After speaking to our Advisory Board, they pretty much all agree, 2011 was a good year. We asked them to reflect on what was good about 2011 and what they are looking forward to in 2012, both for their clubs and industry-wide. Here are the questions they were asked: How was 2011? What was successful for your clubs? What is your agenda for 2012 in terms of club growth and retention for your clubs? What are your new initiatives that you will focus on and why? What challenges do you see in 2012, across the industry but define it for you and your company and how do you position yourself for success in 2012? What opportunities do you see in 2012 for club operators and what must they do to take advantage of those opportunities?
Find out what they had to say and see what you can do to help make 2012 even better than 2011!
Mark Fisher, President and CEO, Sport&Health
2011 was a successful year for Sport&Health, it opened one new club, acquired one club and fully remodeled six existing locations. The existing locations experienced the remains of the national economy so thus same store revenue is only up 2 percent, but overall revenue is up 10 percent according to Fisher, with non-dues revenue exhibiting significant growth.
“Regarding retention we have several new initiatives focused on member engagement by leveraging new-to-market technology,” Fisher said. “We continue to explore and invest in technology as we believe it is the cornerstone to member interaction and engagement.”
He sees continued competition from both big boxes and studios and it will force Sport&Health to stay focused on their mission. “The current trend of dues rates remaining relatively flat or even decreasing in some cases, will force club operators to do a better job of penetrating their existing membership bases with non-dues revenue initiatives.”
Fisher sees a couple opportunities for clubs in 2012. Clubs should recognize and leverage the continued trend of dynamic and small group training. They should also recognize the difference in attrition rates between new members that get involved at their clubs immediately and those that fend for themselves and create compelling programs to close the gap. He also believes building relationships with medical-based wellness providers, and the medical community in general, and having a seamless integration for members will be advantageous.
Bill McBride, President and COO, Club One
2011 was a solid year for Club One, adding accounts and growing its membership base. In terms of 2012, “We are growing in the Medical Fitness management space and enhancing our club offerings with more smart technology to better serve our members from a member knowledge perspective,” McBride said. “People are consuming information in a different way and they only want relevancy, their way, when they want it. Serving the needs of your customer by truly knowing what they want is more important than ever.”
New member sales and creating customer loyalty are a continued challenge in 2012 and at the forefront of everything for Club One. Opportunities for 2012 have to do with understanding that the world of consumer information is changing as is the world of marketing. “Knowing that marketing and the customer experience are more intertwined than ever before and our ‘marketing department’ is really more about our advocates and overall membership base than ever before. Seventy percent of consumers learn about you online before they ever set foot through your doors.”
Bryan Murphy, President and CEO, Gold’s Gym Houston
The success of 2011 had little to do with the year itself and more to do with the effort, processes and procedures that were put in place in 2009 and 2010. Late in 2008, new revenue streams were created and improvements were made to existing ones.
“As far as new, we initiated a ‘youth performance program,’ creating a group circuit training class for kids ages 7 – 17. By the end of our first year we had enrolled 1,400 kids. We began selling internal billboards in our clubs, which are $250 – $500 per month on 12-month terms,” explained Murphy. “We added a ‘membership save program,’ where all members who inquire about terminating their program go through a process in which we work harder to understand the reasons why, and from there we go on to get them committed again. With this new effort we are saving over 30 percent of all cancellation inquiries, and of those more than 30 percent are enrolling on new terms for 12 months. We have also rolled out fee based group exercise. We expect to add over 300K a year in revenue in this new program, without this effort eroding our current personal training program. The margins on this are well above 50 percent.”
In 2012, Murphy is looking to add more units and explore the Express Platforms as well. He said the new age gym owner will continue to be less dependent on membership revenue and instead drive non-dues based reoccurring revenue streams.
The opportunity for 2012 is closing the back door. “Keeping in touch with our best business (our current business), and putting as much time, money and effort into keeping [members], as we try to gain new members, will be a real opportunity for many. A commitment to being brilliant at the basics will provide many the edge they need to enjoy a great 2012. No one is short of great ideas, but the continued failure to execute will cripple many of our fellow club operators.”
Murphy suggested looking into group personal training programs, maximizing in-house add-ons like enhancement fees and youth initiatives as a source for new membership for ideas for 2012.
Royce Pulliam, CEO, Global Fitness Holdings (Urban Active)
In 2011, Urban Active opened two new stores and continues to look for locations for 2012. Group X classes and personal training were successful for the clubs; Pulliam said people are continuing to show the need for more specialized training.
