbers, you are not involved in your business and you will die a painful and ugly business death.

• You micro-manage: You don’t train people well, and don’t have systems in place, both of which take work, so you just hang around the club irritating the staff and getting in the way. Micromanaging is often a sign that you are a situational manager, meaning nothing is written down and you just make stuff up as you go along driving your good staff away and making the dummies who stay worthless. Involved owners build systems and teach from those systems. They have procedure manuals, training courses, customer service and sales training and everything else a small business needs to be healthy. If you don’t have systems, you are simply making up nonsense as you go along.

Chose life. Learn new ideas. Challenge yourself. Come to a seminar if for no other reason to have some yell at you and get you moving. Change is painful but life on the other side is worth it.

What I am reading this week: I just bought, "People Are Idiots And I Can Prove It", by Larry Winget. I buy all his stuff and laugh my way through it. Give your staff his book, “It’s Called Work For A Reason” to get them thinking about how they work and why (hint: we carry and sell this one).

Final thought of the day: It doesn’t matter whose side you are on. President Obama is the elected choice and we need this guy to get it done. Do something this week to make a difference. Buy a car, buy cheap stock, or get a house at half off. We’re coming back but do something to help besides whining because your guy didn’t win.

Upcoming Charlotte Workshop

Published on 01/19/09 05:09PM by Plummer's Peeps

We are all preparing for the upcoming Charlotte, NC workshop that is happening next Wednesday and Thursday! Lots of new owners and old friends are going to be attending. The 2009 NFBA program is great and we are really excited to present it.

The 2009 year is going to be exciting!

Why do you think it is so hard to Make Money in the Fitness Business?

Published on 01/17/09 01:26PM by Thomas Plummer

No concept in the fitness business is deader than opening a new club with a giant room full of fixed equipment. The more is better concept is dead and the more educated member has a totally different expectation about he or she wants from their fitness center, even the deconditioned members who watch the women’s shows and read the chick magazines.

Why do think it is so hard to make money in this business? Consider the fact the product we are selling isn’t what the member wants. They read the magazines, get pumped for a new workout and body, and the local fitness center then straps the person into a time machine (read single joint fixed equipment here, such as ab piece, adductor/abductor or the classic leg extension) and takes the person back to the 80’s. The client expects cool moves like television shows and internet workouts but ends up sitting on their ass wondering why this workout doesn’t match what everything they just read.

The member, or potential member, is here because he just picked up Men’s Health, the new source for the consumer by the way, reads about a workout involving plyo boxes, kettle bells, sand bags and other exciting toys and heads to the local club to get signed up. But 30 minutes into the tour, he realizes that the club doesn’t have any of this stuff, or if it does it’s a very poor selection stuck in a corner. My favorite is the club that has the traditional one rack of med balls that tops out at 12 pounds mostly covered in duct tape.

This guy will not join because you don’t have what he wants. You might have an acre of equipment with two of everything or more but fixed equipment only sells memberships to a very limited group, mostly the gym rats that typically comprise about eight percent of a club’s membership. That is how we used to do it. Big rooms, covered in equipment and we bragged that we had more than the other guy (big surprise here, a guy bragging that he has more, is bigger than the other guy, or does it better).

Watch the trainers in a good club and you’ll see that the business has evolved. I was standing in a club that was about 20,000 square feet this month and there were six trainers in action. Every trainer was working with their clients in a corner or any open space they could find using bands, dumb bells, a few old medicine balls and whatever else they could scrounge. One trainer had a huge nylon bag he brought himself stuffed with his own toys for his clients. Take a hint here you club owners. What kind of message does that send to the clients when the trainer owns better stuff than the club does?

The fascinating part was that the trainers were completely avoiding the club’s fixed equipment. Not one trainer in an hour put a single client on a piece of fixed equipment. The club did have some functional equipment (Human Sport by Star Trac and a FreeMotion piece) that the trainers worked into their workouts but the regular fixed was ignored.

Visit any of the gurus in training, such as Mike Boyle (www.Bodybyboyle.com), and you’ll see every client, no matter what age, up and moving on the floor, throwing balls against a wall and doing agility work on the floor. And this is not restricted to just performance clients. Even the personal training clients do the same things the athletes do. Get results and you stay longer and pay longer, the new mantra for member retention.

People want results from their workouts. They don’t want to keep going around a circle because the club has taken the easy way out, which is to become equipment dependent. Why learn how to train clients and build a system when it is so much easier to just let the equipment babysit the members? We need to change because the members have had enough of no results for $49 per month and want more from their club then being ignored.

The sad thing is that a club can cure this cheaply. About $4000 will give provide a complete trainer’s toy fantasy including full sets of kettle bells, and if you throw in your first functional equipment, you’re in for not much more compared to trying to throw six different leg machines at the members. Functional equipment is cheap and is a great investment because you can do so much per piece compared to a simple chest press limited to one exercise.

