Perfecting the Payment Process

payment

When Eric Allen asked an Affiliate how he tracked payments at his Box, he was told that members left cash with Sticky Notes on the owner’s desk.

“Whenever you ask an athlete for that cash, because you will have to ask because they’re not going to just bring it to you all the time … it gives everybody an out,” said Allen, the vice president of business development for Wodify.

Streamlining the payment process is far from a simple, easy change. With that said, what should an Affiliate consider in this process when it comes to his or her business?

“Having something automated, I think, makes it a little bit more painless on the athlete and really ensures that the Box owner is going to get their money,” said Allen. “Yes, change is hard. Yes, it’s not going to be super easy. And yes, it is going to take work. But we are business owners, so you should be expected to work.”

Once the payment process is automated, it becomes less of a hassle. In fact, Gabriel Haas, the co-owner of CrossFit Orlando in Orlando, Florida, offers a $20 discount for any member who signs up for automatic payments. At the end of the month, all Haas has to do is print a report from his software, Front Desk HQ, and see if any payments failed. “It really does make it simple, which is what it’s all about,” he said.

Automation was one of the aspects that drew Matt Scanlon, owner of CrossFit Memorial Hill in Kansas City, Missouri, to Wodify. He doesn’t want to interrupt his other business roles in order to handle cash and checks. When people drop in at his Box, the visitor’s payment and drop-in process is done entirely online. His members can also take care of paying their membership outside of the Box, so when they walk into the gym, they can simply enjoy being there.

Plus, by streamlining, Scanlon said he is removing one more barrier to fitness. “We struggle with getting people to commit to a healthy lifestyle enough, and then if you’re going to try and throw the exchange of money on a monthly basis on top of that, that’s just one more roadblock in the process,” said Scanlon.

Some Box owners might refrain from streamlining their payment process because it means paying credit card transaction fees. Depending on the software, Affiliates have the option to choose their processor, that would be in charge of those fees. However, in Haas’ opinion, it ultimately doesn’t matter. “A lot of it boils down to, you’re going to get screwed no matter what by credit card companies,” he said. “They’re going to make their money everywhere they can, so you just have to limit the amount that they are taking from you.”

That means paying attention to hidden fees, as well as making bulk, monthly transactions versus daily credit card charges. Despite the fees, Scanlon said he continues to benefit from his streamlined, automatic system.

He has found this by asking himself three questions:

How much does it cost to put on a class, from labor to utilities?

At your gym, what is the average revenue per member?

How many members are needed in a class in order to break even?

“There are all these costs to running an Affiliate, and that delivery of service is that class time. And if you don’t know what the delivery of your service costs … then you have no way of budgeting or setting your prices accordingly,” said Scanlon. “Having that data would really empower a lot of gyms that are struggling.”

Data can tell a gym a lot about its business, said Allen. He also recommends using software to track payments and print reports. Knowing where memberships are coming from and where money is going is key.

However, none of that matters if you don’t have software and a way to track payments from the beginning. Allen said even a six-month-old Box should consider making an investment. When Wodify started and the company had no customers, Allen said they still bought support-ticket software. “You’ve got to think to scale, and that gym that has 25 athletes that says they don’t need software, they might be right,” he said. “They might not need software right now, but when they have 75 athletes, they will need software. And transitioning to that when you have 75 athletes is much more difficult than it is when you only have 25 athletes.”

No software is perfect, pointed out Scanlon. But, he agreed with Allen that automation and streamlining the payment process is necessary. “You should be automating your payments,” he said. “That’s just a no-brainer at this point.”

Heather Hartmann
Heather is the editor for Box Pro Magazine. Contact her at heather@peakemedia.com.