Late in 2023, I was interviewed for a show on the BBC about the growth of indoor climbing. Hannah, the host asked me "What will be the next thing that will grow the industry?" I suspect she thought I would talk about tech, or climbing boards, or private equity or something. I said one word "Sales." And I hold to that. Our industry is very behind in this area. If owners/operators can start to take strategic control of their revenue vs. what I call a "open the doors, turn on the lights and hope for the best" approach, our industry will grow.
So let's talk about the 3 levers briefly. This is a wildly simplified concept but hopefully makes a pretty multi-faceted and complex topic more digestible and actionable. In today's blog, we will be focused on the first lever:
Increase pure volume of customers, transactions or units sold
Increasing the average transaction amount
Increasing the lifetime value of your customers/members
Take Strategic Control of Your Revenue
You might be asking what sort of buzzword nonsense this phrase is. But I really mean exactly what it says. When I work with clients, I don't just want them to walk away understanding "sales", I want them to be able to know what levers they can pull to affect their revenue. I want them to know when to do it, how to do it, and what the trackable results are. THIS is what strategic control of revenue looks like. It means you can build strategies based on proven tactics that have measurable results on your budget. This skillset and approach is the opposite of just randomly throwing promos out there, posting on social media, etc with no real strategy or understanding of the results or outcomes. So how can we think about the first lever to gain strategic control of revenue?
Lever 1 - Increase Volume
One way you can affect your revenue is by increasing the pure volume of customers/sales/units sold. This lever can be a function of marketing by just focusing on getting more customers to your door. But, it can also be a function of sales. For example, if you already have a ton of day users coming to your gym you may not need to focus your efforts on that top of funnel and getting more people in the door. You might need to focus on increasing your conversions to membership. Your conversion rate can be measured as a percentage of your total new traffic over a given period. If you are struggling with member growth (volume), the fix likely isn't to increase new customers. In fact, I have found this to be the case nearly 100% of the time in my career and with my clients. They have more than enough qualified traffic coming to their climbing gym. The issue is not marketing or top-of-funnel activity, it's a lack of appropriate sales activity to convert those qualified guests into memberships once they are in the door.
How to Measure Success of Increasing Volume
Membership conversions is only one example, just about any other items you sell or want to see an increase in volume could be substituted. The important thing is that you have a measurable funnel. This mean you need to know a few things:
Who is your customer for the given offering or product?
What is the offer or incentive for this customer to purchase?
How will you define success? --- ALWAYS set goals.
Considerations
Can you collect and report on the KPIs?
Do you have the resources to train staff?
Have you thought about a system for recognizing and rewarding success?
The first and perhaps most important consideration is HOW will you increase volume? Discounts? Value-add-ons? Paid promotion or advertising to increase awareness of a product? Expanding your market share to a new group or area? There is no one right answer, it all depends on a variety of circumstances.
If you want the overarching outcome to be learning and a future ability to take strategic control over your volume you have to set goals, communicate those goals, incentivize those goals, provide the resources need to achieve the goals. Then you must regularly review your results and know what the inputs were so if the needle moves you know what happened and why. Once you start doing these things, you will be able to replicate the success. You will have the strategic ability to pull this lever and increase the volume of sales, be it in membership or elsewhere.
In the next blog, we will cover lever #2 in detail. Increasing the Average Transaction Amount.
Rise Above works with clients on building their ability to take strategic control of their revenue. It's an important skill for the growth and success with any climbing gym. Let's talk about we can put that control in your hands.