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We've managed 100's of sales reps in the last 10 years, hired them, trained them, managed their work, set goals for them, held them accountable, tracked KPI's, and had some very successful teams because of this process. We believe that if you follow this you will have a successful sales rep(s)/lead generator(s) that will bring in new members monthly while you manage your business. Doesn't that sound nice? Once this person is trained, you have a dedicated, skilled individual whose sole purpose is to bring you more members. Over the last 10 years, we've worked with thousands of small businesses and in every industry other than boutique gym owners, these companies have sales reps. It's so strange that for some reason the gym culture is to not have a dedicated sales rep.
Typically the best attributes we look for in a sales rep other than some experience, we look for work ethic and attitude, we can teach you the rest. One of the biggest mistakes we see when hiring sales reps is not paying them enough to keep them motivated. If you pay too low you won't get someone who is experienced, they won't be a hard worker, and probably won't represent your business in the manner you'd like. This will lead to you being frustrated and them leaving or you having to fire them. This person will be one of the faces of your company, you want to have the right person in place. Keep in mind we are talking part-time at first, this shouldn't cost you that much for the potential return. It's also really easy to scale once the money starts coming in.
We've always believed in a two-step sales process: 1. Lead Generation 2. The Closer/Sales Rep. At first you can have the sales rep do both, but if you really want to drive sales quickly you'll have this be a separate position. Ideally, the lead gen would always be reaching out, following up, and booking appointments for the sales rep. Once you scale up we recommend having a lead gen/sales rep duo. Another reason for this is, the best sales reps don't want to be doing their own outreach, it can be discouraging and distracting.
Start with your network, you can post on your social media "Looking for an experienced sales rep, commission + salary". If you don't get a response or a few candidates to interview you can check out other resources for "job boards" here. https://www.smartrecruiters.com/blog/top-10-job-boards-for-great-sales-hires/
You don't really know if a salesperson is going to work out unless they've attempted to sell for you. I'd recommend setting some specific sales milestones and give the salesperson 2-3 months to meet those goals. Remember it takes at least a month to start building the pipeline to start producing sales. If they don't start producing at that point, let them go and find someone who will. Don't forget this is your business and you always have to keep the health of it top of mind.
Most of the time you think of paying a sales rep commission only, with the right person this can work great. With a low-price gym membership (under $100), it makes it more difficult but it's still possible. There's just not as much margin for a sales rep to survive on sales alone. The base is something small to give them more confidence in their position which will result in a better salesperson and ultimately representing your business better. In our experience, we've always had better sales reps when we give them a little base, but again, not necessary. This also allows you to hold them more accountable because they're treated more like an employee than a contractor. Better sales reps also hold themselves to a higher standard and will require some sort of base because they know they're worth it. Higher-end sales reps will start producing their first week and you'll be happier you invested the extra money.
Example: You pay a $500-$1000 base to a sales rep per month...$125-$250 per week. They hit up hundreds if not thousands of new contacts per month. An average sales rep, with that consistency, will bring in 2-6 clients per week, 8-24 clients per month. Now if you charge $130 per month for your membership that's $1040-$3120 new revenue coming in the door each month, starting month one or two. Now think about compounding this over 3 months, 6 months, a year! Reminder...This is new business, this doesn't count the 2-6 members you get every week just from anything else you're doing.
You have a couple of options here on a commission structure. We've either done commission only or a small base plus commission. Where we've had success was giving the sales rep monthly residuals on each account that they sold. This does a couple of things, it will motivate them to build up their residuals (work harder), they don't overpromise the sale because the longevity of that sale is what counts, and they turn into a customer service rep because they want that person to stay on with the service as long as possible. You can also go to them if the person they sold tries to cancel and have them try to save the account. Trust is, you'll have way more buy-in, and if you give them a residual it's much easier to get a better rep that will work commission only.
Example: If your monthly membership is $150 per month, I'd look to pay the sales rep $50-$150 for every signup, one time, then a residual of $10-$20 per account per month. We've paid sales reps 5% to 20% residual of the gross profit on a sale. It just depends on the price of the package and your margins. Be okay taking a hit upfront to hook your sales rep up, they will go the extra mile to get you more business.
Optional Play tie-in - If you don't have the funds for a sales rep you can run our "lifetime membership play" to bring in some quick income to invest in a sales rep.
