Rethinking The Business Of Wellness

The Mailroom #3: Newbies, Attrition, Giveaways, One-Time Clients, & Franchises

We love to hear from subscribers. Need a sounding-board? Want to bounce an idea off someone? If you take the time to ask, we take the time to answer.Send us your question.

Here’s the latest round of questions we’ve tackled, some edited to fit or to preserve confidentiality:

1) Avoiding “newbie” mistakes in a wellness coaching practice

When I start my new business, what mistakes should I avoid? I plan to do wellness coaching and sell nutritional products online. I’m currently working as a registered nurse and I’m also a 500-hour RYT, but I haven’t had my own business before.

First, focus your energies on creating a business that really meshes with your own aptitudes and interests.

Be realistic about what your strengths are and get help in the areas where you lack knowledge or experience. Entrepreneurs often act as if they have unlimited time to figure it all out – but new businesses routinely stumble along and ultimately fail due to lack of business know-how.

Consider investing in outside help to figure out the parts of the business where you lack knowledge or experience. For example, if you’re not comfortable with financials, get an accountant right away. If you haven’t run a business before, consider investing in some business coaching. An investment of a few hundred dollars or a few thousand dollars can increase your profits by many times more than you spent, often much faster than you could figure it out yourself.

Next, surround yourself with strong people – employees or contractors (if needed) as well as outside professionals like attorneys and CPAs. Look specifically for people who will complement your own weaknesses as a businessperson. This is not the time to hire your brother, a high school student, or your best friend from college – unless they truly have strong skills. And before you hire customers, make sure you can count on them to be solid employees. We often see businesses suffer painful consequences as a result of hiring people based on enthusiasm for your business or on personal relationships rather than skills and capabilities.

Finally, make sure you really can afford the time and money it will take to build a customer base. And have a detailed plan for actually going out and acquiring customers. We hear from many new business owners who believed that their idea was so good that customers would flock to them. As a result, they never created a specific plan for attracting business other than “word of mouth.” Even word of mouth requires a detailed plan and hard work on your part!

2) Wellness center’s customers are steadily trickling away

Our fitness center is steadily losing members. We’re in an upscale area and have a nice facility, but our customers are just trickling away. We’ve tried all kinds of things like new machines and discounts, but nothing’s really working. Help!

Struggling businesses often take a shotgun approach and throw everything at the problem – new equipment and programs, new staff, dropping prices, rebranding, launching new ads, etc., etc.

Frankly, that’s putting the cart before the horse. It FEELS good – because you feel like you’re really taking action on the problem. But it often doesn’t actually turn the membership picture around, because the root cause of the problem hasn’t been identified and addressed.

The key issue to address first is why you’re losing members – or, perhaps, keeping the ones you’ve got but not getting many new ones.

Regardless of whether they’re independent or part of a national or regional chain/network, health clubs and fitness centers are fundamentally local, community-oriented businesses. Hordes of sales reps are far less effective than passionate word-of-mouth – but that requires actually doing a wonderful job of creating relationships with members.

And that’s pretty tough to do in the health club world, for a variety of reasons, most having to do with traditional health club management thinking. Despite the tendency of many club owners/managers to blame fickle members, it’s usually management that’s to blame for retention problems.

That’s why the key question is:

Why don’t your current members love your club enough to 1) stay and 2) bring more members just like them?

Your opinion about the reasons isn’t really what’s important. What IS important are past and current members’ honest answers to those questions.

If you haven’t already done this, start by reaching out individually to them and asking for their help. Make sure you talk to more than just 3-4. By the time you talk to 7-10 of each type (past and current), you’ll really see patterns in their feedback.

Then you can create the most appropriate action plan to address their concerns and dissatisfaction.

3) Should we skip health fairs if we can’t afford giveaways?

Are women’s expos and health fairs good places to find customers? I sell a functional food product, but I can’t afford the giveaways that all the other booths have. It seems like the booths that give away the best items, like iPods, get the most customers.

Don’t confuse people who grab the giveaways with paying customers!

Events like this are tempting because it seems like you’ll be reaching hundreds or even thousands of potential customers! But if you look at how many actual customers you get as a result of the event, wellness businesses often realize that standing in a booth is not necessarily the same as actually making a sale.

Your objective at an expo should be getting the names/contact info (e-mail, for example) and permission to contact them in the future. That way you can send them a short e-mail, for example, with a customer success story and a link to your website where they can buy the same product or service that helped your testimonial customer. People normally need several exposures to something new before they decide to buy, which is why it’s so important that you get their contact info – it lets you follow up with them after the expo.

For example, let them give you their contact info in exchange for entering a drawing for one case, let’s say, of your food product. That’s an impressive giveaway, but should be pretty affordable (if it’s not, offer a pack of six or whatever you can afford). And give everyone who drops their name in the fishbowl a discount coupon, say.

