This month we sat down with Frank Ancharski, M.S., the Founder and Chief Coaching Officer for Club Coach Services, to discuss financial planning strategies.
A lot of clubs have taken a huge financial hit, especially in terms of ancillary revenue. How can clubs grow “post-shutdown” ancillary revenues?
First and foremost, we cannot give up on those members whose fear factor outweighs the preventative and now increasingly important socializing/mental health benefits provided by clubs because of our COVID-19 isolation. Secondly, offer friendly and innovative billing options. A digital exercise solution is crucial for survivability and finding a way to monetize it while working out more friendly and flexible billing options for frozen, existing, and the new “digital-only” membership. Peloton, iFit, Intelivideo, and free fitness streaming services have changed the landscape of our space forever. This portion of our industry is here to stay and must be embraced for our recovery.
What have you learned regarding financial management during this period that would benefit others?
Be more marketing/revenue driven than operationally fearful. What I have learned is we are not reaching enough people, we make it too hard to join, and we are not forgiving enough in relation to fees, policies, and membership restrictions. There must be a reason we have only 16 to 20% penetration for club membership in the U.S., and not enough of the media, politicians, and medical community believes we are essential. Why? It is us and we need to open our doors to be more inclusionary with ease of transactions and customer-friendly policies and think bigger. We are so good at relationships with members who join; let’s take that superior skill set outside of our four walls.
If you could give one piece of advice in regard to financial planning during this time, what would it be?
Save for a rainy day. Whether it be a result of improved occupancy costs from landlords and banks, improved efficiencies in labor distribution, or removal of unprofitable programs, the coronavirus pandemic has forced us to tighten our belts to survive. By my calculation, saving 20 nickels still makes up a dollar. I encourage owners to create and execute a rainy-day fund, and not throw all their returning revenue/profit back into equipment, payroll, new programs or the owner’s pockets. A portion of this fund could and should be earmarked for our industry’s lobbying and public relations efforts so we can once and for all convince the media, medical and political elite that we are in fact essential.
What are three reasons clubs should be optimistic about the financial future of clubs?
- The industry’s collective resilience and determination. I have seen and participated firsthand in our industry’s inherent ability and thirst to connect with each other.
- People. The Successful Strategies for Shaping your Future webinar series hosted by Club Solutions Magazine, IHRSA, and REX Roundtables, among so many other colleagues, were beacons of light during these unprecedented times.
- Virtual connections. Zoom has become a verb and it will be a new tool in the toolbox to remain engaged with our teams more effectively and efficiently.