The majority of our public, young and old, is aware of the benefits of living a healthy lifestyle and the need to exercise and get active. The message is out, and people are slowly becoming convinced to begin a physical activity program. Unfortunately, it usually takes a life-changing event to start this process and, more importantly, to continue for a lifetime. The group most ready to buy your services is most likely the "baby boomers." Many of these people are first-time fitness center users, and unless they were athletes, they may be first-time exercisers also. However, their next question is, "where do I go for these services?"
I recently relocated to a new city. As many of you can relate, I immediately began to receive the usual barrage of junk mail and advertisements of all of the typical companies and industries such as banking, dry cleaners, grocery stores, pizza stores, restaurants, automobile dealerships, and fitness centers. I received an unusual amount of direct mail pieces from several local and national chain fitness centers. What was interesting was that many of the direct mail pieces were very similar to each other. These similarities included the design of the mail piece, the pictures used, and the discounts and amenities offered by the fitness center. I believe that there was an unusually high amount of direct marketing pieces because a new facility had just been built in close proximity to several other fitness facilities. The local competition comprised not only of these fitness centers but also a well-established community center that offers aquatics and fitness services. These facilities are all within a 10-mile radius. While reading this mail, I asked myself, "Where would I visit?"
Recently, I attended a leadership retreat in which the keynote speaker talked about the importance of relationship management of our patients in the health-care industry. His reasoning was that this is the differentiation factor between health-care organizations. Health care is becoming a commodity. Just observe the advertisements and marketing of health-care organizations: if ABC organization offers a new technology or service, in many instances, it won't be long before the XYZ organization across town offers the same service or technology.
The name of the game is sales and numbers. The more prospects that walk through your doors, the more likely you will be able to convert them to members and obtain your goals. The health-care environment is becoming increasingly competitive, and the pressure to sell memberships to fill your facilities and to sell your related health-care and retail services has become a point of emphasis. What is particularly unique in the health-care setting is the ability to cross-promote and sell other health-care services offered by your organization or through outside relationships to your members. Health-care administrators recognize this and understand that this can be a unique marketing strategy for the medical fitness center and their organization.
At the new facility where I am employed, I receive letters from a variety of marketing firms asking us to use their services to design direct mail marketing pieces that will increase sales by "X" amount of sales or dollars. Sounds great, but these are the same firms that also are servicing the other commercial centers that may be your competition. Can you expect marketing with differentiation when using template programs and receive the results you need and expect? Unfortunately, this article may cause you to ask more questions about your marketing strategies than provide answers. It certainly caused me to ask a lot of questions about my past marketing experiences and look forward to my next year's marketing plan.
To help answer my questions, I reviewed sales articles and books dealing with sales in the sports industry. You may ask yourself why I selected books dealing with the sports industry. The answer is very simple, pro sports teams especially the minor leagues depend on ticket sales much the same way we depend on membership sales. In my attempt to think outside the box, I wanted to examine how a successful sports marketer approached the strategy of ticket sales. After examining these articles and books on sales, I began to reflect on my past experiences of consumer choices, and I questioned others about how they chose which fitness facilities and services to purchase. This process led me to ask the following questions:
- How can consumers decide which facility to visit when the amenities and pricing are similar; the location is not a factor; and the facilities have equally good reputations?
- How can I encourage my target market to come through my door first?
- What unique marketing campaign will drive members through my door?
- Do I have a separate marketing plan to sell value-related services once members enter the facility?
MARKETING CHANGES IN THE 21st CENTURY
Jamie McCann, executive senior partner for the Lucas Group in Irvine, CA, states in an article published in the Wall Street Journal (1), "More product variations, greater competition, and an increasingly savvy and demanding consumer-coupled with an increasing number of platforms from which to reach out to them-have made it harder than ever to win customer attention, and a sale."
