Education Can Generate Revenue

by Tracy L. Morgan on Mar 01, 2002

Supporting education for employees may translate to a fatter bottom line for your facility.

The basic premise of education lies in its ability to empower the learner to change behaviors or improve current practices. From formal schooling to continuing education, the purpose of gaining knowledge and information is to perform a new behavior, or improve on an existing one.

Using education as a tool to generate revenue is increasing in popularity throughout various industries. It is theorized that education directly related to one’s roles and responsibilities at work will help fulfill the needs of both customers and the company’s mission and profit goals, thus increasing market share and revenue. Motorola, Ritz-Carlton and Disney all have cited education and training as a significant contributor to their current financial successes.

While individuals within the fitness industry commonly pursue continuing education, it has yet to be adopted universally as a revenue generating instrument within health clubs and facilities. Traditionally, personal trainers, group exercise instructors and other fitness leaders seek education independently and apply it in the same manner. Education providers profit directly, but fitness facility managers often fail to see how they can directly benefit from more educated employees since the results of education can be difficult to measure.

Research has shown, however, that education efforts can increase profitability, employee performance, retention and job satisfaction, as well as stock valuations. In the fitness industry, education can positively affect revenue through increased membership sales, membership retention and programming, while simultaneously reducing costs by increasing staff retention rates.

Create a Strategy

The first step in reaping the benefits of education is to support the educational efforts of your employees. Staff often need funding and more flexible schedules to pursue education. Also, management should commit to implementing the ideas that result from employees’ newly gained knowledge. The second step is to determine your strategy of support so that profitability is realized. Following are a few actions that will help you in this process.

  • Tie Education to Your Profitability Goals. Educational efforts should be aimed at the revenue and profit goals for the year. If your organization is relying on an increase in membership sales for the year, think about sales training.

  • Take Advantage of the Most Obvious Opportunities. Are membership sales lower than goal? Are poor customer service policies affecting your bottom line? Focusing educational efforts on areas in which improvements can be realized immediately is the easiest way to begin using education efficiently.

  • Determine Your Criteria for Support. You may want to require that your employees work for you a minimum length of time, or that they achieve a particular milestone before you agree to support their education efforts. Partial financial support may be warranted until improvements in performance are realized. Whatever your criteria, be sure it relates specifically to the needs and goals of your facility. And to avoid any confusion, make certain your staff understands both the criteria and company goals before moving ahead.

  • Require Results. The most important part of this education equation is the change in behavior or performance, which leads to improved profitability. Ensure that the knowledge, information or skill that your employee obtains benefits your bottom line.

Consider requiring employees to create an action plan, detailing how the educational event will benefit your facility. Perhaps it is creating a new program, or increasing personal training revenue or selling more memberships. Whatever the goal, hold the employee responsible for achieving it and support the follow-through process.

Applying Education

You will not see increased revenue and profitability from education until the education is put into action. Consider the following options for applying the effects of education.

  • Improve Current Practices. Customer service policies, marketing and sales strategies, programming decisions and recruitment are just a few areas that can affect profitability. Often, improving one area can positively influence another by reducing costs or generating revenue.

  • Improve Programming Options. Obtaining education may allow you to offer a program or service that is in high demand by members; or instructors may create a totally new program or service that meets specific members’ needs.

  • Introduce New Methods. Orientations, testing, exercise protocols and membership options are fairly routine and similar throughout the industry. Perhaps you can implement new methods that will lead to increased profitability.

  • Reward Your Employees. Traditionally, fitness instructors and trainers have earned reputations as ambitious seekers of knowledge and skill. While they crave to better themselves, they also are looking for the financial benefits that education will have on their salaries and commissions. You may be able to retain talented and educated employees by not only supporting their educational efforts, but by rewarding them for those efforts. Increased pay rates, promotions, bonuses and vacation time are just a few examples of potential rewards.

The Final Step

It is important to evaluate the results education has on your facility. Keep track of how education affects not only your profit margins, but your expenses, staff performance, job satisfaction and member retention. Feedback from members and employees will help gauge progress and future efforts.

IDEA Fitness Manager, Volume 14, Issue 2

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About the Author

Tracy L. Morgan IDEA Author/Presenter