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Maximizing Revenue Per Member Through Ancillary Sales and Services
- 1. Maximizing Revenue Per Member Through Strategy, Sales and Service www.brentdarden.com
- 3. How can you leverage existing customers into more business?
- 4. “Ancillary” Income by definition • Webster - “secondary, auxiliary, supplemental, additional, incremental. • IHRSA - “revenue from sources other than membership dues and initiation fees.”
- 5. Benchmarking “non-dues” revenue of TYPICAL CLUBS SURVEYED Dues/ Iniation Fees Ancillary Fees 32% 68%
- 6. Benchmarking “non-dues” revenue at TELOS FITNESS CENTER Ancillary Fees Dues/ Initiation Fees 32% 68%
- 7. Clubs have one thing retail businesses crave... Repeat Foot Traffic
- 8. The Impact & Influence of Incremental Sales.
- 9. Increasing revenue per member can pay big dividends. For Example: Total # Members = 3,000 x Additional Revenue Per Member/Per Month of $ 2.00 = $ 6,000 Revenue Per Month
- 10. Increasing revenue per member can pay big dividends. For Example: Total # “Active” Members = 1,800 x Additional Revenue Per Month of $ 10.00 = $ 18,000 Revenue Per Month
- 11. Increasing revenue per member can pay big dividends. For Example: Total Member “Visits” Per Day = 600 x 10% “Upsell” Success = 60 Members x $ 1.50 Additional Revenue Per Visit x 30 Days = $ 2,700 Revenue Per Month
- 12. Generating incremental sales actually helps member retention. “ The more members spend the longer they stay!”
- 13. Member Connections = Member Retention
- 14. Maximizing revenue per member through strategy, sales and service
- 15. Competitive Lodging Industry - Lessons
- 16. Lodging Industry REPVAR Strategy • REV =Revenue • P = Per R E V PA R • A = Available • R = Room
- 17. Generating Incremental Sales • Mini Bar • Convenient Bottled Water • Internet Access • Retail
- 18. Generating Incremental Sales • Pay Per View Movies • Laundry Service • Phone Calls
- 19. Generating Incremental Sales • Fitness Center Usage • Room Service • Gift Shop • Restaurant
- 20. Lessons from Cinema/ Theater Industry Approximately 70% of Gross Revenue is derived from movie tickets Cost of the product is 52% - 55% Profit contribution is approximately 57%
- 21. Lessons from Cinema/ Theater Industry Approximately 30% of Gross Revenue is derived from concessions Cost of the product is 15% - 20% Profit contribution is approximately 43%
- 22. Generating Incremental Sales “Something sweet, something salty, & something else”
- 23. Generating Incremental Sales Suggestive selling works!
- 24. Lessons from the Fast Food Industry “Would you like to supersize that?” Up-selling works!
- 25. Strategic Approach to “Added Value” 2 1 Current Customer Potential Value Adds 3 Opportunity Analysis 4 Delivery System(s)
- 26. Step 1: Define Your Current Customers 1 Current Customers • Characteristics • Demographics • Behavior Trends • Purchasing Patterns
- 27. DEFINING CURRENT CUSTOMERS Re tired St ay at Home Mom Co lle ge St uden ts Business Professionals
- 28. Step 2: 2 Potential Value Adds “What might our members want/ purchase?