The article, "Increased Collaboration Helps Sales and Marketers Get Closer to the Customer," goes further to explain how traditional marketing is being supplemented with greater frequency by "alternative marketing techniques." New terms and techniques, such as viral marketing and guerilla marketing, are gaining popularity and have the attention of marketing professionals.
New technology has provided marketing professionals with many new platforms to both choose from and monitor the competition. The World Wide Web has been the main driver behind this superhighway of information and immediate feedback (1).
The marketing function is changing significantly because of a variety of reasons. These outside pressures include but are not limited to the following (2):
- increased globalization of markets
- new technology and advances in telecommunications and the World Wide Web
- extensive information databases
- redesigned organizational structures; mergers, acquisitions, joint ventures and other alliances formed
- product maturity
MULTILEVEL MARKETING ENVIRONMENTS
As you can see, marketing strategies are much more than just the advertising and promotions for the "Four Ps" of marketing (product, price, place, and promotions). Marketing is a multilevel environment starting with the customer at the core and the other layers expanding outward (2).
Marketing, while starting with the customer, expands outward to include the global marketplace. It is beyond the scope of this article to go into the details of each environment; however, it is obvious how each has its place in the marketing strategy. Marketing has evolved from selling commodities to products, to service, and now to marketing relationship management.
DIFFERENTIATION IN MARKETING
After reviewing the complexities of the marketing environment, there is still one simple goal and question, "How do I get people to walk through my door?" To assist us with this question, I turned to an industry that lives by ticket sales and encouraging people through the front door/gate. I reviewed the techniques displayed within the industry of sports marketing and of one of the most respected people in the field of sports marketing, Jon Spoelstra.
To differentiate marketing techniques, we need to think outside the proverbial traditional marketing box. This may be very difficult or impossible for some organizations. With this in mind, if you are not able to use these techniques with your sales promotions, you may be able to market some of your internal services with these techniques.
This next section will review a few of Mr. Spoelstra's marketing strategies. With a book title of Ice to the Eskimos: How to Market a Product Nobody Wants (3), how can you not jump-start your creativity? Mr. Spoelstra refers to his strategies as ground rules within his book, and I will follow his example in the terminology within this article.
MARKETING STRATEGIES TO JUMP-START YOUR BUSINESS
There are many successful and proven strategies and examples to enhance the sales efforts of products and services described in Mr. Spoelstra's book, Ice to the Eskimos (3). I have selected a few of his cornerstone strategies and ground rules that can have an immediate impact in your sales efforts and business functions and provided some fitness-related examples.
Don't fool yourself into thinking you're somebody else
This is a mistake that many organizations make. You need to understand who you are, what your core business is, and who your target market is. Do not fall into the trap of "that's what was done before."
Identify a market where you can win (3). "What attribute of your product/service can give you something to market (3)?" Attributes could be your professional staff, your facilities, the branding of your hospital, or relationships with other physicians or health-care professionals.
Increase the frequency of purchases by your customers
This strategy encourages you to personally ask each present member to buy more services (3). This can be accomplished by knowing the member utilization, their purchasing habits, and the needs and interests of your members. Your membership database is referred to as the "quick-fix silver bullet." According to Mr. Spoelstra, "Increasing the frequency of purchases by customers is the best and most efficient way of building a business" (3). It is vital to develop a database of your members and member prospects. This will enable you to increase your business.
Only try to sell a product that the customer wants to buy
This was the main ground rule to jump-starting your business. There are two simple rules to this ground rule (3).
- Only try to sell a product that the customer wants to buy.
- Try to sell the customer just a little bit more than they want to buy.
However, when selling them a little more, avoid the "bait-n-switch" tactic. You want to avoid buyer's remorse at a later date. Within our industry, there are products and services that can be value added and assist the member in obtaining their goal(s) in a more productive approach. An example would be a simple referral for a registered dietitian if they have interest in weight loss.
There is a three-prong effect of a successful jump-start. These benefits are as follows (3):
- Sales will increase. Putting all of your energy into products/services that your members want to purchase.
