Expanding the Footprint
Who said the president of a successful company had to be over the age of 30? After speaking with the President of O2 Fitness Clubs, Michael Olander Jr, age was discovered to be an insignificant number that means nothing. The young individual has successfully grown a club he started with his friend Kevin Hedley in 2003 to be the largest, independent privately-owned fitness chain in North Carolina. By the way … Olander is only 27 years old.
Michael Olander isn’t the typical guy in his late 20s. He’s focused, driven and has known for almost a decade the best way to develop a club. He understands exactly what it’s like to be looked at as a young individual in an aging industry, but he has let his company speak for itself.
Olander dreamed of a club that was about the member experience. He desired a place where people enjoyed going and has worked to make the experience pleasant. “I want people to be happy when they are in our clubs,” Olander explained. “I want them to be happy when they leave, and especially when they talk to their friends about their experience.”
The member experience has led O2 Fitness to have outrageously high referral rates. “We are trying to get away from mass, unfocused external marketing as much as possible,” Olander said. “While we do continue on a certain level with TV, Direct mail and print, the majority of our sales come from member referrals.” O2 hosts referral programs like “refer a friend and get a free month,” and about twice a year they will have drawings for members who referred friends. “Last year we had a woman win a trip to the Bahamas,” he said. “She sent back tons of photos and one that had ‘I love O2 Fitness’ in the sand. We put them up throughout the club — it was great.”
Olander has spent a lot of time working with Hedley trying to figure out ideas to make the experience greater. They have included separate Express Rooms since the beginning that have given members a secluded space to get through express workouts quickly. Olander has teamed with local radio stations to provide monthly mixes for members to enjoy in the express rooms.
The mixes provide members with 30 seconds of music and 15 seconds between songs for resting, while members cycle from a piece of strength equipment to cardio, giving them both an aerobic and anaerobic workout in 30 minutes.
Like many clubs, O2 has created an atmosphere that resembles a movie theater. O2 has decided to put a minor spin on the highly used concept. “We have 12 different plasmas on the walls showing 12 different things,” Olander said of his cardio room. “It gives people that opportunity to disconnect from their blackberry for a minute, do their cardio and come back out refreshed.”
The O2 experience is one that has brought high rewards back to the club. Olander said that the club has maintained a closing percentage at around 70 percent. “Guests created from external marketing can be a tough sell and often unqualified, but our whole team works together to provide the experience that we believe leads to the sale in the end,” he said.
O2 in the Beginning
As an out-of-shape adolescent living in North Carolina, Olander found an outlet in fitness. He became dedicated to fitness and watched it transform his life. He spent time in high school and college trying different clubs as a member. By the time he was attending the College of Charleston in Charleston, S.C. he had developed a better design for launching a club.
From the very beginning, O2 Fitness has strived to think outside the box. Not only has Olander seen things about modern fitness clubs that he doesn’t enjoy, but he has also developed inventive, fresh ideas.
The name O2 Fitness came about for Olander and Hedley when they were trying to be on the cutting edge of fitness. They developed an outrageous idea to pump oxygen into clubs to improve athletic performance. “It wasn’t economically feasible, but we had already paid the state filing fees, so the name stuck,” Olander said. “You get into all sorts of different government rules and regulations, not to mention the cost was prohibitive to continuously pump oxygen into the air. But, oxygen sustains life and we wanted to get that idea across to our members and our team — something that is positive, refreshing and life giving .”
The name had been developed and while most college students were partying or rushing home to see their high school girlfriends, Olander often found himself rushing home to spend time developing his new business. “We started with these small studio clubs,” he said. “Then we built this gorgeous club in Cary, N.C. where we were putting 1,500 people in 11,000 square feet. We were good at building our brand and in 2008 we built our first large club that was 25,000 square feet at Brennan Station in Raleigh, N.C. Since then, we have added three more at that size, and have two even larger locations in development for 2010 openings.”
Over the past couple of years, Olander and his team have had to get used to the idea of not being a small club, but becoming a large organization. “One of the biggest challenges we’ve faced over the past two years has been going from a small, tight-knit operator to the size we are,” he said. “Going forward, the goal is to build strong management teams from within. Every General Manager we currently have in place has started at a different position in the company and grown with us. On the upper management side, Kevin and I both continuously work to improve ourselves in our roles.”
O2 Fitness feels that it needs to empower every general manager, sales person and front desk manager. They want their team to feel like they have ownership over the company, while at the same time holding them accountable to key performance indicators.
“We truly believe that our associates need to be believable as a fitness professional and must be a role model for our existing and potential customers and staff members,” Hedley explained. “We have found that it is better to promote from within and teach our people the fundamentals of customer service, exercise adherence and psychology, successful member integration and follow-up before we allow them to sell or manage for us.”
