- 1.Seasonal Cash Flow Issue #1 That Membership-Based Businesses Experience (and What to Do About It)
- 2.Seasonal Cash Flow Issue #2 That Membership-Based Businesses Experience (and What to Do About It)
- 3.Seasonal Cash Flow Issue #3 That Membership-Based Businesses Experience (and What to Do About It)
- 4.Seasonal Cash Flow Issues #4 That Membership-Based Businesses Experience (and What to Do About It)
- 5.Seasonal Cash Flow Issue #5 That Membership-Based Businesses Experience (and What to Do About It)
If you haven’t already, check out our previous posts where we cover the first two seasonal cash flow issues that membership-based businesses are prone to experiencing:
This week, we’re delving into cash flow issue #3, which addresses whether or not your membership-based business is doing enough to attract, convert and keep new members.
Cash Flow Issue #3: Not Competitively Capturing Seasonal Market Share
In an ideal world, creating an excellent product or service would be enough to attract customers. It rarely is, however, and very few businesses can afford to rely solely on positive-word of mouth. You need customers–enough customers–to pay the bills, to pay yourself, and to grow your business.
Many membership-based businesses fail to do adequate research on what their competitors offer, who their ideal target customers are and how to effectively appeal to them. Instead, they create an offer they think is “good enough” and leave it up to their staff to sell memberships. The result is often disappointing and even fails to account for the number of existing members their business could lose because a competitor offered them more perks and better value.
What To Do About It:
Success occurs when opportunity meets preparation – Zig Ziglar
If you operate a gym or yoga studio, you know which seasons attract peak influxes of new potential members who are eager to get fit. Whether the influx correlates with prospective members’ New Year’s resolutions, wanting to get fit for beach season, or jumping on a new fitness trend, prospective members are likely to shop around and consider the various venue choices offered in their area.
Are you and your staff ready? How strong is your offer? How positive are your online reviews? How will you capture these new potential members before they shop around with your competitors?
This doesn’t just apply to fitness-related business:
If you run any type of business that offers subscriptions or retainer-based service contracts such as landscaping, for example, what can you do to capture new market share while retaining your existing client base? Are you willing to offer a perk that your competitors won’t, such as emergency snowfall cleanup and salting, or holiday lights installation and removal?
If you offer a cloud-based software as a service, what value added, limited-time incentives can you offer to capture new users before their free trial of your software ends?
Regardless of which type of membership-based business you run, ask yourself whether a short-term business loan would allow you to add an appealing component of your business that can convert more customers and generate immediate revenue.
To competitively capture seasonal market share, you need to first understand:
- Everything you can about your ideal target customer including what they want and how they consider their options.
- What your competitors are doing: what they’re offering and where their advantages and disadvantages are.
- What you offer that’s different–in a good way: what can you do better? How can you go above and beyond for your customer?
- What you can feasibly offer that’s as-appealing-as-possible to your ideal customer (it has to be something your customer will actually value).
- Whether or not you have enough funds accessible to carry out your plan.
Once you’ve identified the above, get busy developing an easy onboarding offer:
What are your competitors offering that you can top? This doesn’t mean you have to lower your membership prices; on the contrary, you can sweeten the deal with “value added” perks.
For a gym or yoga studio, “value added” can include:
- Longer hours, more classes or 24/7 gym access.
- A personal training assessment.
- Branded swag (water bottle, yoga mat, clothing) to new members who sign up for an annual membership before a specific date.
- Offer a membership for couples whereby they save 20% off by purchasing two annual memberships together.
- Offering an introductory 10 drop-ins punch pass for people who are new to yoga/pilates/strength training that’s more attractive than paying for ten individual drop-in fees.
For other types of membership-based businesses, “value added” can include:
- Access to extra features or service add-ons
- Personalized support or added training
- Gift with purchase/product add-ons
- Extended access or services
The point is to get creative–come up with perks that your ideal target customers will actually want–and make sure your staff is onboard and knows how to present them to new potential customers.
The honeymoon should never end. Don’t place your focus entirely on acquiring new customers:
While you certainly want to place adequate focus on acquiring new members this season, don’t neglect to incentivize loyalty for your existing members. When you consider that it costs less to keep a customer than it does to attract and convert a new customer, member retention is essential to maintaining business growth.
Court Reserve offers excellent member-retention tips for tennis clubs that can be applied to any type of membership-based business.
To help you develop your own marketing and promotions strategy:
Ready For the Next Step?
Visit our blog next week for Cash Flow Issue #4: Lackadaisical Accounts Receivable.
Need Cash Flow Help Now?
Is your business feeling stuck in a situation that only an immediate influx of money can resolve?
The problem with bank loans and lines of credit:
Applying for a business loan from the bank can take weeks, and many small business requests aren’t ever approved. Banks are typically only interested in substantial and long-term loan requests by business owners who have sufficient liquidable assets for securing the debt.
Considering that many small business owners are busy wearing several hats in their business, they don’t have the time to go through meetings with banks and potential lenders. When a financial emergency arises, time is of the essence and they need help, fast!
And considering that many small business owners, already invested their own personal assets and savings in launching their business, they need a lender that considers their situation and offers loan amounts and repayment terms that are tailored to their unique requirements.
Company Capital Can Help
While your business may be counting on increased sales this quarter, keep in mind that the holiday rush is also a time when businesses experience cash flow issues due to poor prior forecasting or lack of operating capital. Small business owners come to us for this very reason, seeking immediate financial support through one of our short term business loans.
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At Company Capital, you can speak with real humans at our office who will listen to your situation, and guide you through a fast and simple application process.
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It takes as little as 3 minutes to apply for a loan from us online, via phone or email. Over 90% of applicants are approved for our Term Loans, receiving funds within 1-2 days.
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Choose The Right Business Loan For Your Situation
Find out which loan option is right for you, take a look at how easy it is to apply, or give us a call at 1 (877) 595 2346 to learn more. We’re proud to support small local businesses and serve as trusted advisors in helping you grow your business.