In order to have the most success, you need to set clear expectations for your reps, spot-check them, and make sure you hold them accountable. You need to be setting clear expectations for how many new contacts, follow-ups, signups, closes, etc, they need to hit daily, weekly, and monthly. *If you don't have a target you won't know where to aim and will never know if you hit your target. This can change and should change as you go. This piece can be easy to scale once you've figured out your numbers.
Example: Hit up 100 new leads per week, out of those 100 leads 20 said they're interested, 10 show up for an appointment, and you close 5. This is just an example but when you can figure out these numbers you can then scale from there or hire another sales rep. You can also work on perfecting your outreach so that in the end, out of 100 contacts you end up signing up 10 or 15 or more! This is all about the messaging, follow-up, and timing.
Depending on how many hours you pay them, you need to set how many new contacts they need to reach out to each day. You also need to spot-check their work and hold them accountable. In our experience, it's pretty safe to say that any sales rep can reach out to at least 10-30 new leads every hour. This would mean 50-150 contacts per week, 200-600 per month. If you just paid them for 1 hour per day/5 hours per week. Imagine how many new clients you can get when someone is reaching out to 600 new contacts per month...With this formula, you can see how many new clients they sign up from every 100 contacts they reach out to. From this, you can scale as high as you want.
Here's an example of revenue that a sales rep could bring in so you can see how it could impact your business. These numbers are on the very low end and very conservative. Let's say you pay the sales rep a $500 base & $30 per sale...Other options you can do is a commission only and paying them residuals on everything they sell. It would be something like $50-$150 per sale for the first month and $10-$20 per month residuals on anything the bring in. This will turn them into a customer service rep as well because their residuals count on the customer staying on as long as possible.
One sales rep should easily be able to bring in a minimum of 10 new sales per month, once you have a system in place and they're trained they should be able to get 6-10 per week. *Remember this is all new revenue, this is not walk-ins, referrals, organic sales, etc...Stack this on top of new customers you're already bringing in. We've also paid our sales reps less on a sale if they came in organically or a referral. Think if someone finds your business walks through the door and they close them, you could look to paying them a one time $10-$20 payout.
|
Months |
New Sales Generated | New Monthly Revenue | Commission | After Commission Rev | Totals |
|
Month 1 |
6 | $780 | $180 | $600 | $600 |
| Month 2 | 8 | $1040 | $240 | $800 | $1400 |
| Month 3 | 10 | $1300 | $300 | $1000 | $2400 |
| Month 4 | 10 | $1300 | $300 | $1000 | $3400 |
| Month 5 | 12 | $1560 | $360 | $1200 | $4600 |
| Month 6 | 10 | $1300 | $300 | $1000 | $5600 |
| Totals | 56 | $7280 | $1680 | $5600 |
$5600 New Recurring |
This is a very simple version just to give you an idea, this doesn't calculate attrition for any of these sales either...I'd have the sales rep upselling all of your customers' swag, PT sessions, specialized programming, etc...Don't forget they should always be asking for referrals.
Your sales rep can sell your current customers products you already sell, new products, PT services etc...work some sort of one-time commission structure for upsells. Not only should the be brining in new clients they should be increasing your average customer value...
***Pro tip - they should always be asking your current customers for referrals.***
You should have your sales rep be tracking all of the new leads in FitHive, adding them into the CRM, tagging them, setting them as a lead, taking notes and setting a follow-up. They should follow up with every potential lead until that person says "YES" or "NO" and if they say no, put them on a follow up for 4-6 months into the future.
*Pro Tip - End every follow-up email, text, direct message with "I'll follow up in a few days If I don't hear back." This is just a subtle way of letting them know you're going to follow up and that you're looking for a response.
One of the biggest resources you have at your disposal is your current members. I would have an evergreen offer that is posted up somewhere in your gym. "$50-150 cash to any referral you bring in that signs up for any membership. Each of you will also get 10% off your membership fee as long as you're both a member" this does a couple of things...1. It's always in their face to bring referrals 2. They sell it for you for them to sign up 3. They becoming a customer service/accountability rep for you so their membership stays cheaper...Sometimes we'll get gyms that push back on discounting memberships and we always respond with "What's better, one membership at $150 per month or two at $135?" Don't just look at the discount, look at the lifetime of both of their memberships. Most likely they will both be customers longer because of the partner aspect.
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