- 29. Generating Ancillary Income Through Membership Options TELOS Individual Membership Options: Basic Membership $450 initiation fee $115 per month Performance Membership $450 initiation fee $134 per month Performance Plus Membership $499 initiation fee $285 per month
- 30. Generating Ancillary Income Through Membership Options TELOS PERFORMANCE PLUS Membership: • Unlimited Yoga and Pilates Mat & Tower Classes • $100 credit towards private sessions: – Professional Training – MAT – Private Pilates – Nutrition • Buy one get one free Massage each month ($80 value) • Permanent Kit Locker & Laundry Service ($30 value) • Two meals per month at Caesar’s Café ($20 value) • DFW Society Membership ($42 value) • Four complimentary guest passes each month ($80 value) • Complimentary child care • Complimentary Educational Lectures/Seminars
- 31. Potential Profit Contributors Personal Training • • • • • • Featured Service Professional Trainers Team Concept Systematic Approach Accountability Measures Supportive Culture
- 32. Potential Profit Contributors Group Training • Fee Based • Affordable • Social •
- 33. Potential Profit Contributors Pilates & Yoga • Introductory Offer • Fee Based Program • Membership Option • Private Training • Non-Member Participation • Dedicated Space
- 34. Potential Profit Contributors Spa & Therapy Services • Market Research • Member Demographic • Club Culture • Member & Non-Member Pricing
- 35. Potential Profit Contributors Nutrition • • • • • • Introductory Offer Diet Analysis Resting Metabolic Rate Registered Dietician Nutrition Coach Virtual Consultations
- 36. Potential Profit Contributors Programs • Wellness Programs • Competitions • Social Events • Sponsorship
- 37. Potential Profit Contributors Retail • Nutritional Products • Supplements • Self-Serve • Location
- 38. Potential Profit Contributors Pro Shop • Open/ Entry Space • Limited Selections/ Inventory • “Trunk Shows” • Retail Responsibility
- 39. Potential Profit Contributors Cafe/ Conference Room • Profitability • Juice/ Smoothie Bar • Meeting Space
- 40. Potential Profit Contributors Other Services/ Tenants • Salon • Anti-Aging Medicine • Physical Therapy • Chiropractor • Martial Arts • Shoe Shine • Recreational Groups
- 41. Potential Profit Contributors Possible Add-ons/ Upgrades • • • • Kit Locker Laundry Service Full Locker Executive Locker Room
- 42. Strategic Approach to “Added Value” 1 2 Current Customer 3 Potential Value Adds Opportunity Analysis What makes sense for your club? Why?
- 43. Step 3: 3 • Matches Business Philosophy? Opportunity Analysis • Relevant/ Add Value? • Sizable? • Deliverable? • Profitable?
- 44. Step 3: Opportunity Analysis Calculation 3 Opportunity Analysis Concept: _____________ Potential Customers: _________ Revenue Estimates: customers x price = $ Expense Estimates: - Direct Cost = _____ - Indirect Cost = _____ - Overhead Allocation = _____ Profit Contribution: _________
- 45. Step 3: 3 Opportunity Analysis “choosing what not to do is often more important that choosing what to do.”
- 46. Maximizing revenue per member through strategy, sales and service
- 47. Step 4: • Marketing Channels 4 • Operating Processes Delivery Systems • Accounting Functions • Staffing Responsibilities • Staff Training • Incentive Plans • Overall Service Experience
- 48. Step 4: 4 Delivery Systems You must: Ask for the Business
- 49. Step 4: Delivery Systems “Begin with the end in mind” during the new member enrollment process.
- 51. Step 4: 4 Delivery Systems “One Throat To Choke”
- 52. Maximizing revenue per member through strategy, sales and service
- 53. Know Your Best Customers • Biggest Spenders
- 54. Tale of Two Members John Doe: Profile • Attends 5 times a week • Swims/ Strength Training/ Cardio • Pays monthly dues of $115 • Does not utilize any “services” or spend on “added value” offerings • A “core” member known and enjoyed by staff Total Annual Spent: $1,380
- 55. Tale of Two Members Jane Doe: Profile • • • • Attends 4 - 5 times/ week Personal Trains / Private Pilates Sessions / Therapy Pays monthly dues of $285 Personal Trains 3x/week, Private Pilates 1x/ week, Therapy 2x/ month • Frequently eats in the cafe, occasionally makes Pro-Shop purchases • A “core” member known and enjoyed by staff Total Annual Spent: $32,000
- 56. Know Your Best Customers • Biggest Spenders • Long Term Members • High Attenders
- 57. In the future we must move toward an “Experience Economy”.
- 58. Capitalize on Your Captive Audience
- 59. Maximizing Revenue Per Member Through Strategy, Sales and Service www.brentdarden.com