A 'Fitness Management & Consulting' Health Club Turnaround Case Study

In 2004 Kevin Walker, an acclaimed personal trainer, decided to branch out into the broader health club business. He soon found out that his elegant club, complete with state-of-the-art equipment, exercise studios, entertainment systems and all the other amenities that should portray instant success, wasn’t enough to bring in the needed revenue. He called in industry expert, Jim Thomas of Fitness Management & Consulting to shape things up for the arrival of the first quarter of 2006, the peak period in the industry.

In July of 2004, Kevin Walker - an accomplished personal trainer, former Mr. Missouri, and the coach of a "Body-for-Life" champion- took the plunge. He opened his multi-purpose "health club,” Club Nutrition and Fitness, in Springfield, Missouri. He quickly found out that running a health club was a dramatic departure from his previous in-depth experience in the personal training business.

The club fell far short of its targeted sales in the first year and a half, and Walker found himself taking on 12 to 17 personal training clients a day just to help keep needed revenue coming in.

He soon realized that although gym marketing and sales weren’t necessarily his forte, they were going to be indispensable for survival. According to Walker, “I was concerned about new member acquisition, and also the loss of members, which wasn't terrible but we didn't achieve what we wanted that first year."

After completing his first sub-par year, and with the prospects for the second year looking just as grim, Walker pondered the idea of bringing in an outside expert. He quickly sent a call for help to Jim Thomas of Fitness Management & Consulting. As the founder and president of Fitness Management & Consulting, Thomas has over 25 years of experience owning, operating and managing health clubs of all sizes. He specializes in management consulting, sales consulting, marketing and turnarounds of gyms of all sizes.

Thomas is no stranger to these types of situations, having helped innumerable club owners since he starting consulting in 1989. "More often than not, the club is losing money, wondering if they can stay in business, and a lot of the time they're just worn out, they've run out of options, run out of ideas and don't know which direction to turn.”

Thomas explains that troubled clubs are generally lacking proven systems and procedures. There are overlapping duties in some areas and wide gaps in other critical areas. "The first thing we recommend we do is come in and do an operational analysis. During that process, the client and I get to know each other and based on that chemistry and the information that's provided by the analysis, we make a mutual decision to move forward or not."

The Innovative Use of Multi-Media to Keep Costs Down

Most small independent clubs don't have the financial resources to "fly in" qualified consultants for extended periods. To cope with this Thomas came up with the novel option of substituting some of the follow-on consultation visits with telephone conference calls. He also makes copious use of e-mail, constantly sending updates on best practices to his client base.

"The telephone consulting came about as a way to bridge this gap. My thought was that I wanted to help these independent clubs compete with these big operations…and we have."

Through research and trial and error, we finally understood how telephone consulting could provide a great service. A lot of these small clubs get isolated, there's no one to talk to. Obviously they can't call their competitor. We can be that 'sounding board', we become that resource center and we can help shorten that learning curve. And, most importantly, save them their hard earned money."

Punching Through the Sales Plateau

Effective marketing is a key factor in turnaround situations. When Thomas first sat down with Club Nutrition and Fitness, his first observation was that there just weren’t enough prospects coming through the door. As Walker recalls, Jim wanted a constant effort. "First thing he said, it's your lack of consistency with advertising. You're hitting it hard here and there, but you're not 'consistent' each and every month."

Although marketing is crucial, Thomas insisted that the advertising budget not be raised. Instead he recommended different layout and print vendors. The club was able to save substantially on that aspect of advertising and money was reallocated to more frequent direct mail drops. Most importantly, though the mailers in the past were "pretty" and grammatically correct, they weren't motivating prospects to come visit the club. With a little critical "wordsmithing," Thomas vastly increased the effectiveness of the mailer, and got the necessary number of prospects coming through the door.

Another challenge was that Club Nutrition and Fitness had no sales manager in place.

It was evident to Thomas that it would take too long to set up the procedures to source an effective sales manager. Instead, he used existing resources, i.e. the front desk staff, to close new memberships. Thomas immediately instituted simple scripts, procedures and incentives for the front desk staff. He even tweaked the club tour so that it was more systematic.

A Record Quarter

The results of the new procedures and training were beyond all expectations. January showed a 37% improvement over the previous year. The uplift continued into February and March, with each month showing a 30% improvement. What's truly remarkable is that the new membership sales were made almost entirely by college-aged front desk personnel.

Walker summarized the whole experience, “6 months ago I was out of ideas on how to improve our situation, now we're breaking sales records and I'm sleeping better at night. None of this would have happened if I didn't make that call and bring in an expert like Jim.”

About Fitness Management & Consulting

Fitness Management & Consulting is a consulting firm specializing in health club business consulting and turnarounds. Areas of practice include management training and procedures, sales and marketing systems and training, and operations. It’s founder, Jim Thomas, has over 25 years of experience in all aspects of club ownership and management.

Recently, the firm initiated a new method of consulting that makes abundant use of the phone, email and other multi-media. This removes a lot of the costs normally associated with quality consulting so that clients can get great value.

For further information call (800) 929-2898 or you can also visit www.fmconsulting.net.