Club Sales Training: Clarifying Referral Urgency

I received some feedback on my last e-tip that discussed the need to create urgency with POS referrals. This person e-mailed me back but because I think they brought up such a good talking point I am including it here. If you want to receive my free weekly e-tips on health club sales please visit www.HealthClubSalesTraining.com and simply fill out your name and e-mail.

June 6, 2008

Charles wrote in:

I disagree that referrals MUST be done at the POS and need to be presented as a “today only” option. This "Now or Never" philosophy increases the chance that the person will either tell you no, or you will receive watered down leads.As a savvy consumer and a sales manager I see a lot of tricks, ploys, and tactics that sales persons and companies use to enhance new business. One of the ones I feel discredit honesty and integrity is the use of the "Now or Never" demand which only masks the "Now or Later" request.

“I work by appointment only; this is the last day; or you have to give me your referrals now”, are cheap ploys that focus more on getting the next sale than on the next individuals’ experience.Some people use tricks and gimmicks because they lack the substance needed to establish quality rapport, build trust, show value, and create a vision, and posses an excellent knowledge and sincere interest in their craft.If we worked by appointment only then what's the point of a walk in? If they can only give us referrals now then why do we call for them a few days later and ask for that very referral that we told them, today only. If today's the last day, what's tomorrow?I was watching an episode of Family Guy a few weeks ago. A little part of the episode was of Stuey who went to get a gym membership. So he goes into a club where he's encountered by the membership person who starts yelling really fast "Great, we have a special going on for the next 17 minutes," "You need a free t-shirt, gym bag, how about tanning?"It hilarious yet if got me thinking, is that the perception of who we are?

First, Thanks for your honest feedback. Let me start out by saying that I don’t disagree with your ethical position. That is, using a “now or never” approach if it isn’t really the case is a tactic and a ploy that will only lead to customer dissatisfaction. Given that these Blog postings and tips are only snippets of entire philosophies and strategies, let me further flesh out my points as it relates to urgency and the POS.

When I say that a club should have POS referral program that offers is used only at the POS, I am not saying that the salesperson or the club won’t ask for some type of referral in the future—because they will. What I am saying is that the club should have some kind of referral program for brand new members that really is for new members only.

Therefore, if your club asks for referrals frequently by giving away a 7-day pass, make the POS passes 14-days. This simultaneously increases the value of the pass and the urgency for the member to give names. Certainly, no strong-arm approaches are used; either they want them or they don’t. By ensuring that this type of pass or gift is only available at the POS a club will increase the likelihood of POS referrals.

Let me give you a very specific club example. I worked with a club once that decided to stop giving any free visits to the club. Didn’t matter what the situation was—out of town guest, interested prospect—they decided that anyone who wasn’t a member that wanted to use the club would pay $15. Further, instead of “requiring” the guest to go through the gyrations of speaking with a salesperson, the front desk simply asked the guest, “Did you want to speak with someone about membership today?” If the answer was no it was not a problem; they signed their waiver were shown around and they could enjoy their visit.

The club thought for sure that this would negatively impact their sales. They were surprised to find out that it did the opposite. Because people didn’t “have to” talk to a salesperson the quality of tours went up and so did the number of sales.

What does this have to do with referrals? Simple, because they had a $15 per visit guest policy the club began offering each new member the opportunity to get two one-day passes at the POS. Since the policy was upheld the passes became tremendously valuable and they average something like 1.5 referral names from new members. This is not a gimmick or a ploy—it is the policy.

So, what is the bottom line? There is no question that too many clubs in our industry are using tired, unethical practices to sell memberships. I do not believe that creating urgency or a promotion has to be synonymous with unethical. To the contrary; I believe that well thought out membership and referral promotions can further your good reputation and help your club build a strong community alliance.

For those of you reading this Blog who may not have ever attended one of my sales training sessions let me end with this. Selling health club memberships is a privilege. It should not be taken lightly. We are in the business of helping people improve the quality of their life. We need to develop long-term relationships with customers, not sell “wham, bam” memberships and not care whether someone uses the club or not. Unethical business practices don’t work for organizations that want to stay in a community long term. When creating all your clubs’ policies, marketing and sales materials you must have the customers’ interest at heart. Finding ways to accomplish that AND help build your business at the same time is truly a win-win situation.

Happy Selling! In good health,

Casey