Final numbers for January

Now that our first promotion for our club conversion has ended, and January is behind us, here are the numbers I promised. The first section below posts just the numbers. Following that are my comments about them.

It should be noted that the figures reflect the influx generated primarily from the postcard mailer, and include revenue from new members rather than from our existing EFT members. The figures do not include ancillary revenue from personal training and product sales. So what you see listed is pretty much pure membership revenue.

Numbers:

• $3735 - Incoming cash from paid-in-fulls
• $635 - Incoming cash from first EFT payments (pro-rated)
• $735 - Income added to our monthly EFT base

Comments:

First, I am very happy with the numbers. The roughly $4500 cash that was brought in more than covered the cost of the mailer.

But the real success story is the increase in our EFT base. The EFT memberships we sold during this promo were based on a 1-year commitment with auto renew (auto renew means that after the year is up, we continue to draft members' accounts each month until they tell us otherwise).

The potential gross value of the EFT bump over the coming year is $8800! Realizing there are processing fees associated with EFT's, and understanding that some EFT's will go bad, I still think this promotion was a major success! With a few months of this type of growth, we would go a long ways toward covering our overhead and putting some money into the bottom line.

Worthy of note: 35% of the total revenue above came in by way of our website, which was $1500 in cash sales and another $300/month added to the EFT base. That's signigicant! I cannot stress strongly enough the importance of a well-planned web presense for a 24/7 club. You can eliminate a lot of payroll with this type of club, but only if you have an alternate method for collecting money and making new sales. A website provides you with this capability.

For those who are thinking of converting your club, I've got to say that the WG web presence is a huge benefit (and there are many others). Even if you do not plan to convert to a WG, do yourself a favor and hire a web designer who can provide you with the ability to sell online. You can probably accomplish this for $2,000-3,000 dollars. I believe you'll find this is money well spent.

In the upcoming weeks I'll post some pictures of our newly branded club. We think it looks great - stay tuned ...

Early numbers are in, and they're good!

We've been waiting for results, and at last I've got some figures for you. But first let me mention a couple of things to provide a frame of reference:

1. Only one full week has passed since the postcard came out advertising our conversion to a World Gym and offering the opportunity to purchase memberships online (last Thursday the 10th - till today, Wednesday the 16th).
2. The promotion expires on January 31, so there are still a couple of weeks left. However, I'm not expecting many more online purchases until the final 3-5 days when last-minute shoppers will get in on the deal.

I'll follow up this post with another shortly after the promo period ends so you can see exactly how things shaped up.

Now, the numbers ...

• $2,065 total incoming cash for the week. Of that, 30% was brought in online and 70% at the club.
• $315 total added to monthly EFT base (40% from the web, 60% from the club).

I think these numbers are pretty strong. I'm especially impressed with two things: 1) the bump in the monthly EFT base, and 2)the fact that over 30% of the sales were generated from the website.

Clearly web sales are the factor to watch - the more comfortable people become with joining online, the less dependent your club will be on staff to generate and process membership sales.

Notable increases... ongoing changes

As we hoped, there has been a significant increase in phone inquiries, club tours, and new memberships (both face-to-face and online) as a result of the postcard mailing and the buzz about our conversion. Currently, 9 memberships have been sold online, and another 4 or 5 at the club. That's not bad!

The postcards began arriving last Wednesday, with the majority being delivered on Thursday and Friday. Because the second half of the week is generally the slowest time of the week for selling memberships, I'm hoping to see a busy first half of this coming week. Then I suspect there will be a lull, hopefully followed by another surge of activity and sales as we near the 1/31 expiration date.

The foyer, office, and newly-built tanning room are now painted, and they look great. This week I'll order the required signage so we can get more of the WG branded items in the club. It looks like the signage will set me back about $1500 - $2000 (not including the lighted sign that will go on the outside of the building).

As many of you know, I am a newly converted "big believer" in branding. I was convinced after seeing the positive results created by branding in several Planet Fitness clubs owned by a friend. I'm completely confident with the financial commitment required to brand our club. This includes expenditures for things like paint, signs, pens, t-shirts, and other logo items.

