Optimize for the Right Goal

I recently signed up for a racquetball league at my local gym.  League fees are $65 (whole season) and gym membership is $150/month.  When I went on my league day I noticed 83% of the 12 racquetball courts were unused.

Here are some important details about racquetball courts:

1: They take up physical space.

2: Once you add a court there is very little maintenance cost.  90% of the cost is the addition of the court.

Here is something to note about racquetball as a sport:

1: You can’t play alone.  You need a partner, but it’s socially awkward to just walk up to someone who is playing with someone and introduce yourself.

As a result, most people who are interested but don’t have a partner will never signup to the club in the first place.

The CFO of this club is interested in selling $150/month memberships, which is understandable.  But I believe they would be better off thinking about club asset utilization.  If I were CFO I would focus on ideas to get my racquetball courts up to 90% utilization.  For example, right now non-members can’t enter the club.  I would change this in 2 ways:

A: Allowing non-members who only want to play racquetball to book a court (that isn’t being used by a member) for $5/hour.  This way members always get first dibs but if they don’t use the court non-members get access.  Once utilization goal has been met we can always reexamine the policy.

B: Having a signup sheet so people who don’t have a partner can find one.  Because if you don’t solve the partner problem A: is pointless.

What’s likely going to happen is that a good percentage non-members who signup for just racquetball will look around and notice other facilities (pools, running tracks, tennis courts, saunas, yoga classes, basketball courts, weight rooms, etc.) and come to the realization that membership fees are worth it.

So, by solving the utilization problem the club will also solve the membership problem.

I know I’m grossly oversimplifying but I hope you get the point.

So, start using this thinking to your online store too.  For example, improving the sales of your top selling item by 7% is an important goal but what’s even more important is to get 10% more people who don’t see that top seller product page to see it.

4 thoughts on “Optimize for the Right Goal

  1. Congrats on taking up racquetball. I just started again in January (after playing my last game in 1989!) and the club I joined has a $70 annual membership fee with “round robin” games on Saturday mornings as well as Tuesday and Thursday nights in which you pay about $10 each time to play but there are people always available to play either singles or doubles. This solves the social awkwardness of finding someone to play and it’s pretty reasonable.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s