How Airlines Can Teach Health Clubs to Have Best Financial Year Ever in 2017
A few years ago, many industries shifted their business models to seek more ancillary revenue opportunities to generate more bottom line success. These small shifts in business models can have a massive impact on the bottom line.
Take the airline industry as an example. In 2013 and 2014, many airlines around the world started to introduce new service categories across all offerings. Previously, there were just two types of carriers: 1. Low-cost airlines that were coach-only; and 2. Those offering coach-only and first class.
Premium airlines that had higher-cost structures struggled to compete with coach-only competitors. They had to look for hidden opportunities and, many succeeded. They took a leap of faith and introduced business class and premium economy.
Since reducing the amount of coach-only seating and pricing (scary proposition at first), and introducing a new level of seating – premium economy – more travelers chose to travel this way and thus, profitability went way up.
Why should club owners and health and fitness clubs be any different? (Remember, there was ZERO demand for an iPod before Apple launched the iPod.)
Let’s draw the parallel — if personal training is equivalent to first class and large group exercise offerings and gym floor are coach – what’s in between? We are in the health club business not airlines, yes, however our role is to take members on a different journey and to a different destination — but more importantly, keep them coming back.
So, what’s in between? What’s our “premium economy?” How can we increase our bottom line?
If we can consider a simple move from a one-size-fits-all membership approach to “variable offerings,” it could mean that the business would better meet the needs of different member segments and improve club viability and profits in the process.
One of the most successful and fastest new growth “premium economy” offerings for health clubs in 2017 will be team training. According to Clubintel, the members participating in at least one personal training session declined by 12 percent participation from 2014 to 2015. Conversely, small-group exercise saw growth of 31 percent participation.
The KPI is simple. The number of members seeing the value of small group or team training and paying a little extra should be at least as many (if not more) than the number of members currently paying extra for personal training.
The key is having the systems, and the product that demonstrates value to the segment of members who would be interested in team training once they experienced it and saw how it can benefit them.
To fill this gap and reveal this hidden opportunity, clubs are coming to the realization that if they intend to build a successful team training business within their club, then it should be a club-offered service.
Club owners are quickly understanding that it cannot be a one or two trainer offering and it cannot revolve around any piece of equipment or demographic. This simply wouldn’t build the best team training offerings clubs could provide.
Coaches are also realizing that, there is massive benefit when they have the support of the clubs owner, CEO, marketing departments backing up this club-wide offering.
Easy, medium and hard programs are simply not enough. Just like everyone perceives value differently, people are attracted to different environments. A stand-alone team training department offers a choice of programs that promise results and appeal to both competitive and non-competitive personalities. And different coaches have different skills and personalities that attract different clientele.
Moreover, team training members, just like premium economy travelers, are also some of the most loyal. Make no mistake about it. If we give members the option to become “premium economy” by joining a team, this will increase engagement, loyalty, retention and offer continuous referrals. They will buy more smoothies (teams like to socialize after team sessions), use wearable technology longer, refer other friends, family to the club, creating a huge culture effect within the health club itself.
Your team training department must focus on the three key stakeholders of any fitness facility. A win-win-win scenario must be achieved for clubs to be successful in this department.
- The Member: Members must receive incredible experience in their preferred environment of choice; they need to make authentic meaningful connections with staff and other members alike. They must experience non-stop measurable progression where they will see and feel value in this department.
- The Coach: Coaches must have a clear defined delivery system that members can recognize. It must contain cutting-edge programs and a clear periodic goal for members to achieve and be rewarded.
- The Business: Must have a facility-driven system to promote and support coaches to execute within their rules.
Imagine asking an American Aadvantage™ Gold member, or United Airlines Platinum Premier traveller to fly with another airline: It will take an awful lot to convince this traveler to fly with a new airline.