A Value Proposition:
Focus On Your Personal Training Department
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There are approximately 54 million health club members in the United States, of which about 13% of them, or roughly 7 million club members, are signed up for sessions with a personal trainer. That's a collective 13% across the entire U.S. health club sector. What percentage of your club members take advantage of personal training services? And, what does it mean to you?
Over 80% of profitable health clubs offer personal training services. Consider this against other non-dues revenue streams. Take a juice bar, for example. With proper planning and execution, operating a juice bar can be extremely profitable. But, like any new endeavor, you are best serving the project when you start with learning (specific to operating expenses and potential ROI) based on the experiences of those who have successfully taken on the same venture. Do your research; don't go on a hunch. Whether utilizing local stats or a colleague's personal experiences, learn from the knowledge of what's working in club businesses in your area. Compare your profit sources to those of other successful clubs. Always ask if this service is, or can become, a core competency within your business. Can you do it well, or better, than someone else is already doing it?
Personal training is no doubt a tremendous profit prospect, but it has to be implemented and managed properly. Though very different challenges exist inside a personal training department versus the establishment of a juice bar, from a very high level, we can say that the "popularity" of both among members is fairly similar. So, when comparing and/or considering value-add, non-dues services, what's the most important aspect to consider? Your Return On Investment potential. Assume that the implementation of this service is a consideration in your club at this stage, or perhaps, it is an area that could use improvement or it may be time to look at the ground floor of it. Your ROI can be a projected estimate as an expectation of profits based on cost of investment, price points and profit margins, as well as a research-based "Penetration Level" (which, in this case, is a ratio of personal training consumers to the number of total club members). When projecting these figures, you may find that potential ROI with personal training services yields a much greater ROI than most other non-dues profit sources.
More than 50% of clubs that use personal training services report this as being one of their most profitable offerings, accounting for approximately 10-15% of non-dues revenue. Personal training start-up costs and ongoing expenses are generally lower than that of other non-dues services... with a profit margin per consumer that is generally much higher. But, after taking on the initial investment and implementing personal training services in your club, you must consider some significant trade-offs to secure the success of your personal training department. Successfully managing human capital is as important a consideration to potential profitability as is the initial investment. A juice bar, again for example, represents more of a turnkey-style business that, upon its construction, is ready for immediate use and requires a limited amount of involvement... but that's not the case for personal training. Personal training may require less initial start-up cost than say, building and staffing a juice bar, but be prepared for costs that come on the backend of this venture if not managed properly. People and processes are your keys to success with a personal training department.
On the average, 5% of club members use personal training services. Sure, there are clubs that have penetration levels of 10-25% for PT, certainly not unheard of, and that is a testament to a properly executed and well managed PT Department/Director. But, more typically, about 90% of health club members aren't taking advantage of personal training services, and even still, more than 50% of profitable clubs claim that it is the most profitable offering in their facility. Imagine then if your penetration level for PT service was above 10%. How would that impact your bottom line? The key target audience is right there in your club. Members are walking through your door and are already using your facility; the right kind of marketing to capture their attention for PT services will work as long as there's follow through, which goes back to the key ingredients: people and processes. The good news is there's room for growth! What's the gentle nudge that your members need to seal the PT deal? Better yet, what's your strategy for member retention and new member sign-ups... both of which impact the profitability of your training department.
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