Members also want expertise and leadership, something a club that is equipment centric seldom provides. Trainers become rep counters and ruined in a equipment driven club because they are taught to let the equipment do the work. A perfect example here is the “three workouts with a trainer and then you are on your own” approach to fitness. If this is how your club works I can guarantee you have a lot of retention losses and it simply gets harder every year to replace the members you lose due to neglect.
The trainers and the workouts in the three and you’re done environment suck because they know in five minutes if that person will buy personal training packages. If the new members aren’t going to buy, how good do you think that workout is going to be? Teach them a circuit, get them out of the way, and they will be quickly forgotten by the club ultimately ending up as a retention failure is a few months.

There is a new generation of owners coming into the field, such as a young friend named JC Chlubna in California, that knows the difference between 1980’s training and effective workouts, yet his club didn’t match his personal philosophy. He does his own workouts powered by functional methods, yet his club is filled full of fixed stuff. It’s hard businesswise for him to change because many of his members still are doing old body part splits and other Arnold era training methods but if you don’t change your business won’t grow and you become less competitive in the market each year.

The hard part is can you educate these members and keep them and still change the culture in the club and attract a newer breed of member. The key here is to remember that our clients read the magazines, watch movies such as The 300, and are more current on what’s happening in training than most of our club owners.

If you want to make money, which is what this blog is really about, then toss a lot of your fixed stuff and start building a club culture based upon functional, results driven training. And yes, you will probably have to fire a whole bunch of your out-of-date trainers and send them off to Jurassic Park with the other dinosaurs but evolve or die in nature as in small business.

What I am reading this week: Skinny Bitch, perhaps the worst alleged fitness book ever written. A friend recommended it, or he is a friend at least for now. Don’t read it, buy it or let your client’s near it. I consider this one of the worst books I have ever read, and I have read pure garbage more than once.

It's Time to Stop Blaming the Economy and Get Your Ass Moving Today!

Published on 01/13/09 10:33AM by Thomas Plummer

Most owners are so busy being busy that they fail to do the things that make money in the business. If you are not making the money you want from your business, step away from the endless action and make sure you are doing what is important in your business. Here is a short list, meaning you concentrate on a limited number of things to do to make a difference.

These are also the things you should be doing if you think the economy is hurting your business, although when I consult, I usually find that the club owner is hurting his own business far worse than outside influences by failure to execute the basic skills in the business.

This edition also will answer an email I received from Pitaron Health Club Consulting in Israel. Avi, Asaf and Sharon asked if I could give them some solutions for clubs in hard times. Here are the things you should be doing right now in your business:

Run a 30-day trial for $19: You need to get as many people into the system as possible at the lowest risk factor (we call this a risk free trial membership) for the potential client. This version of the trial membership is more powerful than a traditional trial, such as 14 days free, and attracts a different clientele. Your goal with this tool is to fill your own club with potential members while keeping as many prospects as possible away from your competitors. This trial also works quite well if you are in a market competing against low price/value competitors. Run this until the end of May and make sure you put a strong call to action on each piece (offer expires two weeks from the date of delivery).

Train your staff on sales: Train everyone, including the childcare people and janitors, in basic sales. Train everyday in sales with your team. If you have lousy sales people, sell all memberships yourself through the end of May. Get sales help, coaching, tools (we offer all of these through the NFBA) and be ready to do business. Your target conversion rate has to be at least 60% of all qualified leads convert into some type of annual membership over 30 days. The national average is about 35-38%, which means your competitor isn’t hurting you, you just can’t do business and deserved to get smacked down because you can’t execute one of the most basic skills of any small business, which is the ability to convert potential business into real business.

Offer a value membership: Acknowledge that times are time and offer a value membership. For example, let’s say that you currently offer a $49 a month membership for 14 months using a membership contract. Send a letter to all your members stating that you realize times are tough and that the economy is affecting their lives so you are going to respond to this by offering temporarily a value membership of $39 for 18 months. This is open to all existing members. And no, if they all sign up your monthly EFT draft will not go down. In fact, it will go up. What most owners fail to consider is that if someone has a money issue and has four payments left on his membership of $49, when he gets to the end of the membership he will walk away. If he has a chance, however, to resign for a fresh 18 months for only $39 he might stay. The increase retention rate will offset the lower payment and in fact should far exceed what you are collecting now. In other words, you should make more money from fewer people because members you would have lost will stay at the lower rate. The letter is important because it shows you are feeling their pain and reacting to it and keep is on a temporary basis until at least the end of May. If it works well, keep it going, but if you don’t like it you at least stabilize your business and increase retention.

These three things should have an immediate affect on your business. If you’re scared and nervous, stop watching television and stop reading the newspapers and go to work. You cannot change the past and if you think deeply about it, very few of your fears of the future ever really turn out to be as bad as you anticipate. Sure the housing market is flat, but what a wonderful time to buy a house as a great discount, and there is money out there but it is loaned on more traditional terms instead of crazy deals. Sure the stock market is down, but now is the time to get in and buy deals rather than getting out and following the terrified herd.