We removed all existing banners from the walls, as well as other signs and anything that will be in the painter's way when he returns to paint the gym. Unfortunately, the painter informed us at the end of last week that he's unavailable this week while he finishes another large job. My manager Henry plans to get him to come in a couple of half days just to keep things moving ahead.

Our goal is to get all painting and re-branding completed by the end of January. By then, we should also have all of the new equipment in place, tanning booth installed, and signage displayed. We look to really hit our stride in February as we adapt to our new way of doing things.

Anticipating an onslaught.

Our postcards will start hitting mailboxes today, according to the account manager at our WG-approved marketing company. That's a few days later than I had hoped, but was told that the holidays slowed things down.

So a week from now, I hope to report a noticeable upturn in traffic and membership sales. The offer runs until the end of January, so as long as it drives in enough traffic (and sales) to cover the expense, I'll consider it a success.

I've been told that it takes a repetition of 3 mailings to ultimately produce the intended results. This means budgeting about $10,000 for marketing over your first 3 or 4 months after converting or opening a club. I'm sure we agree that this is a figure that makes you pause. And yet, marketing your business is a must. Just imagine how much money car dealers spend on advertising!

The new look continues....

The painters began repainting the club yesterday. They should be done with the tanning room, foyer, and office by the end of next week. Then they'll start on the club itself. I plan to have pictures posted by the end of next week. The colors are a change, but very nice. The tones are warmer than those harsh "in-your-face" colors popular in most fitness centers over the past decade.

Possibly you already know that Planet Fitness acquired World Gym over a year ago. Planet Fitness is known for its motto "The judgement free zone." And you may have heard about them in the news when they kicked out a member for grunting too loudly while lifting weights!

In developing the World Gym 1440 All Axcess concept, the company converted one of their smaller, corporately owned Planet Fitness clubs in Manchester, New Hampshire, to a 24/7 club under the World Gym brand. If you visit http://www.worldgym.com, and click on the state of NH, you'll be able to see pictures of the re-branded club.

Watch for pictures of our club, and an update as to the success of the postcard mailing.

Marketing Prep--and Immediate Results!

As expected, the few things we accomplished over the past couple of weeks include the construction of the new tanning room. And we've prepared for the anticipated increase in membership sales that will result from our mailing campaign.

This coming week, the postcards WG helped us design will hit our local market. In addition to the promotion being offered ($29/month membership cost), the postcard will also encourage recipients to visit the website, and even to join online.

Initially, I was a bit concerned about the timing of that online offer. That's because the price tag on this particular printing and mailing is costly- upwards of $3,000. And as recently as last week, we didn't have a website. But all that has changed with the help of WG's webmaster Todd.

We now have a phenomenal website - check it out at www.worldgym.com/phoenix. Now I can hardly wait for the postcards to drive traffic to the site. In fact, this weekend I went in to the office to go over a few revisions for Todd. Once I logged in to the administrator section of my site, I got a great surprise - we made our first online sale already! It amazed me that someone made their way to our site with virtually no marketing material directing them there. Furthermore, the individual bought a 1-year, paid-in-full membership. This is what I've been waiting for.

If you've been following this blog, you already know my view on the importance of offering membership purchases online. I believe it's going to be at the top of the list of The Most Important Developments for 24/7 Clubs. If you can make membership sales online, you will vastly improve your ability to adjust your club's staffed hours. And that's guaranteed to trim payroll expenses and keep your club running profitably.

In fact, when my manager and I met last week to discuss sales strategy, we both agreed on this: If a prospective member visits the club and does not buy a membership, the next most important thing he can do is to get them to visit our website after they leave. To that end, he makes sure they get his business card and a couple of World Gym logo pens, both of which have our web address on them.

Gone are the days of pressure selling, which is a tactic still being used by many. Instead, we plan to show prospects what we have to offer - a clean, modern facility and the ultimate in convenience. Then, if they don't wish to join immediately, they can leave to think it over. I anticipate that many who leave our club will visit our website and ultimately join online. It's a kinder, gentler approach to sales.

