It’s all a matter of striking the correct balance between the short-term benefits of a direct response marketing and long-term brand building.
When building a health club brand, direct response and brand investment are both essential for your long term dominance. But many clubs struggle with striking the proper balance.
Over the years, I have seen the extreme ends of both. Now, obviously, the availability of capital is what ultimately determines which path a health club takes. If the capital is there and the gym has quality equipment, services and staff, long term brand advertising is the obvious path to success.
That being said, from time to time, even the most successful gyms benefit from the cash infusion direct response provides. When executed properly, direct response has always provided the best and most efficient ROI in the health club industry. In knowing this, many clubs have opted for this quick buck route of direct– and overused it.
So take it from a seasoned industry consultant:
Direct response or price pointing only works until it doesn’t. If your health club relies on it to heavily, your market will inevitably begin to show signs of fatigue. Like all quick fixes in business, it’s best used in moderation.
In what seems like a long time ago…
I was just a young 24 year old pup and the year was 2001. I had a ton of ambition and the world was my oyster. I thought I could do no wrong and always assumed my decisions were the right ones. I started out with an idea of running my own promotion company and landed one of my first huge health club clients. It was an huge 25k square foot, monster of a club in a town that looked perfect on paper.
I will never forget the feeling I had as I made that long drive down there: the nerves, the fear, the excitement, the anxiety, the phone calls from friends and family congratulating me, the pressure. It’s one of those still frames you have permanently imbedded in your mind and always wish you could relive.
The club owner was young and ambitious. We were at the same places in our lives. He had just signed the lease to take over the club with a personal guarantee after managing it for a couple years. The gym advertising campaign ended up being a success. I recall we ended up doing $130,000 in sales in 17 production days. Slaps on the back and a big see you next year were how we parted ways. Only the next time he called to run a campaign wasn’t a year later. It was just six months later.
Now to be completely honest I was terrified of doing it. Taking a $7,000 risk at a club you just promoted six months prior always requires a decent sized shot of Pepto. Against my better judgment, I took the contract.
We ended up doing okay, though. This time we did around $100,000 or so. It continued on like that for years. Every time the gross sales would take a 20-30% hair cut. Finally, one year the sales dwindled to the point we had to change things up. We used a substancially greater price point on the full use option and lowered the cost of entry to give the gross sales a boost.
We still got about 20% fewer members than we did the prior promotion but at $600-$700 a pop for two year contracts, we ended up grossing around $50,000. But I wasn’t all that comfortable using those tactics. It was final promotion I ever ran for my client.
During those fruitful years he never remodeled, put in new carpet, bought a new piece of equipment (I think he may have bought a couple used treadmills at one point), painted the walls, or added a new aerobics class. He never ran a testimonial spot on TV and never did any billboards. There were no custom membership cards and no radio. In short: nothing to improve his brand image.
My former client went on to try out almost every other health club marketing company in the business, but with little or no success. He continued to experience the same downward trend line in sales.
Do you know how that club is doing today? It’s now a thriving vacant building. The former club owner/ building owner/landlord to this day is unable to lease it out; equipment and all. My old good pal has become wiser over the years and today owns a very successful club around the same area. We still keep in touch from time to time, spitballing back and forth about the good ole days.
Anyways the point of the story is to show you the hazards of relying on direct response advertising too heavily. I would be lying if I told you this was an isolated instance. Truth be told, in my 13 year tenure at the helm of United Fitness Marketing, I have witnessed more clubs head down this slope than I care to count.
If you use direct response, make sure you are using those funds to make improvements to your gym. Buy a new piece of cardio equipment or add an aerobics class, for example. Show the community you are in it for the long haul. Balance your advertising out. Purchase some local cable spots and run a testimonials ad with your most loyal members. Put your members on the radio and let them tell the world why your gym rocks.
While direct response marketing will always be king, a good balance is essential in ensuring your club’s long term success. Not everything has to pay off immediately, sometimes good things take time.