One Club Operator's Keys to Low Attrition and High Profit Margins

• Published in: Club Industry 2013-09
• Main Author: Allen, Cliff
• Format: Article
• Language: English
• Subjects: Budgets; Business models; Health clubs; Physical fitness; Profit margins
• ISSN: 2150-2692; 2150-2706

Each day, our sales team members focus and execute on the strategies and activities that drive new tours and new membership sales. For example, Biff, our club mascot, joins the sales team daily as they drive through the local communities in the Edge Fitness Patrol Jeep. Biff issues "fitness citation guest passes" to everyone with whom he comes in contact. The profit margin associated with enrolling a new member is much higher than the margins on other line items. Membership mix. The Edge membership model is made up of maintaining 85 percent EFT dues paying members and 15 percent prepaid members. This EFT business model was taught to me by fitness industry veteran Ray Wilson in 1988. Wilson once told me, "EFT will set you free." That statement holds true today. EFT dues are the lifeline to any good health club operation. The profit margin associated with an EFT dues-paying member is the highest profit margin available to a club owner or operator. Great back office. The infrastructure at Edge is built on a solid foundation of management. We have three managers for three areas: membership sales, fitness and operations. The operations manager, Amanda Perlin, was the first person ever hired at Edge. Perlin was 18 years old when we hired her to hand out fliers in our presales trailer in September 2004. She is now 26 years old and is the backbone of the club. She keeps a close eye on account receivables and payables every day. She has learned the business the right way-hands on. Through trial and error, she has learned to manage, measure and drive new business budgets, member retention budgets, payroll budgets, marketing budgets and more.