TREND WATCH
With the coming of every new year, it’s important to take stock of the hottest trends in the industry to decide which ones your club will be a part of!
“The good news for 2009 is that many of the new and developing trends in fitness are easily layered on and integrated into the current model,” says Ed Trainor, Vice President of Fitness Services for Town Sports International. He foresees the adoption of products and programs that are designed to fit into people’s lifestyles. “Think of it as ‘Fitness Lite’: a softer, easier-entry fitness model that is less threatening, yields results and combines what you do at the club with the other two demands in your life: work and home,” he says.
Geoffrey Dyer, Founder of Lifestyle Family Fitness, expects to see continued proliferation of franchises and niche clubs with lower prices that will compete with the larger clubs. “This makes it more important than ever for clubs to cultivate a strong, loyal customer base, and they can do it by identifying what makes them different and stronger than the competition,” he says.
“One-on-one personal training will continue to be a key factor for operators in the years to come. Look for personal training to continue to trend upwards,” says Royce Pulliam, CEO of Urban Active. He adds that personal training should play a large role in your club’s top and bottom lines. Since this is still an area where consumers are spending money, Pulliam urges owners to view it as a way to prop up revenues by promoting it as a lifestyle change. Trainor agrees, and also sees a huge opportunity for enterprising club owners to build a new model of personal training that allows trainers to touch and supervise hundreds of clients and not just the few they personally train. When developing your personal training program, Chuck Runyon, Co-Founder and CEO of Anytime Fitness, cautions against putting too much pressure on members to take part, saying that it could backfire and turn them off to your club. Instead of high-pressure tactics, brainstorm to figure out creative ways for trainers to reach out and develop relationships with more members, since this strategy remains one of the best ways to increase revenues in this area.
FIND YOUR FOCUS
In 2009, figure out what your club does best and market it.
According to Joe Cirulli, Founder and CEO of the Gainesville Health and Fitness Centers, it is important to know where your strengths lie. Once you have determined what they are, focus on making sure the marketplace also knows what you do best. For example, are you best known for your group classes, or for personal training? Are you the gym for athletes, or for the beginner? Are you more wellness oriented, or more fitness oriented? “Don’t try to be everything to everyone. Decide what you stand for and what you are good at and execute it,” says Chuck Runyon, Co-Founder and CEO of Anytime Fitness. By figuring out and marketing your greatest strengths, you can avoid using low membership fees as your only point of difference, which can be a tough way to go unless every aspect of your business is based on lowering expenses.
THE HIRING GAME
An exceptional staff can really make the difference with every aspect of your club’s business, so keep greatness in mind during every step of the hiring and training process!
“Service is the key, and service is delivered by the staff. A big challenge in our industry has involved the training and turnover of our employees. We all know that keeping and retaining members is a better financial model than trying to find new members every month, but we need to realize that this also holds true with our staff. Most club owners already know this, but many of us just don’t do it well,” says Trainor. He adds, “The hotel industry has figured it out, and we need to learn from them. First, we need to hire friendly individuals who really like working with people and understand service. Then, the effort and time we take training them will pay off.” Runyon and Pulliam agree. Both recommend that club owners spend more time on the front end of the hiring process, taking time to find smart people – regardless of industry-related experience. Then, invest in thoroughly training new hires so they are fully versed on your business and club culture before turning them loose.
“It’s also time for the fitness industry to attempt to figure out how to build staff teams around more full-time employees. We’ll likely always have positions that resemble free agents, but we need a compensation plan that builds itself around performance annuities where trainers and group exercise instructors are paid for the number of members they touch; personal training can’t have client penetration in the single digits, says Trainor.” Sheldon Zinberg, M.D., CEO of Nifty After Fifty, agrees, citing employee training and full time positions with reasonable benefit packages as the most important areas for club owners to focus on to develop an exceptional staff.
STRENGTH IN NUMBERS
A well-managed, results-oriented group fitness program can draw in new members and keep them engaged, which can also help boost retention.
“Group classes can’t have client penetration in the single digits, and companies like Body Training Systems and Les Mills have figured that out and developed a formula and matrix that tracks class attendance and identifies poor-performing classes. Their model also changes class music and programming every 90 days to keep instructors and members engaged with a fresh experience,” says Trainor. Dyer agrees, adding “As more clubs learn how to compete against no-frills, low-priced competitors, I expect group fitness programs to be a point of difference. Clubs need to figure out how to use it in this way.” Pulliam says mind/body programming like BeamFit also remain very popular, adding that meditation, yoga and pilates will continue to be a big draw.
DEVELOP YOUR CLUB’S CULTURE
How members view your club is more important now than ever before.
Runyon says developing a distinct club culture and personalizing the experience members have is one of the best ways to differentiate your club in 2009. Give some real thought to your reputation in the community. How do you think members would describe your club to friends and family? If you aren’t sure, ask! Once you have a good idea of how others view your club, it will be easier to determine problem areas and decide where to make adjustments.