I'm aware of more plans WG has for their website and the online memberships. But I'll honor them as a trade secret until they announce the plans themselves. However, I can say this much: One of the biggest benefits to owning a WG franchise is likely to be their commitment to website development, and their pursuit of innovative technology.

24/7 clubs, by their very nature, depend on technology. As time goes by, you'll notice that what sets successful clubs apart will be their effective integration of technology. And that's not unlike what's true for almost all businesses today!

Lots of essential details in the busy holiday season..

Quite a few things happened this week. None of them were terribly eventful, but all were essential as we move towards converting our fitness club into a World Gym.

• We reviewed and signed off on the proof for my manager's business cards. This is our first promotional item and we'll use it to let others know that we are now a World Gym.
  
  
• I spoke to Todd, WG's website guru, about the steps needed to get our club on the WG website. Most important to me, we discussed online membership sales. I'm confident that this feature of my arrangement with WG is going to be one the biggest selling points among members, and the most beneficial to me. Having someone handle all the details associated with selling online will be great.
  
  
• We received several boxes of WG promotional items - dozens of t-shirts; hundreds of pens and stickers; along with some banners, signs, and window decals. These items were referred to as a 'starter kit'. I estimate the value at $1000 or so. The promotional products can be used as giveaways to get the community aware and excited about the "new" World Gym.
  
  
• I also finalized my equipment lease and put the equipment order in. We aren't adding much new equipment, just a couple of pieces of cardio, a couple of pieces of strength, a new tanning booth, and some rolled rubber flooring.
  
  
• Chris Rondeau and I also worked out the details of our first direct mail piece. We reviewed and approved the proof, and it should be in people's hands in the first week of January. I'll give you a follow-up at the end of February to let you know how much the piece cost and how many new members we think it brought in.
  
  

The next couple of weeks are going to be tight due to the holidays. I'd love to say that we're going to get a lot of work done on the facility, but I'd probably only be kidding both of us. I hope to complete at least the electrical work and sheetrock in our new tanning room, but that's probably about all I can expect. So stay tuned...

Blizzard Conditions

This week I scheduled a trip to Manchester, New Hampshire, to observe what's happening with the conversion of World Gym's corporately-owned club. My trip had a specific purpose based on one of my firm beliefs. It is this: when anyone claims to be an expert in a field, that claim needs to be backed up with "real world" experience.

Here's my reasoning. Consider this. Which would you rather receive business advice from- a) someone like a Harvard MBA who has never owned or operated a business a day in his life, or b) someone who's actually been "in the trenches", so to speak? My preference is for "b" because I trust experience more than theory. This is why it was important for me to see that the substance of World Gym consisted of more than just well-educated people with some good ideas. I wanted assurance that they were going to get in the trenches with me!

Finally, after a 12-hour road trip that normally takes only 6 (you may have heard about the wintry Nor'easter that hit the New England states at this time), I arrived at a Planet Fitness club in Manchester. This is the club that World Gym is converting to their "1440 All Axcess" concept.

I was glad to see that size-wise the club was almost identical to mine. It is also located in an unspectacular, somewhat blue-collar-looking plaza, as is my club. So I am encouraged by the fact that the first club undergoing the conversion mirrors mine so closely.

I met with Scott, construction manager for Planet Fitness. He provided insight into the planned structural changes that will accommodate the 24-hour access concept. Surprisingly, none of it is that extensive. In fact, Scott plans to have it completed within 2-3 days at the end of Christmas week.

Basically, they're removing a couple of interior walls, eliminating the check-in desk, and re-purposing one of the tanning rooms to make it a secured office. This is where the surveillance, security, and access computer will be housed. One other thing they're doing, for which I don't have the budget, is replacing all of their existing strength-training and free-weight equipment with brand new World Gym branded equipment, manufactured by Life Fitness.

Blizzard aside, it was a good trip that answered my questions. I got confirmation that the company is indeed in the trenches with me.