The Sales and Service Opportunity

The purpose of business is not to make money. The purpose of business is to get and keep customers.

Ted Levitt The Marketing Imagination

ob Dedman, the Founder and Chairman of Club Corporation of America, is the most success- ful leader in the worldwide club industry. With 1997 sales exceeding $840 million, and profits of more than $121 million, CCA's 170 facilities are the most successful club management enterprise ever developed. Not surprisingly, Dedman, a billionaire, is listed annually in Forbes magazine as one of the 400 wealthiest people in the world. In the past two decades, Dedman has given over $75 million dollars to Texas hospitals and universities.

It is of no minor significance that Dedman's business card lists him not as chairman, founder, or president of the company he leads, but simply as "Robert J. Dedman, Sales Representative, Club Corporation of America." For Dedman believes that the club business, from first to last, is a sales business. It is a business centered in retail sales. Like Nordstrom's, Walmart, and the Gap, fitness clubs are stores whose success depends upon mastering every dimension of the process that makes customers aware of the store, leads them through its doors, causes them to purchase, and induces them to return.

If you ask industry veterans such as Tony DeLeede of Australian BodyWorks or David Patchell Evans of The Good Life Clubs what will be the most important factor in club success over the next 10 years, they'll answer sales and service, every time. As DeLeede puts it, "The market is there. The only question is, how much of it will we get?" Mastering the retail function of the health club business is not a single task or even one task among many others. It is the heart and soul of the business. It is no coincidence, then, that the most common mission statement of health club companies the world over turns on a single theme: i.e., that "everybody's No.1 job is getting and keeping members."

THE SALES OPPORTUNITY

What does the sales opportunity really involve? To begin with, it involves realizing that the "rules of retail" apply as powerfully to the club business as they do to every other retail enterprise. It means that "presentation" is everything. Visibility is everything. Accessibility is everything. Keeping contem- poraneous is everything. It means that club gyms can no longer look, or feel, like junior high school auditoriums. It means that for clubs, as for every other retail business, color is crucial, light is crucial, ambiance is crucial, hospitality is crucial, placement is crucial, sightlines are crucial. The energy that a site emits is crucial. All this, and much more, are as crucial to club retail success as they are to that of the Gap, The Limited, or Abercrombie and Fitch.

The purchase of a club membership, like the purchase of a sweater, vacation cruise, or theatre ticket, is fundamentally emotional. As such, the entire sales experience needs to support and strengthen the motivations that brought the customer into the club in the first place. In 1998, IHRSA developed a sales-training video tape titled "Super-Objective Selling." The theme of that video is that the sale does not really begin until the salesperson taps into that fundamental emotion, the so-called "super- objective" that brought the customer through the door. Once discovered, knowledge of the super-objective virtually guarantees the success of the sale.

There is much more that can be done to build the industry's sales capabilities than has ever been done to date. The performance of industry sales leaders, both individuals and teams, can be tracked and benchmarked. The world's leading experts on retail sales and on personal selling can be brought to the table to have their wisdom distilled and applied. The following action list constitutes a starting point for looking at every aspect of the sales process that drives the fitness industry:

·Programs and processes that generate referrals-the lifeblood of every successful sales organization-can be analyzed and replicated.

·Telephone sales skills can be communicated and mastered.

· Effective sales software systems and sales compensation systems can be promoted.

·Cross-training sales initiatives that build program and peripheral sales, including personal training, pro shop, juice bar, and spa services, can be studied and replicated.

·Successful promotions can be tracked.

· Industry-specific sales training universities can be launched, and the industry's most effective advertising campaigns can be analyzed.

· The lessons learned in other non-club retail businesses can be carefully and thoughtfully adapted.

All of these steps are but the beginning of what can be done to elevate and strengthen the entire industry's sales capabilities.

THE SERVICE OPPORTUNITY

In November, 1998, IHRSA published the results of a nine-month research project called "Why People Quit." It involved over 10,000 former club members from every part of the country. The purpose of this Vanguard research, sponsored by FitLinxx, was to identify the "controllable" factors underlying membership attrition and to develop actionable strategies that would increase participation and retention.

The results of this survey suggest that approximately 50% of those that leave their club do so for reasons over which the club has little or no control. These reasons include: relocation, divorce, separation, illness, injury, medical condition, loss of job, loss of income, family crisis, etc. The other 50% leave their clubs for reasons that pertain directly to member service. These reasons fall into two categories: club-related and member-related.

