Why selling session packages may be preventing business growth.
The 2010 IDEA Personal Training Programs & Equipment Trends report found that approximately 75% of respondents ask clients to pay for individual sessions/classes or packages of sessions/classes. Some fitness professionals suggest this business model should become a thing of the past. “When you sell ‘packages’ of sessions, you’re chasing money and not building projectable income for yourself,” warns Troy Fontana, CEO of Freedom Fitness Unlimited in Sparks, Nevada. “The only security you have is the six, 12 or 20 sessions your client just purchased. What happens if this client leaves on vacation for 3 weeks? You don’t make any income from them. Does this sound ideal?”
Instead, Fontana recommends adopting a different business model: personal training memberships.
The Problem With Packages
Packages have two main disadvantages:
Unstable Cash Flow. Fontana’s concerns are very real. Training session hiatuses or cancellations due to holidays, vacations or other reasons tend to result in a dip in cash flow. “This forces the personal trainer to constantly be looking out for new clients, as well as thinking of how to best re-sign the current ones,” says Fontana. He warns that this system can lead even the most highly qualified trainers toward career burnout.
“As owners, selling packages typically follows the renewal cycle,” says Vito La Fata, owner of Fitness Evolution in Laguna Hills, California. “We bring in money one month and go dry the next.”
Limited Client Dedication. La Fata argues that the package model can stand in the way of client success. “First, there’s the possibility of losing out on business because many prospective buyers cannot afford to lay down $3,000 for a package,” he says. And those who do purchase a package tend to be shortsighted. “Often, a client will complete a package, take a break and then the trainer has to chase him down.”
Fontana finds that it all boils down to customer service. “When you’re chasing money and allowing clients to cancel whenever and fail to be consistent with their workouts, what kind of service are you providing? Is that really the most effective situation?” he asks.
Personal Training Memberships
To address these issues, Fontana and La Fata have implemented what Fontana calls personal training memberships. They work much like a fitness facility membership: the client agrees to a specific time frame for training (e.g., 3 or 6 months), a payment plan is devised and a contract is signed. In most cases clients opt for a regular automatic debit or electronic funds transfer to pay for services. The personal trainer and client determine a schedule, which might include a set number of one-on-one, semiprivate or group sessions per week or month. If a client needs to cancel, he can simply make up the session later in the chosen program’s time frame.
The Membership Advantage
“When I first heard about it, I wished I’d known about it earlier,” says Sharon Johnson, owner of StudioFit in College Station, Texas. “It’s been about 8 months, and it’s been great,” she says. “For one, it helps the client know how much he needs to pay per month. On the business side, [memberships] help stabilize revenue.” Fontana and La Fata echo Johnson’s sentiments. “We are really trying to make training affordable on a lifestyle level; it’s not a short-term process,” La Fata states. “I can’t guarantee that a client will achieve results in 12 sessions. Fitness needs to be a part of our whole life.”
Each business owner has the option to create programs based on needs and services available. For example, Johnson offers unlimited access to small-group training for $175 per month. Classes are held several times a day and participation is limited, so clients are encouraged to reserve a spot online. La Fata offers several options, which include a mix of one-on-one, semiprivate and group options. At Fitness Evolution, a client can choose a group-coaching-only membership; an “all access” membership that includes unlimited group coaching and one semiprivate session per week; or an “elite” membership, which includes an additional semiprivate session per week. Depending upon the chosen membership, La Fata also offers program design, unlimited fitness facility use and more. The more individual services in the program, the greater the cost.
At Fontana Fitness, details such as program duration, payment plan and method, all factor into the cost. For instance, a client who insists on paying month-to-month pays a slightly higher rate, he suggests. “This makes it more difficult to collect payment and does not show any long-term commitment.” A client who chooses a longer-length program and automatic billing garners a slight price reduction. “This type of client will prove to be the lifeline of your business and will create projectable and stable income.” Fontana, who has seen a 35% decrease in annual dropout rates since adopting the membership model, also requires a 30-day notice for cancellation of services.
Going Group. All three trainers base their memberships on semiprivate, small- and large-group options. They reserve one-on-one training sessions only for those who need or specifically request the extra attention. At LaFata's facility, large groups are capped at 12 participants; small groups include two to four people. The majority of Johnson’s clientele participates in small-group options and can choose from specific programs such as TRX®, Gravity®, traditional strength and conditioning and more. Johnson finds that small-group training is a benefit to both trainer and client. “I’m the only personal fitness trainer here, which makes it difficult to service a whole lot of people,” she says. Johnson admits that some are initially hesitant at the thought of joining a group, but they eventually realize its value. “When people come to see me, they think they want one-on-one training. But when they try the group options, they find they enjoy it more. It creates greater accountability and is more fun. I’ve noticed that clients become friends and even exercise together outside the studio.”
La Fata concurs. “From a business standpoint, it just makes sense. In order to increase revenue you have to hire more trainers. Small-group training options are great because one trainer can help more people. If I do only one-on-one sessions, I can see only eight people in a day. With semiprivate and small-group training, I can see up to 64.”
Make the Change. Fontana insists this model can be suited to all businesses, large and small. But before transitioning to personal training memberships, Johnson suggests taking a microscope to your business. “Look at your business and decide if it’s working for you,” she says. “If it’s not, and you’re struggling, it might be time for a change.”
Once you’ve determined that a switch is imminent, Johnson says, pick a transfer date and just do it. “Be sure to talk it up. Do some demos. Have a client bring a friend. Maybe even have a kickoff party to create excitement and sign people up.”
Systems. “I recommend using a third-party financial institution to handle and service all agreements/contracts,” Fontana says. “They do all of the processing and collections for each contract.” Internet-based services like IDEA FitnessConnect or MINDBODY Online can also facilitate payment and scheduling. Fontana warns that while these systems are responsible for customer-requested payment processing, they do not provide collections services.
Schedules. Part of the success of this program relies on having a variety of exercise options for clientele to choose from. Fontana, La Fata and Johnson all offer classes multiple times throughout the day. When a conflict arises in a client’s schedule, she can simply register and drop in to any class during the week. One-on-one sessions can be made up if they fit within the trainer's schedule. If not, the client has the option to join one of the many available group classes instead of missing out on exercise altogether.
“When someone is ill or on vacation, we will allow him to freeze the payment for 1 week each quarter,” Fontana says. Concessions can be made on a case-by-case basis if a client plans to be away for a more substantial time period.
Adopting the membership method should be done with careful consideration and understanding of your business needs. While changing your business model might seem like a risk, Fontana insists it’s worth it. “Creating a membership-based program that encourages client attendance shows leadership,” he says. “Leadership is absolutely necessary when looking to help our clients achieve success. To make a change you must have a shift in thinking. We have to realize there is a better way. Summon the courage and gain the education so you feel confident enough to make the change!”