This week I met with a small corporate club owner and their manager as they were trying to work through some marketing approaches that would help their club go from 360 to 400 members in the next six months.  Not a big ask you say?  Well how do you do that when you can't afford to advertise in print, radio or through the mailbox?  How do you do it when your website is poor and doesn't show up on google at all or maybe on page 95! (google is about 92% of all searches in NZ)

Here's what we did. 

Step one:  identify the parameters / define the goal. 

'Parameter' - yes, big word, but going in you need to know what you're bowling at otherwise there's no dance when you hit it and no tears when you don't.  And life just ain't like that.  So, for this club you're talking a solid 75% retention rate (yes, these guys really do look after their members!).  That translates to losing 25% of your membership (in this case 90 members) every year.  So, each month you need to sell 90/12 = about 7-8 memberships to maintain your membership size.  Add to that the growth aims of 40 members and you get another 6-7members a month for the next six months you need to find.

Okay, so what they are really trying to do is find, for the next six months, around 13-15 members a month (or 3-4 new members a week).  AND we really want members who will stay on - so we need to attract members from our key target markets.  Now we have a scope for the job let's look at their current situation across some key elements.

Step two:  define your target market - properly!

"We will let anyone join" or "anyone can be a member" is exactly the sort of language you don't want in your head at this stage.  It's a slapping offense.  Give yourself a slap now if you've been using those phrases or any version of them. 

As an owner/manager you should know EXACTLY who fits in to your target markets, what products they use, what services they like, what preferences/barriers they have, what drivers they have, and when they are most active in the market.  What that means is you must know your customers very well and find out why they joined and why they stayed. 

The temptation as an owner (and yes, I've been one as well as a manager) is to define your club through your eyes alone.  That is, you see what you want to see and therefore that perpetuates itself.  To grow a club you must look at who is attending and why and ask THEM about their vision of what the club is.  It's only then that you can market the place to people of the same viewpoint as that target audience.

In defining a target market or markets (yes, your club may have several - think morning exercisers vs evenings, males vs females, group fitness vs weights room users etc etc) you usually look at three areas; demographics, geographics and psychographics.  The first two are relatively easy, you will need to answer questions like; demographics - how old are they, what gender, what culture, job status, income; geographics - where do they work, where do they live, where do they recreate, where do they drink/eat/socialise.  These are all relatively easy questions to answer.  Most club databases will spew this stuff out quite well.  So that brings us to the last area; psychographics.  This is by far the trickiest and where you need their help.  You want to know things like; why they joined, why they stay, what do they like most about the club, what do they like least, what would make them stop coming, why do they attend when they do, why do they use the products/services that they do, why did they join when they did, who is the most important staff member for them and why... the list goes on.  This is why some clubs just don't know what they've got because these questions aren't asked and the database doesn't store the answers.  So, we tend to be able to tell who people are, and where they are, and when they are, but not why they are doing all of that!  If I want to 'engage' you with a message and I have only demographic and geographic information I may know where to be, and who you look like, but damned if I know what exactly to say - sounds like my bar life as a teenager!

Okay, so back to this wee club.  How did it stack up?  Well they sort of knew some of these things intuitively - and they did have a lot of thoughts about members, and some personal opinions of why they would attend the club.  And, they had just upgraded the club database so they would soon have a lot more information on some of these areas at their fingertips.  But, they really didn't know much about the psychographics of their members or the different target markets that they had attending.  I would give them a 4/10 for this area right now.

So after we had a chat about 'who' their members are we moved on to step 3,

Step three:  identify what is currently working - where did your last 20 membership sales, that fit your target market, come from?

Every effort you make to promote your club should be to the people who are most likely to join and most likely to stay (we'll deal with membership churn in another blog no doubt).  Yes, it's nice to get lots of people joining but it's even better if you won't have to do that endlessly because those who join will actually find what they want and stay.  So, once you know your target market, go back and ask the last 20 members who joined where they heard about you and how they came to contact you.  Most clubs will have this locked in their 'membership sales' process.  Every new contact is a potential member and you MUST ask where they found out about you otherwise how the heck will you know what works and what doesn't.  So, get on the blower / on the floor or wherever and ask the last 20 if you haven't got it coded in somewhere.  If you have to ask the last 20, again slap yourself, then go and set up a system and train ALL staff to ask this question whenever a new enquiry contacts the club.