According to Trainor, clubs don’t really sell themselves – their members do! Consumers don’t want to be sold in the traditional sense – they want to make decisions that they feel comfortable with, have some control over, and above all recognize the value in. “Clubs should focus on developing a brand and a reputation that their members can easily identify and can find enough value in to make them want to share the experience with family, friends and co-workers,” says Trainor.
SERVICE, SERVICE, SERVICE
Always a focal point, in 2009 service could be the difference between making it… and making it big!
“Focus time on doing more than members expect” says Dyer. Existing members could become tomorrow’s ex-members if you aren’t careful, so provide exemplary service to keep them coming back. The relationships you establish with members are so important when it comes to retention, so figure out ways to encourage more employee-member interaction. Also, as Mike Feinman, COO of Gold’s Gym International points out, service extends beyond person to person contact with members to include cleanliness, a non-intimidating sales approach and goal-based programs that deliver on promises. Basically, every point of contact members have with your club should be top-notch, so take a day or two and observe what is going on, then develop a plan to get on top of your service game for the new year!
CONSIDER THE EXPENSE
Cut back on spending without sacrificing quality by getting creative and terminating programs and services that are draining positive cash flow – NOT by cutting membership dues!
“2009 will be one of the most challenging years we have experienced. Focus on club level unit economics and squeeze your business without damaging it,” says Royce Pulliam, CEO of Urban Active. Dyer agrees, stating “Club owners need to be more conservative and manage their expenses more closely.” But don’t just blindly cut advertising and marketing dollars. Instead, find creative ways to stretch your money, reach more people and get ahead of the competition!
Pulliam warns against discounting membership dues to reach new members. Instead he encourages club owners to get creative and promote the benefits of a healthy lifestyle and the importance of fitness. Runyon sees the importance of this as well, stating “Owners must get better at educating and motivating members on the benefits of better health and fitness. If they don’t see the value, they won’t invest in monthly dues.”
THE SKINNY ON NUTRITION
Diet and nutrition have always been, and will continue to be, key players in the development of a healthy lifestyle.
“Individualized nutritional programs that are cost effective should be coupled with customized fitness programs aimed at changing body composition to decrease the percentage of body fat relative to the percentage of lean muscle mass,” says Zinberg. According to Feinman, it’s important for nutritionists to focus on fitness and nutrition, since both are critical to health. Runyon cautions club owners to choose nutritional guidance programs wisely, and to make sure that any service you pay for contains information that can’t be easily found for free on the web.
WHAT ABOUT RETENTION?
Given the tough business climate, people will be more discriminating, so as an industry we need to find ways to satisfy these increased standards.
“Just take care of business – you can’t control the uncontrollable, so don’t waste money trying to. Our industry has been trying for years to conquer the attrition battle; move the needle by handling cancels face to face if you’re a small operation. It works – I’ve done it,” says Pulliam.
Most clubs know how to sell new memberships, but it’s just as important to keep them around for the long term. “If we extended the life of every member by just one month, think about the effect it would have on the bottom line,” says Dyer, adding “The key to retention is figuring out ways to keep your members engaged and using the club.” To do this, remind members of the value they receive and reach out to members who aren’t using your club, advises Runyon. One thing everyone seems to agree on: don’t just keep lowering dues! For practical reasons prices can only go so low. Instead, be different and provide things your competitors are not to fill latent needs.
THE AGE GAP
Both seniors and children can offer health clubs the opportunity to tap into niche markets, but it’s essential to understand the unique needs of these very different demographics before running your play.
“In light of the epidemic rise in obesity and type 2 diabetes, both children and seniors are in need of specialized fitness and nutritional guidance programs,” says Zinberg. Clubs should work hard to find the right instructors and the best programs for these groups. Both Runyon and Pulliam point out that, when it comes to kids’ fitness, healthy lifestyles start at home and healthy, active parents are more likely to have healthy, active kids. Find ways to reach out to entire families in the community.
“Some seniors are demanding active recreational opportunities such as hiking, running and swimming rather than the more passive recreation this demographic has enjoyed in the past. According to some studies, senior fitness favorites are yoga, spinning and personal training, so consider promoting your senior programs around these activities,” says Pulliam. According to Feinman, Gold’s Gym has joined forces with AARP in an effort to reach out to the senior population, acting on a trend that he feels will continue to play well for the entire industry.
LAW OF THE LAND
Keep an eye on government – from federal to state – and stay on top of new legislation that could affect health clubs.
“Owners need to be aware of what’s happening at the state level. Tax initiatives are happening across the country as government looks for ways to generate more revenue. On a national level, we need to encourage ideas like the one offered up by John McCain, proposing that health club memberships should be tax deductible,” says Pulliam. Runyon advises club owners to stay informed on the music licensing issue, and he also says everyone should keep an eye on the WHIP and PHIT Acts, which aim to make health club memberships and fitness expenses more affordable and accessible. The AED Act is another piece of legislation to watch, which hopes to make Automated External Defibrillators (and people trained to use them) more accessible in public places.
