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Old 05-18-2013, 06:02 AM   #26
Adam Morden
Affiliate Adam Morden is offline
 
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Join Date: Oct 2006
Location: Comox Valley  BC
Posts: 473
Re: 5 Dos and Donts when setting up your affiliate - Your thoughts?

Quote:
Originally Posted by Justin Okeson View Post
James,
Excellent post. I am conducting a feasibility analysis right now and I am wondering what your (or anyone else please) thoughts/experience is/are on the following items:

1) Is it better to lease equipment than to buy outright when first starting out
2) What is your customer attrition rate (what % of customers do you loose each month)?
3) What are your best marketing strategies, and your thoughts on groupon/living social strategies?
4) Does consumer demand justify offering different membership options (two days a week vs. unlimited)?

Thanks a lot for everyone's thoughts and responses!
Semper Fi
1) I think it is better to start off small enough that leasing wouldn't be needed, I've started 3 affiliates and the equipment cost to start of the most expensive was only $11,000 and it opened with about 45 members - Pre-selling your services so you have money in the bank on opening day is super helpful.
2) I've seen this vary tremendously by gym and time of year, as well as the culture you create and foster in the box. We'll have months go by with no cancellations, then at the end of the school year we might loose 5-10 members who are moving away after graduating. Annually we average about 5-6% churn.
3) groupon can be great or it can put you out of business - I've seen it do both to affiliates around here. I'll write a longer post about it later on. Our best marketing has always been member word of mouth. and like Skip Chase used to always say - talk to people about your affiliate everyday - I try to give out 5 business cards each day to someone I haven't talked to about the gym before.
4)Definitely we offer 1,2 3, and unlimited options - it increases average client value while not forcing your clients to pay for more services than they plan on using. We don't do punchcards for the most part
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Adam Morden - Owner CrossFit Courtenay, Comox Valley BC (WFS)
My blog on the business of running a CrossFit Affiliate (WFS possibly some language)
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