To our friendly wee club - well they didn't know where people found out about them from.  The last 20 members therefore were sent from the almighty, who gently blew them in on a favourable breeze despite the recession.  Slap, slap, no!  That's a 2/10.  In this situation you don't really know who you are after (step 2) and you don't really know where the ones who miraculously find you are coming from!  Most likely with this club it is from word of mouth because, well, they don't do any other form of marketing at the moment.  They have a web but it's rough and I'd actually take it down and get it re-worked, I'll talk more about that in a minute.  Also with 75% retention there will be a lot of advocates for the club.  That said, membership is shrinking which means their marketing reach is simply not big enough - they're good at delivering fitness solutions but not so good at spreading the word, telling enough of the right kind of people about their prowess.

Step four:  work out what it's costing you

Okay, so now you know where your members are coming from (well you should!) you can look at what you spend in that area (called a channel if it's based on a certain type of activity - eg web, print, radio; or a campaign if it has a distinct start and end point - eg new years 'rejuvination' campaign, or 'mums on bums' spin campaign etc) and work out your acquisition cost.  An acquisition cost is simply the amount of money you spent in that area divided by the number of members you joined (or memberhship months sold if you want more accuracy). 

An example; if I spent $4,000 on my website annually (and that included four quarterly email campaigns, six e-newsletters and some updates to look and feel) and split that over 12 months ($333.33 a month) and I found last three months I got twelve memberships from the web activity then my 'acquistion cost' would be $333.33*3/12 = $83.33. 

Another example; if I spent $1,200 (including design, print and delivery) on central PO Box flyers to go in twice in the month of January (my new year new you campaign) and I got 4 members my acquisition cost would be 1200/4 = $300.

Some obvious answers there!

Okay, so our wee club.  Not a very well defined target market breakdown.  A scary understanding (or lack of) with regard to recent sales.  No spending in promotion that has been directly tagged - note they probably do do some spending in 'marketing' but don't exactly realise it.  For instance, member evenings, wine bottle draws, event promotion can all generate membership but only if it's willfully aimed that way and therefore accounted for in that way too. 

So what is the acquisition cost for this club - unknown.  This is how the rot sets in because now you don't know what works and you try something, and it's expensive, and you get a blip, and you think - ah ha - this is what I have to do more of because swanky marketing guy who SELLS ADVERTISING reckons if I went a bit bigger the blip would become a torrent and we'd all be swimming in cash.... wrong.

There is a great book written one of the guys who was head of marketing for Coke for some time.  Name escapes me - had a 'Z' in the last name if that helps (found it - The End of Marketing as We Know It).  Basically he pointed out that the purpose of all marketing is to increase the sales of something.  Yes, it can promote the brand and make everyone feel all warm and fuzzy (like wheeze in a wetsuit) about the brand but if those feelings don't correspond to sales - and he was saying sales now not later - then dump the campaign.  Certainly review the campaign, ask questions, re-work, change the messaging, place it differently at a different time, but for that exact campaign - dump it.

So, our wee club doesn't really know how much it costs to get a member in any one channel.  It could total everything in its books up that isn't 'operational' call it 'marketing' divide it by the total number of new sales for the year gone and come up with an average cost across all activities but that's a blunt tool.  At this point in the process there are some great opportunities for this club to go backward a bit and set up some key systems and then take some advice from someone who has cocked up and inordinate number of campaigns - someone like me or maybe someone like you - someone in industry with similar challenges and some experience with what might work!

Step five:  brainstorm, discuss, prioritise, decide and schedule your campaigns

At this stage you can usually say 'these three things we do are gold - they have low acquisition costs, find us the right type of member who we can keep happy 75% of the time, and there may be opportunity to work this channel/campaign more too and get similar results' (ie if you can get a member for $83 and you make say $120 for each membership in your club over 360 then how many times would you spend the $83 to make the $120 - well as often as you could of course - or until your club filled up!).

Off the back of what works well (and one way to look at this is average all your marketing to get an overall average acquisition cost and keep anything that is better than average - or, if you've got a lot of rubbish and just a bit of gold, focus on just the gold and come up with some more approaches that are similar) you need to think about what else MIGHT work. 

I love this bit.  This comes back to the member research in step 2 and 3.  You gotta get their shoes on, think about what they say to themselves, where they drink their coffee, buy their shoes, fill their car, laugh, cry, hang out with others, feel best, feel worst.  Again, you'll want to get right up close, so knowing who they are and where they'll be is key.  And once you're in front of them, you'll need to say the right things to have any chance of a longer conversation.  And that's where step six comes into it - and to do step six you must understand the psychographics of your current target markets (see step 2!)