- Customers are happy. Members are getting what they want, and a happy member is a repeat customer. This will most likely increase their value in other areas of service. This increases the ability to cross-promote other products/services.
- Can-do swagger. Morale will be high. Success breeds success in other areas. This includes the motivation of employees to be more successful.
Success creates success. Mr. Spoelstra tells a story explaining this when he was with the New Jersey Nets before their on-court success. He stated while creating sell-outs in certain ticket packages that their overall attendance began to increase. "When the perception started to get around New Jersey that the games were selling out, it became socially acceptable for fans to attend other games (3)."
Get the feel for jump-start marketing outside the ivory tower
Ed Gelsthorpe, president of Gillette in the mid-1970s, was asked why he didn't partake in the perks associated with his position. His comment was "I need a lifeline to observing people-our customers. I need to hear people-our customers-talk. I need to be around people" (3). That is why he took the bus rather than being chauffeured.
Mr. Spoelstra was asked to be on the board of directors of a large retail chain. He asked the chairman why him, and the chairman quickly responded, "Our board is mostly financial types. We need marketing (3)." While he was on the board, he regularly walked the floors of the stores and their competitors. He stated that he needed to get the feel of retail, and the only way he knew how to do that was to go where the customers were to "listen, hear, and feel" (3).
Here are a few suggestions to bring the top management down to the customer (3).
- Answer your own phone.
- Take all of the tough complaints. The people at the top need to take the tough complaints. With any business, there seems to be a small minority of people who are the customer that employees love to hate. He refers to them as the "Three Percenters." He states that these small groups of people are valuable marketing tools. They will tell you what is wrong and what it will take to please them.
- No special perks.
- Forcing closeness with the customer. He refers to this as "working the game." This is easily done by just working out at your facility and using the locker rooms so that you hear everything about the customer's experience.
- Buy your own product/service.
Only target people who are interested in your product
This strategy also is referred to as "marketing to a segment of one." There are two questions when marketing to a segment of one: (1) what is the ratio? and (2) what lists did you use to mail the brochures?
The revenue divided by the cost equals the ratio. Basically, you are going to determine the cause and effect of this marketing strategy. This can create a benchmark metric to aid you in determining cost-effective marketing for your facility.
When using a list to market to a segment of one, what are the parameters in determining the interest of your target group? This list should exhibit a history of the customer's interest in your product/service. The marketing piece should convey the tone as if you are talking to a friend. Using names in the piece will help personalize it.
Make it too good of a deal on purpose
There are three paths to choose from (3): (1) keep lowering the price, (2) increase the value, and (3) lower the price and increase the value.
Keep lowering the price is the most common way of making deals. "For this method to be successful, the product/service needs to be perceived as good at the original price (3)." Our industry does this a lot with the packaging or bundling of services such as personal training or discounting the assessment fees during the initial enrollment.
Increasing the value is usually the better route. To increase the perception of value and receive results quickly, borrow the value of another product/service and attach it to the original product/service (3). An example would be not to discount a body composition test but bundle it with a nutrition consult and/or a personal training session to create a higher value on the service.
Lowering the price and increasing the value are usually a sign of desperate times, and you should avoid this technique if at all possible.
Proactive organizations will have their marketing strategies outlined for the year. Executing a plan hopefully will create a successful year of growth and prosperity. Besides member promotions, do not neglect the marketing efforts for other services offered to members and guests. Facilities should have a goal for revenue-other than membership dues-greater than 20%. Be creative and bundle services to add value with services rather than discounting by packaging multiple visits. Many of the ground rules discussed within this article also will assist in front-line management objectives.
CONDENSED VERSION AND BOTTOM LINE
Most people know they should exercise. When they do decide to make a choice, how will they decide where to go? There are many marketing platforms to choose from. How do you differentiate your marketing efforts from your competition? Utilize a few of the strategies borrowed from the sports marketing industry to create successful outcomes to know your target market and to create successful sales.