How to Maximise Customer Value (Part 1)
The No.1 Mission for all fitness clubs must be to “maximise customer value”.
The logics very simple.
Once the original membership sale is achieved then all further revenue is achieved with virtually nil cost of sale.
In the future, we can expect that the likely cost of acquiring customers will increase as the market becomes invaded by increased marketing noise from all sides both online and offline.
You are going to have to commit more money than ever before to get the same results in a crowded market and if you want to dominate then you will need to be spending significantly more than your competition.
Leveraging enough financial power to advertise effectively will come from the knowledge and confidence (through factual on-going analysis) that once attracted to your club, the returns from the various monetisation sources you are utilising will easily justify your customer acquisition costs.
These costs fall into 2 categories.
Lead generation. The activity to get prospective customers to reveal themselves.
Conversion. The process and resources need to turn that non-payer into a subscribing member. The costs may be in staff time or in advertising promotions.
Measurement is king! We can’t stress this point enough. Really understand your numbers if you want to succeed.
The Principle Ways to Maximise Your Members Value
- Increase Transaction size–Initial or Repeat
- Increase Transaction Frequency
- Increase term of retention and lifetime value
- Increase PROFITS of business conducted with each member.
- Recover lost customers
- Clone or multiply customers by referral
Maximise the benefits of each of the 6 and you will become the beast of your jungle.
Here’s a bit more detail and some ideas on how to achieve the main areas.
- Increase Transaction size
- Offer at the point of joining a Triple price sandwich of new member programmes ranging in quality of support and tuition and reflecting 3 price levels (GOOD BETTER BEST)
- Offer options with added value for longer term commitment. One year in full, 2 year in full, 3 years paid over 12 months in instalments
- Use the concept of transferable memberships and money back guarantees to reduce the barriers to entry.
- Look at ways you can add value to existing membership options with inclusive coaching, supplements, and other benefits.
- Think about bundling of Sessions particularly Group exercise where customers are very happy to buy bulk for discounted rates.
- Increase the Transaction Frequency
Build a schedule of things that you can sell to your customers and most importantly work out ways that you can contrive a situation in order that you can simplify selling it directly either online or offline.
In the next post we will discuss what services and products that you can promote and the media to do it with