As this article was written, the team prepared itself for a celebratory vacation to Mexico. Olander told all the general managers, membership consultants, fitness directors and front desk managers that if they worked together to hit a lofty sales goal in the month of January, they would be awarded with the vacation. “They blew it out of the water — now we have to pay up,” Olander laughed.
“Our goal is to give our managers the direction, constructive feedback and support they need to succeed. If we provide those items, they have no reason to not be held accountable for their own successes and failures. We’ve found that once managers are given direction and proper feedback, no one will work harder for the overall success of a club than they will. We like the managers to be self-starters. Everyone wants direction and everyone wants to succeed.”
Growth always has been on the mind of Olander. He’s constantly thinking about what will come next, what new idea can be implemented and when?
“When you’re young you want to come up with these ideas and get them started immediately,” Olander explained. “Not that I’m old, but I’ve learned as I’ve gotten older that success is developed through patience.”
Every Wednesday, Olander and Hedley meet in a conference room and hash out new ideas. “In the beginning we would come up with these wild ideas and get them going immediately,” Olander said. “Now, we will come up with an idea and toss it around for weeks between each other before we even mention it to our managers and other team members. In the end, we probably implement 25 percent or less of our ideas, but hopefully they are well thought out and executed properly.”
While developing new ideas, there has been a constant challenge for O2 Fitness to define the meaning of customer service. “We are trying to figure out what customer service really means and we want to shift towards providing a better experience for our customers,” Olander said. “We have great group exercise areas and locker rooms. We try and promote common areas for people to get to know each other.”
The club understands that it needs to continually push people and make people happy with fitness. “We are putting together a book of member testimonials,” Olander said. “Being on the business side, you tend to forget how important, and life changing fitness can be to people, and this serves not only to inspire members, but our teams — myself included.” The success stories will be put up in the clubs along with personal trainer profiles and stories. The plan is to inspire our members and let them see the changes they’ve had in their lives. We’ve been doing the same thing with Facebook as well, launching testimonials and eliciting member feedback.
“We try and open things up for feedback and we want people to feel that they are part of the process,” he said. “We strive to use it as a tool for community building and member interaction, asking questions like ‘what’s your favorite class and why,’ not just telling them there will be a new class at 5:30 on Tuesdays. People are writing positive things loaded with exclamation points and we’ve gotten a lot of feedback on testimonials. A lot of testimonials are unsolicited — people writing about how they’ve joined and lost five pounds and now they can run around with their kids again. This is very powerful both as an inspiration to other members, and to a prospect browsing the Web for fitness options.”
The Personal Touch
Olander was born and raised in North Carolina. However, his family hails from New York and moved to North Carolina to open what has become a successful restaurant business. “I’m the first in the family to be born and raised here,” Olander said proudly.
From early in his life, Olander was immersed in business and the culture of entrepreneurship; it is something he feels is in his blood. Also, the concept of charity and giving back has been a concept that was instilled at an early age.
“We’ve always been really involved in the community,” Olander said. “My mother always has donated a lot of her time and energy to children’s charities and that’s given me something to strive for. We do a lot for the communities. We give out over 250 years of membership time to charities to use in auctions each year. We probably donate 500 free personal training sessions a year.”
The idea of community has been something that O2 Fitness always has believed would help to make their brand successful. Several times a year Olander sends his personal trainers, suited up in their O2 Fitness shirts, to local 5K and marathon races. “They aren’t out there to directly sell people,” Olander said. “We send them out there to give people pre-race advice and help them stretch. In about 1,000 bags we put a guest pass that says, if a person uses this guest pass and joins O2 Fitness, we will donate $25 to the charity they ran for.”
In March, O2 held its first O2-organized charity event, “Pedal for the Playground,” at their Brennan Station club. Nearly 40 members and staff participated in a three-hour spinning class. The riders raised money for the charity, and O2 pledged to donate $100 for each rider that finished the whole three hours. In the end, 31 people finished and the total raised exceeded $20,000.
O2 Fitness has created a company that sets lofty goals and strives to conquer them. In 2010 they set a charitable goal of $50,000 and by March they were over half way there. For 2011 they’ve doubled their goal to $100,000 and have decided to hold more O2-sponsored charity events.
The 27-year-old Olander, Hedley and the rest of the team at O2 Fitness have reached a point where the club itself could be marked as a successful business. However, the team has refused to take hold of the belief — which may be the key to their future success. “We’ve decided to continue to think like we are still at the turning point.” Olander said. “We never want to reach a point where we aren’t thinking about growth and the future, and most importantly, what can we do better.” -CS