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Education Can Generate Revenue

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

  • 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.

Tips for Cost-Effective Education

Ample education opportunities exist in the fitness industry. Trade shows and conferences are education candy stores where participants can fill up on a wide range of accredited sessions. Most cities have seminars, clinics and symposia occurring any time of the year. From management, marketing and facility operations to human physiology, choreography and specific training trends, education opportunities are endless. But there are few facilities whose budgets are. Once you have determined how you will support education, consider the following options for making it cost-effective.

1. Share the Wealth. While your entire staff may benefit from a particular clinic or seminar, sending everyone may be a financial burden. Instead, allow one staff member to attend and require that person to pass on what she learned to the rest of the staff.

2. Make Instructors Out of Your Instructors. Encourage your employees to share experience and expertise with each other. You may have a trainer who is an expert at creating spreadsheet workout charts for clients, or a group exercise instructor with experience in pre- and postnatal exercise. Sharing knowledge and experience will help better serve your members and may increase productivity amongst your staff.

3. Bring Experts to Your Club. Rather than send your trainers and instructors to an education event, why not bring the event to your trainers and instructors? You have options for making this a cost-effective and often profitable task.

4. Split the Cost. Ask each of your employees to contribute to the cost of the event in your facility and pick up the remainder of the tab. This allows both parties to demonstrate commitment.

5. Serve Your Fitness Community. Open the event to fitness leaders throughout your community and charge attendees a fee to cover the total cost of the event.

6. Bargain With Education Providers. Strike a deal with the education provider to offer your facility as an education venue at no cost in exchange for free participation by your staff. The education provider is then responsible for all advertising, marketing and any other costs.

Case Study

Background: Kelly began her educational support program in her second year as general manager of a medium-sized suburban health club.

Procedure: She required employees to submit in writing their annual education proposals each January. Each plan was to include the event’s learning objectives, fees and associated costs, as well as the number of possible continuing education credits that could be earned. Each employee also was asked to include the relevance of the educational event content to career objectives and goals and the club’s profit goals. Finally, employees documented an action plan for implementing what they anticipated learning. Once Kelly approved the budgets and plans for the proposals, she created a learning contract with the employee, detailing both management and employee responsibilities.

Results: In 2000, Kelly approved just three educational events. Her front desk supervisor attended a one-day customer service class offered by the American Management Association. One of her personal trainers attended a behavioral psychology weekend seminar hosted by a well-known psychologist. And her part-time membership sales rep attended sales sessions at an annual trade show.

As a result of the information her employees learned at these events, new customer service procedures were implemented in every department. Receptionists greeted members and answered the phone differently, trainers approached members on the floor differently and even billing procedures changed.

  • The front desk supervisor passed along what she had learned to other department supervisors who were able to directly apply that knowledge and make specific changes.
  • The personal trainer incorporated behavior change strategies into his sessions with clients who were struggling with weight loss. He also developed behavior change classes targeting smokers and those who were struggling to make exercise part of their weekly routine. In addition, he suggested a complete revamping of the current orientation porcedures for new members to include some of the behavioral strategies he had learned.
  • The part-time sales rep passed along what he ahd learned to the rest of the sales staff and suggested new methods for drawing leads into the club and conducting club tours. He also passed along simple sales techniques to personal trainers to help them attract new clients.

Kelly implemented an employee performance review program for all departments in conjunction with the educational support program. Education and its successful implementation were key components for raises, promotions and bonuses. In addition to record-breaking membership sales in 2000, the club generated significantly more revenue from personal training and lost only two employees across all departments.

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