“We are looking at opening four new clubs in 2012. At the club level, we closely look at the needs of our customer. They want to feel free to have a conversation with management,” Pulliam said. “They keep up with the new trends in fitness and want to see that in their local gym. We have found that social media is a great way to reach and retain customers.”
A continued soft economy could prove challenging for retaining and securing new members, he said. “I believe you have to have a constant source of communications with your clubs and your clubs’ members. Customers love one-on-one time and we always want to give them what they want. They will tell you if you give them a chance. Two-way social media connects management to the people who walk in your club every week; listen.”
Ralph Rajs, Vice President, Leisure Sports Inc./ClubSport
The year has been a mixture, the first two quarters were strong but third quarter came up weak. However, through three quarters membership has grown and so has revenue in seven of eight properties. “Financially, 2011 will be stronger than 2010 partly because of the revenue growth and partly because of some expense reductions,” Rajs explained. Personal training revenue is up 7 percent over last year and small group training has helped.
For 2012, the company is looking to get better at its core competencies — family membership, family dues, family programming, family value. As far as new initiatives, sales fundamentals and procedural discipline are high on the list. A value added membership category called “GoldPlus” will be introduced that gives members discounts and special offers when they upgrade to a higher dues category.
“I think the biggest challenge is knowing what to do with a dues increase — if you do one, how big; how big will the cancel setback be and how long will it take to overcome that?
“We are looking at ways to increase ancillary spending from each membership, even if it’s a couple bucks per member. The key will be to get the margins right, so it doesn’t end up being a lot of effort for nothing.”
Chuck Runyon, Founder and CEO, Anytime Fitness
2011 was a strong year — with Australia surpassing its 100th club, Anytime Fitness will soon be open in 10 countries and counting.
In 2012, from a member perspective, Anytime plans on continuing to focus on delivering a club culture of personalized service, inspiration, education, compassion and fun. From a franchise experience, continuing to provide a wealth of education, tools, and resources to enable franchises to grow.
“Member retention has historically been a challenge for our industry. Fitness clubs can either treat members like cattle and spend all of their time and resources churning new members while existing members walk out the back door to other clubs. Or we can learn to treat our members like family — genuinely caring about their hopes and dreams and helping members achieve their goals,” Runyon said. “Existing members are our best potential sources of referrals. Our challenge is to turn them into ambassadors for our industry and our clubs. The way to do that is to give them the attention they need to succeed and the tools they need to spread the word.”
Jeff Skeen, President and CEO, Titan Fitness (Fitness Connection)
To date, 2011 is outperforming 2010. In addition to an acquisition, the company has been able to implement new methodologies that have allowed it to improve the number of members its enrolling as well as increase personal training revenue and profits.
“We are in the process of acquiring another health club chain acquisition as well as talking to wellness companies who are interested in selling to us,” Skeen said. “We are currently working on integrating wellness services into our company to allow us to attract the 85 percent of the population we are not reaching, as well as improve the overall experience for our current members.”
He sees the challenge for 2012 is integrating wellness and medical services into the business so that more people throughout the U.S. can be reached. The opportunity is working with the medical community. “To take advantage of this opportunity, health club operators need to take time to meet with medical professionals to gain a better understanding as to how everyone can work together.”
Peter Taunton, Founder and CEO, Snap Fitness
2011 was one of the most successful years both for Snap Fitness clubs and the company as a whole. The brand is growing internationally in Australia, New Zealand, Mexico, Canada and India. Overall, clubs’ membership sales increased by nearly 5 percent over 2010, said Taunton, while also increasing profits through other revenue streams including personal training and easyFIT, a new personal activity program.
“I feel that our increased efforts in the online and social media space will help our clubs to better engage members and retain them, by creating a community of helpful tips and ideas, combined with motivation and encouragement from members and staff alike,” said Taunton. “We’ll be placing more emphasis on mobile marketing and wireless wellness in 2012, providing mobile apps and new personalized online tools to give members more value for their money. This will also allow us to make more inroads into the corporate wellness space, helping more individuals to get healthy.”
The challenge for 2012 is stagnation — with member expectations changing constantly along with technology the industry must be ready to change with them. “It would be foolish to think that the same expectations members had even 5 years ago when it comes to their fitness club experience will be the same today. It’s important to adapt and evolve. We are continuing to find new ways to offer members more flexibility with their workouts, without compromising on quality. By incorporating things like our new Fitness On Demand group fitness program into our clubs, along with enhanced online tracking and social media rewards programs, we continue to bring fitness to our members and make it easy and accessible for them to get the results they want.”
Taunton believes the opportunity lies in creating a sense of community in clubs using online and social media programs, to rekindle the relationships that technology has broken down. -CS
By Ali Cicerchi
