Winning In any Economy
have yet to answer is: How do you foster a corporate culture that focuses intently,
nearly single-mindedly, on cultivating member loyalty? To my way of thinking, there
are seven basic requirements that a club has to meet:
1.
The process must start with an unwavering commitment by the club’s owners
and senior management.
2.
The club must hire people who have a passion for serving members exceptionally
well that’s ingrained “in their DNA.”
3.
It must train and develop staff to work with members to develop “best practices”
based on the members’ wants—not on the club’s convenience or priorities.
“How do
Everything that informs the member experience—whether it’s something
written, spoken, or acted upon—must reflect and address their needs. Ask your-
you foster self: “If I were a member, what would WOW me?” Ask your members what would
a corporate
WOW! them… And keep on asking them.
culture that
4.
Don’t allow staff to use the word “policy.” In virtually every case, 99% of the
time, when a member hears that word, they know they’re about to receive an
focuses intently,
excuse—a reason why they can’t have what they’ve requested. Train employees
nearly single-
to solve problems in innovative ways, making it possible, in most cases, to say
“yes,” instead of “no.” And, when the club simply can’t comply, have staff use
mindedly, sensitive, diplomatic language to explain why.
on cultivating
member
5.
Coach staff to help them view a situation involving angry members as an oppor-
tunity to convert them into members-for-life. Train them how to use “mirroring”—
acknowledging, accepting, and respecting the member’s position—to defuse their
loyalty?” anger and, then, go the extra mile to surpass their expectations.
6.
Ask for examples of memorable experiences and surpassed expectations at
every staff meeting and make them part of the club’s culture. Develop metrics
that hold employees accountable for orchestrating such magic moments, and
give credit to those who do with “purposeful recognition” and rewards.
7.
Don’t trim expenses for a short-term financial gain if it will have a negative
impact on the delivery of quality service. In the long run, the savings will be
more than offset by lost revenues and reduced profits.
THe LOyAL MeMBeR: FINANCIAL IMPLICATIONS
Significant sales are at stake each time a member is acquired The actual revenues generated by one loyal membership billing
or lost—depending on whether they’ve had a memorable unit in this model, including the 20 additional referred member-
experience (expectations exceeded) or were barely satisfied, ships, equals $130,000 over the 13 years—almost 24 times
or worse (expectations unmet). The following example calcu- the $5,437 the one membership unit pays over the five years.
lates the potential financial outcomes. Conversely, if the club strays from its member-loyalty focus, it
Lifetime Sales Value (LSV) of One Loyal Membership Billing Unit
stands to lose members and associated referrals at a huge cost.
For example: (1) if it loses just 12 new members per year due to
Assumptions:
“average-to-poor” member experiences, lost revenue approaches
1. A club has a member-loyalty-centric corporate culture.
$1.6 million (12 x $130,000); (2) if it loses 36 new members per
2. A loyal membership billing unit remains active for just
year, lost revenue exceeds $4.6 million; (3) and if this happens to
five years.
be a chain with 50 facilities, which each lose 36 members per year,
3. The membership unit pays $1,024 ($64 dues; $21 miscel-
lost revenue is over $233 million!
laneous/month) annually in y1, increasing 3% in y2-y5.
4. The member refers just one new member in month one of
For an excel financial worksheet that can be used to calculate
y2-y5 (four total).
the implications for a given club company, contact the author at
5. Those four referred members also spend $1,024 per
hwasserteil@gmail.com. —|
year (plus the 3% increases), and each also provides four
additional referrals in y2-y5 (20 total), on a staggered basis
over a 13-year period.
64
Club Business International | MARCH 2010 |
www.ihrsa.org
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