Today we are going to discuss direct response advertising versus long term brand advertising.
When building a health club brand both are essential for your long term dominance. Striking a good balance is what I believe most clubs struggle with. Over the years I have certainly seen the extreme ends of both. Now obviously the availability of capital is what ultimately determines which path a health club takes. If the capital is there and the gym has quality equipment, services and staff, long term brand advertising is the obvious path to success. That being said even the most successful gyms benefit from the cash infusion direct response provides from time to time. When executed properly direct response has always provided the best ROI in the health club industry which has led to it’s overuse. It only works until it doesn’t, and if your health club relies on it too heavily your market will inevitably begin to show signs of marketing fatigue.
In what seems like a long time ago…
I was just a young 24 year old pup and the year was 2001. I had a ton of ambition and the world was my oyster. I thought I could do no wrong and always assumed my decisions were the right ones. I started out with an idea of running my own promotion company and landed one of my first huge health club clients. It was an huge 25k square foot, monster of a club in a town that looked perfect on paper. I will never forget the feeling I had as I made that long drive down there. The nerves, the fear, the excitement, the anxiety, the phone calls from friends and family congratulating me, the pressure. It’s one of those still frames you have permanently imbedded in your mind and always wish you could relive.
The club owner was young and ambitious. We were both at the same places in our lives; drinking from the same water cooler if you will. Man did that water taste sweet. He had just signed the lease to take over the club with a personal guarantee after managing it for a couple years. The promotion ended up being a success. I recall we ended up doing $130,000 dollars in sales in 17 production days. Slaps on the back and a big see you next year were how we parted ways. Only the next time he called to run a campaign wasn’t a year later. It was just six months later.
Now to be completely honest I was terrified of doing it. Taking a $7,000 dollar risk at a club you just promoted six months prior always requires a decent sized shot of Pepto. Against my better judgment, I took the contract. We ended up doing ok though. This time we did around $100,000 or so. It continued on like that for years. Every time the gross sales would take a 20-30% hair cut. Finally one year the sales dwindled to the point we had to change things up. We used a substancially greater price point on the full use option to give the gross sales a boost. We still got about 20% less members than we did the prior promotion but at $600-$700 a pop for 2 year contracts, we ended up grossing around $60,000. I wasn’t all that comfortable using those tactics however and that was the last and final promotion I ever ran for my client. During those fruitful years he never remodeled, put in new carpet, bought a new piece of equipment (I think he may have bought a couple used treadmills at one point), painted the walls, or added a new aerobics class. Never ran a testimonial spot on TV; never did any billboards, no custom membership cards, no radio, nothing to improve his brand image. In fact he ended up scraping the aerobics program all together. After I declined to do anymore promotions, he went on to try out almost every other health club marketing company in the business experiencing the same downward trendline in sales.
Do you know how that health club is doing today? It’s now a thriving vacant building. The former club owner/ building owner/landlord to this day is unable to lease it out; equipment and all. My old good pal has become wiser over the years and today owns a very successful club around the same area. We still keep in touch from time to time.
Anyways the point of the story is to show you the hazards of relying on direct response advertising too heavily. If you use direct response, make sure you are using those funds to make improvements in your gym. Buy a new piece of cardio equipment; add an aerobics class, anything that shows the community you are in it for the long haul. Balance your advertising out. Purchase some local cable spots and run a testimonials commerical with your most loyal members. Put your members on the radio and let them tell the world why your gym rocks. While direct response marketing will always be king, a good balance is essential in insuring your clubs long term success. Not everything has to pay off immediately, sometimes good things take time.
Until next time have a great week!
For more ideas on long term brand advertising visit our article here.