Profit Potential Is Right Under Your Nose. Part 2

Like used-car dealers, these clubs often find themselves competing with each other on price, each one undercutting the club down the street. Price wars accelerate the desperate need for new members, since each one pays next-to-nothing to join. Club owners operating under the traditional head-count model never stop to ask themselves what they are really selling, assuming that it is access to treadmills, stationary bikes, group exercise classes and weight machines. No wonder they consider their facilities no different than others that offer similar equipment and classes. No wonder, also, that consumers base their buying decisions on price rather than quality.

The service mentality

Consider an alternative business model, one in which attitude toward members is more of a long-term commitment. In other words, instead of constantly increasing the head count of faceless dues-payers, increase the loyalty of your members, each of whom deserves great service. For that’s what you’re really selling, service, and the feeling of belonging that makes people want to be part of a club. Your goal should be to create high-involvement buyers — members who are more interested in having their needs met by your club and your staff, than in price. Some give priority to quality, some convenience. And, not only will high-involvement buyers generate thousands of dollars in income over the course of their memberships, each of those dollars costs you less to earn, because it’s much less expensive to do business with existing customers than it is to constantly replace them with new ones.

Multiple profit centers

By shifting your thinking to the service mentality, you open up opportunities to increase revenues by creating multiple profit centers (MPCs) in your facility. The possibilities for creating MPCs is limited only by your imagination. Classes, apparel, food and beverages are some obvious potential profit centers.

A home improvement just like kitchen renovation is a great and successful manner to add price of your house moreover upgrade a place which your family and you see, use every day.

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