When planning your annual promotions it is a good idea to have some reactive promotions available as part of the planning process.
- What is a short term membership promotion?
Examples include 7 day passes, 1 month for $30 and such like. Any type of promotion that does not require the customer to purchase a full membership.
- Are short term membership promotions effective?
It depends on how they are being used. 7 day passes can work effectively if they are well managed and used according to the business strategy. For example; private gyms will often use “Free 7 Day Trials” as a tool for customers to “try before they buy” and this is a good tool for private gyms because they do not have casual entry fees like local government. Private gyms also have sales staff that work on commission. Therefore, the sales reps will work those leads until they are told to remove the prospects details from their database! Try it for yourself, sign up for a 7 day pass at a private gym, see how many emails and calls you receive over the coming weeks!
However, local government gyms rarely have dedicated sales staff and if they do they are highly unlikely to be receiving any kind of commission. Plus customers of leisure centres can already “try before they buy” because casual fees exist. That’s not to say 7 day passes never have a place in leisure centres because they do. One of the most effective Refer a Friend campaigns I have implemented uses 7 day passes, because once again, local government can not use harsh sales tactics like contacting members friends directly as this violates privacy laws so leisure centres have to think beyond the obvious for lead generation.
So, that’s 7 day passes, but what about one month, two or three month “cheap” membership promotions?
There is much speculation that these campaigns “work” because they are well received by customers. No doubt that they are well received. Customers of course will want a cheap deal. However, it is important to look beyond the obvious statistics of how many of these promotional memberships were sold. Other factors must be considered such as:
–Timing – January/February are the most notorious months for good membership sales. Is a promotion of this type necessary?
–Membership Revenue – what effect is this going to have on your membership income trends, targets, budget and stability?
– Normal sales – What effect does this have on the memberships you would have received without the promotion? For example if you ran a 1 month $30 membership during January and this is one of the busiest months for memberships how many new customers will purchase a full membership in January?
– Selling twice – you’ve carried out the communications of this promotion and people are buying the $30 offer. Great! However, you now need the resources to “sell again” as you need to convert them to full members.
– Customer expectation – If customers become familiar with this type of promotion they will wait for it. This has an impact on your sales. Some customers will go as far as cancelling their membership and re-joining so they can have one month at a substantially lower price.
–Devaluing your product – so you provide great service, membership packages and environment; so why offer a cheap promotion that customers can walk away from? Don’t devalue your product. Leisure centres are notorious for having some of the best customer service in the industry. We might need a bit of work in terms of staffing structures so we have dedicated membership teams, but customer service, we know it!
– Overcrowding – current members can become very disgruntled if their gym and classes are full of short term/promo members. Be aware of the high level of traffic some short promotions can bring.
In summary, there is a place for short term promotions, but they need to be well planned and questions need to be asked as to whether they are effective, because remember, they will alter your membership budget and trends and more often than not, have a negative impact on income – I have removed short term memberships and short term promotions from various programs in the past and have always seen a more stable, predictable and most importantly, upward trend in sales figures and income.
- So when is there a time for short term promotions?
Short term promotions are great for reactive campaigns or for the launch of a new service, improved program or a facility upgrade/opening.
- What about fitness challenges and personal training?
These are totally different products. Short term options should 100% be available to these type of products. For ideas or to book a review of how these products can be financially viable and profitable get in touch!
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