Gyms: growing your sales through secondary spend

Michael Clark heads up Customer Relationships and Business Development for e-commerce fitness specialists Gym-Partners.

Over 25 years Michael has held numerous senior positions with the likes of Leisure Connection (1Life), Livingwell and Fitness First as well as having created and run his own FMCG supplement company.

The Fitness Network:

What has the attitude generally been from gyms towards secondary spend opportunities such as online retail?

Michael:

Traditionally it’s been over-looked or at best seen as a small bonus to membership fees, but that’s changing. Operators are fast realising that, aside from bricks and mortar, the value of their business is tied up within their database.

To be frank, it has always seemed counterproductive to me that operators would want to offer great facilities, programmes and services, but not the tools/kit that the member needs to be a part of them. Instead chains allow their members to head off to sports retailers, the internet and in some cases competitors (DW Sports and Sports Direct for example) to buy the things they need. The independent research we conducted with YouGov showed that 43% of gym members would likely or very likely buy from a trusted/branded gym shop if their gym had one.

“Operators are fast realising that, aside from bricks and mortar, the value of their business is tied up within their database.”

The Fitness Network:

Why is this secondary spend so important?

Michael:

There are lots of reasons why developing a clear secondary spend strategy is so important. The obvious one is that it can generate substantial additional revenue, but it also can also directly impact member experience and retention, as those members who invest early on in the right kit, especially early on in their membership, are more likely to feel comfortable in the gym environment, be more “tooled-up” to achieve their goals, and therefore more likely to continue their membership.

Such a strategy can also generate additional marketing exposure. In fact we typically find that 18% of the visitors to the online shops are not actually members, but friends and family of members. That’s fantastic as we can then drive these people towards becoming members of the gym.

“43% of gym members would likely or very likely buy from a trusted/branded gym shop if their gym had one.”

The Fitness Network:

What are the main product lines gyms should be pushing?

Michael:

They fall under five main categories; clothing, footwear, equipment, technology and nutrition to ensure that the big retail spending areas are well covered thus reducing the need for a member to look or shop elsewhere.

This won’t surprise anyone who’s seen the ACSM predictions for 2016 but the bestselling of those five now tends to be fit-tech.

The Fitness Network:

What can gyms do to enhance these sales?

Michael:

There are a variety of things gyms should be doing:

– Communications – you should be using email, sms and social media to directly but not intrusively communicate retail opportunities to the member, frequently and in a joined-up manner. Most importantly you must ensure the content is of value and represents the gym correctly. In particular you need to ensure the communications are consistent, so if you’re going to push out an email and a Facebook promoted post on the same day, then ensure they’re for the same product and with the same messaging.

– Internal promotions – you need to be crystal clear on your brand guidelines so that your POS material fits with the style of your gym, rather than just throwing a couple of posters on the wall. Your marketing material should enhance your brand identity rather than detract from it.

– Incentivise staff – trainers and class instructors need to be motivated to go out there and sell. For example, a class instructor should have a range of promotional cards that fit with the classes they’re delivering, whilst a sales rep may need broader material but with a clear menu structure as you have to assume they won’t have the same depth of knowledge. For any material handed out to members, there should be a unique code so that when a sale is made the right member of staff generates commission. It soon becomes clear which members of the team are driving the sales, and for those that are they can soon increase their overall wage by 10-15%.

– Incentivise members – offering discounts to members is of course an important strategy, but I’d always encourage gyms to be a little smarter than that. If you give everyone the same discount then that effectively becomes the regular price, your margins are hammered and nobody feels special. However, if you just select a small proportion of members then you’ll really influence their behaviour. The people to select are of course those that you feel might lack confidence and need some extra support. By giving them a reason to invest further in their fitness you’ll enhance their gym experience and significantly reduce the chance that they’ll drop out after a few months.

 

Posted in Gyms & Clubs, The Fitness Network.
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