Times, they are a changing. With the maturity of the low-price high-volume model and the explosion of boutique fitness, established clubs are seeing same-store sales become flat.
Clubs are starting to see the volume of consumers who flock to the low-price membership options begin to decrease, creating significant concern around this business model.
After running the low price high-volume model, clubs are left asking themselves – Where have all my best customers gone? They have found a new fitness experience that is cost-effective, fun, and creates a sense of community. (i.e. Cross Fit, Soul Cycle, Orange Theory – the list continues on and on.)
So, with member volume decreasing and high-ticket customers leaving for boutique fitness, what is the club operator left to do?
Compete – and not only compete, but compete at such a high level that it restores the profitability to fitness.
How is this being done: by continuing to offer low price memberships and UP selling fitness (IE team training) at the point-of-sale for an increased monthly fee.
The low price entices volumes of prospects, and the fun and community of team fitness, if done right, is attractive enough to increase the average ticket sale significantly.
The name of the game is increasing the average revenue per member. By having a three-tier offering, with the significant value in the highest priced third tier, the best operators are finding that their average ticket price is significantly increasing.
This can still be a difficult play if your sales staff has been in the high-volume model where they were essentially order takers and are now asked to sell fitness.
Asking sales staff to change not only the offering but the pricing, the time they spend with a customer, and the education they must deliver to help the customer make a more expensive purchase can be a significant undertaking.
Suggestion – don’t reinvent the wheel. One of the best operators told me he likes to do R&D, rip off and duplicate. There are systems already in place that have been proven to rollout, deliver, and train with proven KPI that you can anticipate during the ramp up and mature phases.
If you would like more information on how you can improve your same-store sales and average price per member by offering a third-tier membership, please contact a sales representative.