The club-related reasons pertain to specific complaints that individuals articulate about their club experience. These complaints include: overcrowded facilities (27%), dissatisfaction with staff (13%), dissatisfaction with programs and activities (8%), inaccessible and unresponsive management (6%), unclean facilities (6%), and rundown, obsolete or outdated equipment (5%)

The member-related reasons point to a different kind of failure. They pertain more to what didn't happen than to any specific complaint about the club. They pertain to a failure to connect, engage, personalize, energize, and motivate the member. When these members state why they left their club, the answers that they gave were: "I didn't make sufficient use of the membership" (43%); "I lost interest and motivation" (17%); "I never felt completely comfortable"; (11%); "I didn't like the over- all club atmosphere" (11%); "I never achieved my fitness goals" (8%) (Figure 16.2).

Fifty percent of these members said that at the time when they left their club, they had formed "no rela- tionship" with anyone on the club's staff. When asked specific questions about their club experience, the percentages of former members that agreed strongly with the following statements were as follows:

· I was impressed with the professionalism of the staff. Only 24%

· The staff took a personal interest in me. Only 21%

· I felt a sense of "belonging" at the club. Only 15%

· I was pleased with the club's responsiveness to my particular needs. Only 14%

· The staff helped me achieve my fitness goals. Only 13%

MEETING THE SALES AND SERVICE CHALLENGE

This research suggests that the industry's member service challenge is two-fold: First, it involves eliminating such negatives as overcrowdedness, uncleanliness, obsolete facilities, mediocre programs, and unfriendly staff. The second involves an industry-wide campaign to deploy customer service systems that provide every member with a more personal, enjoyable, and productive service experience. Of the two, the second is the more demanding and compelling challenge. However, research conducted for IHRSA by Dr. Christine Brooks of the University of Michigan's Fitness Research Center shows that the industry must make the greatest possible effort to meet this challenge.

IHRSA asked Brooks to identify factors that kept people away from clubs. Using data from more than 500 interviews with people who were averse even to stepping inside of a facility, she identified five fears that keep people away from health clubs.

These five fears are:

1. The fear of feeling stupid. These people don't know how a club works, nor do they have the slightest idea of how fitness equipment works. Not wanting to look or feel stupid, they steer clear of fitness facilities.

2. The fear of feeling isolated. When people here the word "club," they feel the word "connection." They imagine that the members know the staff and know one another. Not wanting to feel alone and isolated, they avoid the "club" experience.

3. The fear of looking and feeling like a klutz. Many people have had bad experiences with sports and fitness. They have never felt confident or competent doing them. These people do not want to enter an arena where they feel they will stand out as uncoordinated and unathletic.

4. The fear of "physique anxiety." Many people are embarrassed about their bodies. They avoid any arena where their physique could be more visible. They are even more uncomfortable in an arena in which they imagine that everyone else is in perfect shape.

5. The fear of being "forced" to join. Many people have heard stories about clubs that specialize in "high-pressure" sales tactics. They have also heard stories about clubs that are "only interested in their money." These fears prevent many people from even considering a health club experience.

These common barriers to initiating a club experience make the member service imperative even more crucial to the future of the health club industry. With respect to achieving this more demanding objec- tive, IHRSA research also highlights the importance of three factors:

· The Power of First Impressions. Positive first impressions correlate strongly with overall member satisfaction. Major factors involved in creating such impressions are: the overall quality of the facility (45%), the quality of the introductory orientation (37%), the professionalism and personal involvement of the staff (24%), the ability to see results from the initial series of work- outs (19%), and a feeling of "belonging" or to "fitting-in" the club (Figure 16.3).

Feeling of "belonging" or "fitting-in" to club 15%

· The Power of Personal Involvement. Personal attention pays huge dividends with respect to overall club satisfaction. Of those who give their club the highest possible satisfaction ratings, 84% state that the "staff take a personal interest in me." Even those who left a club were four times as likely to rejoin that same club if they thought positively about staff as were those who had neutral, or negative, feelings about staff.

· The Power of Positive Results. Often taken for granted, members want to feel and see results as an outcome of their involvement with a club. Of those who experienced such improvements, 88% gave their club the highest possible satisfaction rating. Such results validate the value of the membership. There is an important lesson for the industry: In many members' eyes, customer service is not simply about being friendly or involved; it is about helping members get results

Helping members set realistic, short-term objectives is proving key to allowing them to feel satisfied with their progress and happy with their decision to join, according to recent research conducted by exercise and sports psychologist, James J. Annesi, Ph.D.

In the coming decade, the front lines of the fitness industry must commit themselves to mastering the fundamentals of this power of three: "first impressions," "personal involvement," and "positive results."