The
ahead
YEAR
THE GLOBAL ECONOMY’S EFFECT ON THE CANADIAN CLUB MARKET
U
ntil the past year, the fitness club industry enjoyed healthy growth as people became more aware of the importance
of fitness. Health and social interaction are the main factors that draw people to clubs, along with appearance-related factors including improved muscle tone and weight control. However, recent eco- nomic factors have impacted the global fitness club market. In 2008 in the U.S., membership sales were down 5 percent, cancellations and non-renewals were up 20 percent and non-dues revenue was down 15 percent. With data from over 3,000 fitness
clubs from around the world, Checkfree, now part of Fiserv, found that automated clearinghouse (ACH) transaction insuffi- cient funds/declines doubled in the first three quarters of 2008 (from 4.5 percent in January to 9 percent in September), while credit card declines increased by 50 percent in the first three quarters of 2008 (from 9 percent in January to 13.5 percent in September). These increases clearly indicate that fitness club mem- bers are becoming more financially strapped.
How Can Clubs Overcome the Economic Decline?
EXPENSE CONTROL
One of the first things clubs should
do is negotiate new contracts with ven- dors who provide, for example, cleaning services, towel service, insurance, elec- tronic funds transfer (EFT) processing and equipment. As well, consider outsourcing time-
consuming payment processing, billing and collections to allow your staff to fo- cus on your core business. A third-party company works as an extension of your business, reducing your overhead while
24 Fitness Business Canada January/February 2009
Ron Poliseno
Director
BY RON POLISENO
providing the most cost-effective receiv- ables management service. Let your em- ployees spend the time saved enrolling more new members.
USE DATA TO MAKE BETTER DECISIONS
Along with cutting costs, clubs can
use technology and data to make better decisions and increase revenues. For ex- ample, club management software can identify members who are the biggest spenders and the amenities and ancil- lary services that they most frequently purchase. This information can be used to target and market to other members who are demographically similar. In ad- dition, club management software lets you set business goals and measure your club’s performance on each key perfor- mance indicator.
THE BOTTOM LINE
Today more than ever, decision mak-
ing on expenses, either existing or po- tential, is critical. Informed, educated spending decisions can make the dif- ference between riding out the current economic decline and being out of busi- ness. Remember, every dollar saved on expenses is a dollar in profit. Your club management software lets
you drill down into data that shows at- trition, dues and non-dues revenue, pro- gram attendance and several other key factors. This is the information that en- ables owners and operators to determine where to expand or contract and how to grow and retain memberships while max- imizing revenue and minimizing costs. The economy today provides chal-
lenges to businesses of all types. Therefore, EFT processing, technology, software and outsourced billing and collections services are becoming more important to a club’s cash flow and ex- pense control.
Checkfree, now part of Fiserv
“REMEMBER, EVERY DOLLAR SAVED ON EXPENSES IS A DOLLAR IN
PROFIT.”
Ron Poliseno is director of client development for Checkfree, now part of Fiserv. He has more than 13 years of ex- perience in management roles in product management, and sales and client serv- ices. For more information, visit www. checkfreecompete.com.
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