Outsourcing your Health Club Billing and Software Needs
National Fitness Trade Journal
Winter 2003
You're a new health club owner or you own a health club that's growing and you're ready to outsource your billing and collections. Can a third-party company provide the service you need? Can it maintain a professional, courteous repore with your members while still collecting your monthly dues? Can you afford a billing company? How do billing companies differ from one another? How do you choose what's right for your members and your club? Your research should come in the form of many questions, therefore making your decision an informed one.
First, Trust.
Anytime a company is offering to provide financial services, they will be handling your money and more importantly dealing with the very people that are creating your profit, your members. As a business owner you must feel comfortable dealing with this company and their staff.
Trust is the single biggest area most club owners overlook when making their decision.
What is the company's reputation? What is the management background and do you feel secure when dealing with these people? Can you build a business relationship or does the company just provide services in a shell? When reviewing the cost for outsourcing, billing companies may appear to offer the same services, but in reality, differ substantially.
Can you speak to upper management if something goes wrong or do layers of management insulate them? What are the general polices of the company? Do those polices align with your philosophy? What is their experience collecting payments for health clubs and related facilities? Do they understand the sensitive balancing act of maintaining your customer base while still providing customer service and collections? A billing company should help in your success, not work against it, i.e. partners working in tandem for the same common goal.
Second, can the company provide the services you are seeking?
Can you access your real-time member information from anywhere, anytime, on your computer, via the Internet? Many companies still only provide nightly dial-up modem downloads to update your member files. How secure are your files? Is the company a true (ASP) application services provider with security or do they create files from a legacy system and download them in a batch file? There is a big difference. Do your homework. The companies that have made a substantial investment in Internet technology and security are the only companies that can provide you with a seamless, secure system. Can you access comprehensive management reports? Are they easy to read and do they provide instant information that assists you in maintaining a profitable business? Can your members call customer service and speak to competent intelligent people that are courteous and willing to help with questions and provide the correct answers?
Does the company pride itself in efficient and accurate processing and reporting? Is it willing to customize certain areas to accommodate your specific requests? Is the company reluctant to provide you with personalized services?
Third, what kind of products and services does the company provide?
There are lots of products and services, but what kind of services do you need? Some companies create many products to attract potential customers but only do a few of those services well. Review your club operations and determine your needs. What do you do well, where do you need help? An often-overlooked product is a computerized member check-in system. A computerized front counter check-in system will help you track your member's attendance and payment records. You certainly want to know when a member is attending the club and payments are up-to-date. Can you view your member's records quickly and rely on the information provided to be the most accurate. Is the information in a live real-time environment?
Many companies provide updated records overnight at the very most. This creates a delay and the integrity of your data is already outdated. Only companies that provide 24/7 accesses will guarantee that your information is always the latest available. Does the company provide membership cards, automatic renewal notification via mail and e-mail? Will they wire your money into your account?
Fourth, what kind of payment options does the company offer?
The most popular are electronic funds transfer or EFT, and credit card debits. Funds are debited from your members checking, savings account or credit card on or near their membership due date. This is reliable for you and a big convenience for your members. But what if it isn't convenient or comfortable for your member? Does the member prefer older style billing preferences (coupon or statement)? Are you willing to lose a sale because you are not flexible in your payment processing options? What are your collection options if your member has a payment returned on electronic funds or credit card processing, can you switch their payment method easily to another form of payment. Did your member feel pressured at the point of sale to select a certain form of payment? Maybe you provided an incentive for a particular payment method, that may be contributing to their delinquency? Stay away from companies who hook you up front with inexpensive per debit costs, the small debit price is only the beginning. What other costs do you have? Set up, return fees, minimums, kickout, it's better to know your costs up front than to be surprised later. A company who processes and provides follow up and collection work but only charges you on the amount they collect is far better than a company with a small lead in charge which makes money as soon as you assign your accounts to them. What is the cancellation policy, if you become unhappy with the service provided?
Fifth, what about follow up and collections?
Does the company provide member follow up and collection service? How is this accomplished? What are the procedures, when do they contact your members? Do they call your members? Do they provide toll free numbers? Do they send past due notices? Can you see this activity on your member records? More importantly if your system does not keep you informed about individual member activity how do you communicate accurately to your member and respond in an informed manner? If your billing company is truly an extension of your club, no information should be hidden or withheld.
Conclusion:
Your service partner will help you in your success. By removing the association of membership attendance with payment, your service partner will collect more money from your members than you probably can. They can provide you with the latest products and technology for far less than you could create these products on your own. They will free you up to concentrate on maintaining a solid membership base and a smooth running operation. Any good partnership starts with meeting the needs and expectations of both parties and it is much better if you understand those needs and expectations up-front.
John Chalk is President & CEO of eFit Financial, located in Lakewood, Colorado. His company would be happy to answer any questions regarding billing companies and the services they offer. Phone: (877) 772-3348.
