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SALES STRATEGY


& T


LEAN MEAN


Doug Werner outlines the powerful impact that the


‘Lean’ protocol can have on a health club’s sales process


he health club industry has come a long way in the past 30 years, from the intimidating spit and sawdust gyms of the early 80s to


the 10,000sq m, all-inclusive ‘super clubs’ of the 21st century. During that time, operators have consistently benefited from advancements in equipment, programming, training, facility design, sales and marketing, and member services technology, with innovation and invention helping to overcome any challenges to profitability. Recently, however, the combination


of weak economic conditions and the proliferation of resilient competition across all sectors and price brackets within the market have made it harder than ever for clubs to differentiate themselves and grow. What then? When all else fails, what are the options for improving profi tability? One obvious answer is to


simply reduce operating expenses. Unfortunately this strategy frequently requires a leap of faith and can be fraught with guesswork. Done without precision, cost-cutting can easily backfi re and have the reverse effect on profi ts: as many operators have experienced, operational decisions such as cutting payroll, delaying improvements to facilities, stretching supplies or reducing marketing spend can lead to a decline in member retention or acquisition and, with it, losses to the bottom line.


48


The Lean philosophy So how can a service entity be more precise when trying to improve profitability through cost-cutting? One methodology used with great


success by thousands of manufacturing companies around the world is Six Sigma, a business discipline that focuses on ‘increased productivity through improved quality control’. Using Six Sigma, manufacturers can


closely analyse quality control – from parts and materials sourcing through to customer service – by using the knowledge of the production line personnel who actually do the work. This type of strategy goes back as far as Henry Ford and the Model T. More recently, fi rms like Toyota, Motorola, GM and even Coca-Cola have benefi ted dramatically from Six Sigma applications. But what of companies that don’t actually manufacture anything? More


Read Health Club Management online at healthclubmanagement.co.uk/digital


specifi cally, how can health clubs benefi t from the highly productive business principles epitomised by Six Sigma? Healthtrax Fitness and Wellness


in the US provides a great case study. Acknowledging the negative impact of an overly complicated membership sales system, which was hurting both sales productivity and sales associate retention, in December 2011 the health club operator turned its attention to a rapidly growing productivity philosophy known as Lean. As defi ned by James Womack, author


of Lean Thinking and founder of the Lean Enterprise Institute in Boston, US: “Lean is a set of business principles and tools used to create and deliver value as the customer defi nes it, while consuming the fewest resources possible, by fully utilising the knowledge, skills, passion and thinking of those who perform the work.” Put more succinctly, Lean


September 2013 © Cybertrek 2013


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