Instead of giving everyone a sample of your product, give away something that will encourage them to think about how wonderful it would be to lose weight, have more energy, or whatever benefit your product offers.

For example, offer a fun or interesting tool that focuses their attention on the problem you product can solve. For example, if your food product offers more energy, offer a one-page flyer with a free five-question “personal energy audit” to jumpstart conversations. On the reverse side of the quiz, put brief information about your product plus your contact info/website/etc.

Avoid the typical tradeshow giveaways that are unrelated to your actual product. The problem is that they just attract people who want the freebies. That has nothing to do with whether they will buy your product or not. In fact, they usually pay no attention at all to what you’re selling – they just grab the freebie and move to the next booth.

And contrary to popular belief, just imprinting your company name on a trinket that will hang around on someone’s bathroom counter or desk will not result in a sale a year from now.

4) Growing a chiropractic practice without repeat customers

What marketing approaches work for a chiropractic office focused on relieving pain and showing patients how to stay out of pain so that they don’t become patients for life?

We think you need two strategies: one strongly focused on building referrals and word-of-mouth, and a second focused on adding some kind of product or service that will create repeat business. If you only transact once with each client, you’re leaving money on the table. Moreover, you’re not building lasting value in your practice.

First, focus on a niche — it’s often easier to promote a specialty. Examples: low back pain, sports injuries, women’s health. Choose one based on your own interests/capabilities and the clients you’re most effective with.

Then, reach out to docs and other health professionals who focus on related areas. Some are resistant to chiro, but many understand the role and respect it.

Consider rewarding each client who refers others. This is especially important because your practice approach means you probably won’t see a lot of repeat business. If you specialized in women’s health, for example, a referral incentive for a complimentary skin treatment provided by one of your networking contacts might appeal.

Seek out local groups tied to your niche. We know of a chiropractor who specializes in working with performance artists and has connections with the professional musicians’ union, among others.

And consider whether a local newspaper or community “shopper” would be interested in doing a feature on a patient success story with strong human interest elements.

Start thinking about related products or services you could incorporate in your practice so that happy clients have an opportunity to continue their relationship with you. The possibilities are limitless, so don’t just copy what you’ve seen other chiropractors do. Choose products and services that are true to your business philosophy and values and that will appeal to your specific client base.

5) Turning a one-location business into a franchise

How do we franchise a successful wellness business? We’ve operated a program focused on women at our location and it’s really popular. Everyone says we ought to franchise it and be the next Curves.

We’ve worked with several businesses who were interested in franchising their operations as a way to grow.

First, we encourage you to add a second local site and then add a more distant site, so you get real experience in what it takes to successfully operate a site that you can’t watch over throughout the day. That’s probably going to take you a couple of years.

That’ll also force you to look at your team and make sure you have the people in place that can keep your original location going while you expand into Sites 2 and 3. That’s important, because you’ve got to be able to keep your original business healthy while you expand.

If you can’t do that, how will you be able to take on the extra burden of creating a franchise model and selecting and supporting your franchisees?

You’ll need a day-to-day operating model that is well-documented, so you can train others. The customer experience needs to be IDENTICAL (not just “kinda close”) from location to location. That means that all of the day-to-day details need to be consistently followed by your franchisees. Pricing structure should be consistent. The way you clean the equipment every night needs to be the same. The credentials for staff need to be the same. The quality of the toilet paper needs to be the same. The services, programs and products you provide need to be consistent. You get the idea.

Have a clear set of marketing messages and a promotional plan that is proven to actually work. By “actually work”, we mean that it must successfully attract customers at a cost per customer that works within the overall financial model.

And make sure that your day-to-day operations are consistent with the marketing message. That’s part of why training is so important. For example, if you promote yourself as having “sparkling clean facilities” but the operations manual is silent on how often the treadmills get cleaned, customers will quickly spot the gum stuck in the cupholders.

Your franchisees will probably fail if the franchisor (that’s you) doesn’t drive the marketing plan. Most franchisees aren’t sales and marketing gurus. Plus, they generally have their hands full just managing the day-to-day operations. Providing them with a bare-bones marketing plan (say, a standard newspaper ad or two) usually doesn’t work well.

We’ve seen quite a few health and wellness franchises that were primarily focused on getting the upfront franchise fee – and then left the franchisees to figure out the actual business.

Unhappy franchisees either sue or sell. One metric that potential franchisees usually check out is the churn rate among your existing franchisees. If lots of them are selling, that’s a red flag and potential buyers will shy away from your business model. So you need to create a model that really does help your franchisees succeed.

Last, remember that franchising is a heavily regulated legal relationship. Do your homework, both with an attorney and checking out the franchise scene informally, before you get started. Some franchise developers will tell you that you can avoid state and federal franchise regulations by structuring a “licensing” relationship rather than a franchise. However, for legal purposes, licensing and franchising relationships are often identical.

    Post a Comment

    (required)