Numbers Game

by:  John Dwyier

Membership is a numbers game; it always has been. For new owners this can be a quick primer and for established owners it can be a review.  Notice that all the “lucky” sales people are usually at their desk on the phone, not talking about how “slow” it is, or standing around waiting for things to happen.  Here’s a formula to explain their “luck” as it pertains to our business:

•  Approximately 38% of our outgoing calls are being answered by prospective clients.

•  Approximately 25% of those “answered” calls are turning into appointments.

If you are interested in planning for success, a little math will give you a model.

Let’s set a goal of 2 sales per day, per salesperson.

If we establish the club closing ratio average is 67%, the sales person will need to speak to three shows to make 2 sales on an average day.

Simple math follows…

• Divide the three appointments by your show ratio (top = 48%) to get your appointment “need”  (3 / .48 = 6.25, or 6 appointments).

•  To “speak to” potential prospects (those that must answer the phone) take the goal of six appointments and divide by the appointment setting ratio (6 / .25 = 24 people must answer the phone).

• Since 24 people must answer the phone, the sales person must make 63 calls. (24 / .38 = 63 total calls).

So if you want to sell two appointments per day, any given sales person is going to have to have a minimum of 63 leads to call.  Sales staff must have the structure and proper training or you will have a lower set and show ratio, which will require even more calls and therefore more leads.

There is no magic bullet that changes the metrics of this industry, and the ratios quoted above are usually “best case” scenarios derived from trained, motivated sales staff.   This entire plan of action relies on your sales team having enough leads.  If they are calling properly, they should exhaust a lead within 3-4 days.  Each salesperson requires approximately 100 leads per week, averaging out the leads that will make an appointment upon the 2nd or 3rd attempt with the ones who will never answer and are therefore discarded along with the ones who refuse.  If the salesperson is not generating two referrals on 15 sales per week, you are already 30 leads behind.  Floor referrals, Lead Box, and outside events will not be able to make up the difference.

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About GGFA

The Gold's Gym Franchisee Association is the independent voice of the Gold's Gym franchisees.
This entry was posted in Management & Operations, Membership Sales & Retention, Uncategorized. Bookmark the permalink.

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