Marketing Tip of the Month
Use the Commercial Real Estate Crisis to your Club's Advantage.
Don't think there are any positives to come out of the current mess in the economy? Think again.
One of the recent shoes to drop during this recession has been the dramatic deterioration of the commercial real estate market. As the economy drives more businesses to the brink of collapse the commercial leasing market continues to soften. Landlords and REITS (Real Estate Investment Trusts) are facing high vacancy rates and decreasing cash flows. Sharp club owners are using this weakness in the commercial leasing market to their benefit.
Membership sales may be slower than usual causing the top line of the balance sheet to suffer but cutting expenses and running a more streamlined operation may actually improve your club's bottom line. If your like most club owners, your lease payment is most likely your biggest expense. How about renegotiate your lease to make up for your slower membership sales and higher attrition rates?
The current state of the economy is bringing club owners and landlords back to the bargaining table. If you signed your lease 2-4 years ago you are most likely paying higher than market rates for your space. As you are aiming to cut expenses, chances are your landlord is trying to retain tenants in order to improve cash flow and improve chances of refinancing. Why not approach your landlord and create a win-win situation for everyone?
One way to lower your lease payments is to offer a longer term extension on your current lease. In return for securing a longer term tenant during a time of rising vacancies perhaps your landlord will adjust your rent to current market rates. The last thing a landlord wants right now is another vacant store front.
I recently talked to a club owner that got his $16,000 per month rent lowered $3,200 per month- the equivalent to him signing up 105 new EFT members. He signed a 10 year extension, which was far longer than his previous renewals, but he was planning on staying there anyways.
The current market for commercial leases is finally giving an upperhand to tenants during the negotiation process. HLM just did a promotion for a club that expanded from 20,000 sqft to 35,000 sqft. The landlord was so happy to fill the additional 15,000 sqft space next to the club that he offered generous build-out terms and rent rates that were comparable to what was offered in year 2000.
Lease renegotiations have a high chance of success in a soft commercial leasing market. You might as well try to turn a negative in the economy into a positive for your club. The worst that can happen is you keep your current lease terms.
P.S. Call today to reserve your risk free EFT or cash membership campaign. We currently are adding clubs to our waiting list on a first come, first serve basis.
Can You Hear Me Now?
Ok, so we've all seen those Verizon Wireless commercials with the nerdy guy with the glasses advertising the Friends & Family Plan. (and no I'm not that nerdy guy!). Well, over the past few months HLM has been getting lots of calls from club owners saying that their walk in traffic has stalled. Here's an idea.
April is Friends & Family Month at your club. Once a week during the month of April your members are allowed to bring up to 2 friends or family guests per visit. You post some flyers around the club and tell your members about the weekly Friends & Family night as they exit. Club owners that have listened to our previous marketing tips have already built an email list of current members which will be an even more effective method of spreading the word!
Here's how it works. Members are allowed to bring up to 2 guest each week on Tuesday during April at no charge. The guest must sign into a guest register with their name, address, phone number and email. The sales consultant will introduce them to the club by giving a tour and qualifying the prospect. During the tour the sales consultant explains to the prospect that if they enjoy the club and sign up before the end of the month that they will get their first month free (or no enrollment, etc).
If your club has 1,000 active members and 20 percent participate by bringing in 1 guest during the month you've just landed 200 new prospects for doing pretty much nothing! If your sales consultant follows up and closes 10 percent of those you just landed 20 new members without spending a single dime on advertising.
The whole key to getting a high participation from your current members is to offer them something in return. It could be a free months dues or a 30 minute PT session. Remember the member only gets the free month if you get a new paying member.
Your members will love working out with their friends family and all of the sudden your walk in traffic is back. Can you hear me now!
P.S don't forget to check out our new site at www.hlmpromo.com
Sincerely,
Jeff Bevacqua
HLM
877.455.8343 ext 701