Once you have all your ideas on a whiteboard or piece of paper then you get all rational on it.  Yes, down to earth we come - the hot air balloon with the oldest member bungy jumping off it in one of your club t-shirts screaming 'you're never too old to dive in to life' and local TV, a press release, and all manner of St Johns lined up and YouTube fame imminent (although this is a campaign I'm liking the sound of the more I write it) might not fly (excuse the pun).  You'll need to apply your budget and look for cut-through to your target market.

In marketing they talk about 'cut-through' as getting in front of the people you need to and 'frequency' as how often you'll do that.  In small clubs you need scalpel like cut-through and frequency as often as your budget allows.  The other thing about 'budget' in this instance is that if your acquisition cost is low, and your profit is stable on each member (it's not but I'll deal with that another day) then to have a 'budget' is silly.  What you should be doing is saying how many times can I spend less than X to make at least Y.  This is much more sensible as it allows you to invest in growth rather than say, ummm actually we're making heaps of profit from this approach but our budget is now all spent so we'll have to stop. Slap SLAP!

So here's some things we brainstormed together with this wee club:

Drop boxes at local cafes, clothing stores, beauticians, hairdressers, massage therapists and any other businesses within 500metres of the club where people from the (yet to be identified) target market would stop, pause, be thoughtful, be ready to change / consider themselves long enough.  This is cheap to do and with the right offer a relative gold mine of qualified leads.  You have to do it right though, targeting the right clientele and really working the drop box (eg getting to know the staff, arriving with coffees / movie tickets, inviting them up to the club etc etc).  The messages (what you'll say to keep them reading - then thinking - then keen to fill something out) and qualifiers (what you'll make them do so you don't get everyone entering to win).  I'll keep you posted if the drop boxes happen and how.

Six week membership promotion - try before you buy - you'll be surprised by what you can afford - sort of messaging.  This campaign to go through the membership channel and to occupants of surrounding buildings and also through trainers to clients (the thought being the trainers may use the membership to promote a 'try before you buy' period for PT in conjunction with the membership offer).  Again, cost effective and direct, and responsive (we hoped - because we had no way of knowing) to the psychographics of the membership (it was thought that price expectation stopped some trying the club when actually the club is cheaper than almost all other facilities within a kilometre). 

Upgrade of website - this to go out to members as a link and an extra link with a 'refer a friend' campaign that they could just forward by email to a friend and that person could fill out four bits of info on a registration form and get either two weeks free trial or six weeks for $95 - both memberships including some close support and supervision in the club.  One key thing with the web is it is often a way potential club members research your business.  So, they find out about you through some camapaign you are doing and then ask friends and google you.  If your web is rough or gives the wrong information or isn't current - you've just killed the lead despite your campaign working your reputation or website is hurting you.  Also, your web is a great way to provide more information without paying lots for print.  If your web is good you can encourage people through your campaings / channels to 'check us out online'.  When they do, you need to give them lots of great info and allow them easily to register their interest.  Yes, this limits the number who might contact you directly by phone initially, but it also gets very qualified leads in and it allows you to have a great source of info online.  For this wee club I'd have my prices up front and invite people to call other clubs and compare.  I'd promote my points of difference (these are the things that are different about you versus your competitors) and I'd have member comments (remember the advocates) with lots and lots of photos of the club and it's people.  The three most visited pages on a web are usually about us, staff, galleries.  Enough on this for now, but again maybe this needs another blog someday!

Local school promotion - okay, so most of the people in this club have kids.  Those little things that run around eat, pooh, sleep and generally ask for stuff endlessly.  And, kids go to school eventually.  And schools always need money for something.  This campaign is 'get your dad fit' - run during the school term.  The kids enrol their dads either onine or through a slip at school.  Their dad gets two weeks and has to exercise five times and have that signed off at the club.  The first is a 'report card' which is from the fitness appraisal at the club.  Then there are five training sessions of thirty minutes or so over two weeks all with a gym instructor providing the support (or PT if they choose).  Each dad who completes the programme the school gets $50!  That's right we'll pay the school to get the kids to get the dads to try the club solidly for two weeks.  Now, excluding the internal effort of staff and the set up of some basic forms (which can be re-used for the mums campaign!) the cost is $50 and that's paid after the person has had a really good crack at the club.  Backing on to that programme is either a six week membership or a year membership.  So, if, after trying the club we ended up joining every second dad our acquisition cost would average $100 per member on this campaign.  If you wanted to be even smarter, get the dads together and play social soccer as a session too - a bit of fitness in a social environment amongst dads from the same school - holey moley I'd stay on!

