10 Paths for Increasing
Profitability at Commercial
Climbing Gyms
Joel Graybeal, Managing Partner
Triangle Rock Club
ACCESS SLIDES
DOWNLOAD:
TriangleRockClub.com/CWA17
Email:
[email protected]
Industry Opportunity
•
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200,000 indoor climbing gym memberships in the
USA
55-million health or gym memberships in the USA
BOTTOM LINE: If we convert 1 out of every 275 people in
the USA who has a health or fitness club membership, we
DOUBLE the size of our industry!!
Millennials Facts
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80% have moved not counting college
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59% live in a locale different from their home
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33% have moved at least 3 times
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Of those who have moved, 51% moved for a career
Of those who have moved, 48% moved for a
“lifestyle or experience reason”
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Beliefs
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Every dollar counts
You can’t win at a game if you don’t
keep score
Where you focus your time, money and energy is
where you get your results
The success of your company is determined by
what your senior leadership team gets done
Beliefs (Continued)
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Small inefficiencies in either revenue or expenses
that are repeated over time become very costly.
If you don’t have at least 5% of your customers
constantly complaining about your pricing, you’re
not charging enough.
Profit Challenge:
Grow Revenue Faster than Expenses
4
3.5
3
2.5
Revenue
Expenses
2
1.5
1
0.5
0
2017
2018
2019
2020
#1: Understand Which
Revenue Streams Are
Most Profitable
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Revenue
Expenses
Profit
ACTION ITEM #1
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Have your senior management team prioritize
where you should invest your time and money
in growing which revenue streams first
Do some rough math on calculating the
incremental profit impact of adding $1000
to your major revenue streams
#2 – Raise Your Prices
a Minimum of Once a Year
ACTION ITEM #2
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Select a day later in 2017 to analyze all the sales
and margin numbers for all of your products and
services.
•
Make decisions on your price increases
•
Build an implementation plan including a schedule
#3 – Fully Implement
E-Commerce
E-Commerce Sales as % of Total Sales
16
14
12
10
8
E-Commerce Sales as %
of Total Sales
6
4
2
0
2014
2015
2016
2017
ACTION ITEM #3
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Take inventory of everything you can offer to sell
online and figure out ways to let your customers
buy from you 24/7.
Bonus: Be sure to use the RGP feature where
members can “charge” to their account
#4 – Improve the Lifetime
Value of a Membership
What To Increase:
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Increase number of new customers
Increase conversion rate of new
customers to members
Increase length of average membership
Increase the number of member referrals
per member
Increase retention
Increase average price per member per
month
Increase average member spend per month
Net Promoter Score
“On a scale of 0 to 10, how likely are you to
recommend this company’s product or service to a
friend or a colleague?”
ACTION ITEM #4
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Take inventory of your member benefits
to smartly enhance the value proposition
of membership to your gym.
Invest in retention efforts to keep members longer
#5 – Add Incremental Income
at Low-Use Times
at Your Facility
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Holiday/Summer camps
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Public/private school visits
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Homeschool visits
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Discounted day passes
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YMCAs
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Girl/Boy Scouts
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Lock-Ins
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Private Events/PTA fundraisers
ACTION ITEM #5
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Brainstorm ways to use the facility during
low demand hours and build/execute plan
to reach out to potential user groups.
#6 – Become a Sales Organization
Characteristics of companies with great sales cultures:
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Data driven mindset
Constant and never ending improvement
Agility and flexibility
Transparency across all levels
Healthy competition
Customer obsession
Common vision
ACTION ITEMS #6
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Get a hold of Shad’s presentation about sales
Identify your lowest effort highest impact sales
opportunities.
Brainstorm weekly on how to capitalize on sales
opportunities
Track your results
#7 – Renegotiate/Bid
Recurring Expenses
ACTION ITEMS #7
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Gather up all of your recurring bills and
order from highest to lowest on where you
think you might be able get the biggest savings
Get bids from new providers and give your
existing providers an opportunity to reduce their ongoing
fee.
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BONUS – Audit All Bills
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DOUBLE BONUS – Have more than one bank!
#8 – Manage Employee Expenses
ACTION ITEMS #8
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Build an organization chart with defined job
descriptions and defined pay schedules
Initiate an annual contributions and compensation
review process for at least your full time team
Audit your payroll records biweekly
Track your employee expenses as a % of total
revenue
#9 – Have AND Know
Your Numbers
ACTION ITEMS #9
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Run timely monthly financials
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Track key performance indicators
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Educate/share with company leaders who can most influence
your financial results
Review as a team monthly so there’s an ongoing dialogue about
opportunities for increasing income/decreasing expenses.
BONUS – Gyms with multiple locations should
keep separate P/Ls on each facility with a
corporate expense allocation
#10 – Build Yearly Calendar
+ Schedule Important Tasks
ACTION ITEMS #10
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Gather senior team to agree upon what tasks need
to be repeated
Start with the longer term strategic tasks like
yearly goals
Begin drilling down into quarterly, monthly, and
weekly goals
Build a culture of disciplined planning and action
ACCESS SLIDES
DOWNLOAD:
TriangleRockClub.com/CWA17
Email:
[email protected]