When times seem tough in the fitness business, attack hard with trial marketing and member retention. Your competition is sitting under their desks crying too chugging on that bottle of cheap whiskey. Now is the time to go hard in the market and buy market share from other owners who sit waiting for things to change. Things only change if you are willing to change them, and now is the time to seek change in your market.

What I am reading this week: I am rereading Paul Chek's book, "How to Eat, Move and Be Healthy". It's been around for a while and is still an interesting read.

Things to Check Out: Alwyn Cosgrove's website (www.alwyncosgrove.com) and the Art of Strength website (www.artofstrength.com). Both of these website will show you the future of the fitness industry. If you haven't been to a Perfom Better Summit - You need too! Check out more details at www.performbetter.com  

Is the economy affecting your business?

Published on 01/07/09 04:55PM by Thomas Plummer

I’ve tried to avoid this, and avoid this and avoid this yet some more but here it is, the first Plummer blog. I saw blogging coming, and refused to get involved. I saw blogs become great Internet tools to change thought and get information to masses of people and still didn’t want to do it. And now, even though blogs are fading for the truly avant-garde in tech, here I am launching my first online attempt at spreading the word.

The main reason I haven’t written a blog earlier is that most of what I have to say about the business of fitness was being said in the seminars or through my books and I haven’t felt the need to try to get much more information out than that. Then two important changes happened that made me want to rethink the need to get information out more frequently.

First of all, what is happening in the economy has accelerated the need to get ideas and information out more quickly to our friends and clients. Secondly, the volume of emails I am receiving has dramatically increased over the last year with more people seeking not only information about their particular business but seeking my thoughts on major issues in the world of fitness. The volume simply increased to the point that I could not answer each one individually as I have done in past years.

I want to start this new adventure with an important thought; the fitness world is not ending by death due to bad economy. Stop listening to anyone telling you that you will fail due to economy. You might fail because you can’t sell. You might fail because your brother-in-law is a dog poop trainer and you should have never hired him anyway. You might fail because you never learned any of the most basic concepts of business and are still unwilling to learn. And you might fail because you already think you know everything because you have been in business for a long time. Remember, you might be one of those people with one year of experience repeated 20 times without every learning anything new.

Good owners made money in 2008 and weak owners, defined as those unable or unwilling to practice good business, did hurt and many failed, mostly those in the fringe sectors including the circuit clubs and other marginal players. These owners should not have been in business and most should have never purchased a franchise in the first place. Bad business people are bad business people no matter what the franchise brochure says.

People failed in the fringe sectors using tools that were 40 years out of date and that couldn’t have made money in the strongest economy we’ve ever had in this country. A lousy business concept is still a lousy business concept and you can blame it on the economy if you want but if you’re a horrible business person, using a business system dating back to the 70’s, you’re going to get your ass kicked no matter what is happening in the business world.

Simply put, there is no magic system in this business to make money; you either learn and master the basics of good small business, such as marketing, sales and branding, or you fail, especially when things tighten. Tough economies, along with increasing competition, validate an owner’s talent or validate that he is lucky to have no competitors. Economy and competition prove if you really do know how to run a business.

When it gets tough and crowded in your market, the ones who are willing to grow and practice good business make it and the rest will fail. Tough markets and nasty competition is sort of like the process of natural selection where the dumbest animals die first so they don’t breed and ruin the chances of the herd surviving. In 2008, the herd was culled somewhat but so what, it’s the natural selection process at work.

This year will be a solid year for owners who are willing to be aggressive and who are willing to stop complaining and start working their asses off to get business into the clubs. One important point to think about, which will be something I will write about soon, is that even good owners sometimes fail because the traditional business model in the fitness industry simply doesn’t work anymore. You can be talented, and decent in business, and still fail because the tools you are using are not effective. I receive a lot of emails from owners expressing this frustration and if you want to survive, you will have to change how you do business in the next five years.

Send your emails to this address: info@thomasplummer.net. I can’t answer them all individually, although I may try depending on how boring the plane flights are, but I will answer some of the broader based letters in the blogs.

What I am reading: Most people who have spent any time in our workshops or with me personally know I like books and encourage all owners to knock down at least one per week. One of the most often asked questions in the email are what am I reading this week. I will throw this in at the end of each posting and a few comments about why I like or hate this book.

This week, I just finished, Metabolic Man, Ten Thousand Years from Eden, by Charles Wharton. I like pulling strings and a nutrition guy I respect named Robert Yang got me thinking about metabolic typing. This led to a book by Wolcott, which lead to a book by another guy, which led to this one. Neal Spruce, the first person to ever apply metabolic testing to the mainstream fitness industry, and founder of the three most well known nutrition companies in the industry, is cited in the book for some of his early research proving yet again he was ahead of his time. A good read for all owners and especially good for trainer types.