Once you've worked through everything and decided what you want to try on its merits you will (ideally) build up a schedule for the next six months (or year) and work backward from the 'go live' dates for each campaign.  The schedule may change a little over time but you need to have a view of it to start with otherwise allocating resource is very difficult.  Also, you can put your schedule up for scrutiny too.  Maybe one campaign works after kids school holidays but not prior to them.  Maybe you can get good mileage out of a channel at certain times of year but not others.  At least with a schedule you can pull together some facts and figures.

One last thing for owners out there who aren't doing this themselves but just harping at their managers to 'get it done'.  It takes a lot of time, energy and sometimes some extra money to get this sort of work done.  Heck, your manager might not even be capable of it as most are usually hired because they get on with everyone and are technically respected.  That does not make them a marketer of any sorts.  So, either support your manager and spend some dough to help get this done, or hire a dedicated external resource, or do it yourself, or park your wishes and realise you're not prepared to approach this in the right way to make it happen.  Slap.

Step six:  develop your content (or pay / copy / beg / borrow / steal) and pay someone to do the design (ideally)

All marketing is the start of a conversation with someone.  If you think of that basic premise what would you say to your potential members in just three seconds.  What picture would you show them that gives them the exact idea you want them to have about you.  You can have the best idea, the best channel with great cut-through to your target audience, and then - you Greg Norman it (choke).  You can say the wrong thing.  Again, you must understand the psychographics of your customer base and you must have a command of English like Chaucer, an eye for design like Dior, and the quiet space to put all that together - or you can pay someone to do it.  The alternative for some campaigns is a simple letter written from the heart but not all campaigns suit this.  When putting messages together you have to match the key words that they might have in their heads, or their fears, frustrations, disappointments - with solutions and light.  It's not a skill many of us have, but it's one that can make all the other effort you put in really pay.  I think of a campaign we once ran on radio for two weeks - we gained 75 members on a short term membership (eight weeks).  This was 25% membership growth, we couldn't even process all of the new members!  We had a very well known radio personality, who was a member, who was the exact demographic of our club, just feature for about eight seconds in the ad.  The phone rang off the hook - basic message was give these guys a try, I did.  So, radio doesn't usually work (in my opinion) but used in this way it did for us.  However, after that it never worked again because we didn't get the opportunity to use the radio personality again as he moved away.  Our acquisition cost was still $50 or so, and any campaign in the future on radio was late in the $100s.  Not a good spend.

By way of an example - for the drop box campaign in Cafes you might have on your drop box - flat white, muffin and fitness for free (if you were running a free trial month).  The image might be a good looking girl about to bite a big muffin!  Or a business person sipping coffee in their workout gear (striking enough to get a look).  The message could be drop your business card in the box for a free trial at a local club. No strings attached.  And, you'll need to push the counter staff to promote the opportunity and to rave about your club if asked - that means getting them ALL down to the club at some stage AND after the first week for every few entries you get from that shop give them a Hoyts movie voucher as well.  Or give the cafe with the most leads the vouchers and let the others know.  Yes, that's $12 a pop but if you don't get people supporting the initiative you're goose is cooked anyway - what's a few bucks sprinkled when you are looking to really test a campaign strategy.

Step seven:  test and measure

Alright, you've got some  campaigns up and their about to run.  Back to step 2.  Are ALL your staff trained to process these enquiries in the same way, each time, with an understanding of all the work that's gone in and who they will / should be running in to on the phone and as walk ins.  Whoever is doing the outgoing calls on the drop box, are they well trained, what are they 'closing' to, what information do they have to give, what objections might they get, how do they document all of this.  What is your budget, how will you monitor it, when can you get an acquisition cost, when would you extend a campaign due to good performance, when would you 'can' one early. 

Whoever says marketing is easy, well quite frankly hasn't tried it.

Last thought on this - the wee club will, over the next several months no doubt action some initiatives.  They obviously have a great product and services and have many happy members so I can't see there'd be a big challenge in getting an understanding of the specifics of there target markets, and then finding more of those same people and in an economical way telling them about the club.  Likely the biggest challenge will be getting their heads around the fact that this is something that is difficult, you have to work together on, takes time to get right, and can cost a bit while you mess around with it.  Taking into account that the harder something is, and the longer it takes, the less likely the project will be done - some determination will be required. 

The long term view though is that by doing this you have a sustainable business - one you can market in the right way at the right price to the right people and therefore maintain the profits.  A little short term pain for long term gain may be required - and should be well worth it in this case.

 

If you want more help with marketing your club - feel free to post in the managers/owners forum, collectively we'll have some good thoughts no doubt.  If you would like to comment on this blog please do I'd love to hear what others are thinking about when marketing their clubs.