In my previous article ( http://fitnessbusinesscanada.com/editorials/purchasing-equipment-a-few-tips/4188 ) I gave you a few tips on purchasing equipment for your facility. This month I am offering a couple more.
Make sure “good enough” is actually good enough
Your goal should be to spend as little as you “have to”, but the key is to accurately determine what “have to” means. On the customer side, there is always a tendency to want to believe that they can get away with spending less. This is natural; nobody wants to spend more money than is necessary. At the same time, you can’t let your desire to spend less affect your objectivity. As per my previous article, your equipment has to fulfill your brand promise, and it has to be well-suited to your members wants and needs. What is the experience that you want your customers to have? More importantly, what is the experience your customers expect to have?
I have often heard customers say “my customers won’t know the difference”; this may be true, but is that the point? Perhaps they don’t notice it consciously, but much of their experience isn’t happening on a conscious level. Yes, they may not be able to articulate the differences between different qualities of equipment, but they can often see/feel the difference.
I wish there was a more tangible piece of advice I could give here, a checklist or methodology that I could share with you. There isn’t, it is more art than science. The only advice I can give you here is to be aware of your own personal bias towards wanting to spend less.
What is costs today is not the only cost consideration
It would seem obvious that when you’re purchasing gym equipment you need to consider the cost of ownership; however, this is another are where the “spend less” bias comes into play.
To make a somewhat obvious point: Option A costs $50,000, Option B costs $75,000, but Option A will have to be replaced after 5 years while Option B will have to be replaced after 10 years. This means that Option B is actually the cheaper option.
Faced with this scenario many buyers still choose Option A because…
• They don’t have hard facts that prove that the options will actually last as stated. They believe (or want to believe) that the person selling Option B has to claim that his products will last twice as long. This creates skepticism in the buyer, who is (as mentioned) looking for a reason to spend less today.
• They don’t have $75,000, they have $50,000
• They are worried about today, not 5 years from now. They need to survive the day, month, or year, and worry about the future later.
These are all good reasons, and the above scenario is a bit simplistic, but the point is that you must evaluate the cost of ownership as much as the cost of purchase. The other piece of advice is to look at how the purchase amortizes over time. For example, a recent customer was looking at some lower-grade commercial equipment versus ours. He fully understood that the competition’s unit would not be as good, but he felt like he didn’t need the top-of-the-line in this case. I actually agreed with him, but also pointed out that the difference in price may be a lot today, but when looked at over the life of the product (not even taking into account that ours would last longer) would be $50 a year! This consideration changed things for the customer and allowed him to evaluate the purchase differently.
The lesson I am trying to impart is that the purchase of the right equipment is very important to your success, and you should be aware of your biases when evaluating them. There are times to spend less and there are times to spend more; hopefully the above points help you clarify that for you.
Mill Pond Publishing Inc.
30 Mill Pond Drive
Georgetown, ON L7G 4S6