The Third Place: Fitness Connection’s High-Value, High-Volume Model
Fitness Connection was founded in 1998 with the goal of changing lives for the better, every single day. To make that possible, each club is designed to be fun and accessible for everyone, spanning all 40 locations in Texas, North Carolina and Nevada.
“Fitness Connection is the place where members can find like-minded people neutral to socioeconomic status because we are a high-value, high-volume provider,” explained Phil Howard, the CEO of Fitness Connection. “The clubs provide a comfortable atmosphere to workout in, regardless of interest or experience level.”
In fact, the high-value, high-volume model is a hallmark of this ethos. Prior to the early 2000s, many of Fitness Connection’s clubs operated as mid-price gyms. But the leadership team envisioned an opportunity to serve a wider customer base and made the decision to switch to a low-price offering, while continuing to provide full-service, multi-amenity facilities.
The caveat? The emphasis on the “high-value” aspect of the model. “The low price point was intriguing, but we believed consumers wanted more from their gym,” explained Howard.
As a result, for $10 a month, Fitness Connection’s members get far more than simply access to basic equipment and locker rooms. Amenities that are more likely to be found in mid- or high-priced brands are also included, such as women’s-only workout spaces, basketball courts, swimming pools, group exercise classes, free Kid’s Club and more.
“Before Fitness Connection, gym-goers had to choose between paying a low price point for few amenities or a high price point to get all of the amenities they looked for in a club,” explained Howard. “We needed to solve how we could deliver a full-amenity gym at a low cost. Fitness Connection was created as a brand to challenge the status quo in the club industry.”
In addition to lowering the barrier to entry, Fitness Connection also strives for its clubs to be a “third place” for members. As Howard explained, a customer’s usual social environments include their home — or first place — and work — or second place. “A ‘third place’ provides another space to connect and grow with others,” he said.
This combination has proved to be a winning formula for the brand. “Our products and services truly provide opportunities to change people’s lives,” said Howard. “We remove the barrier to entry and sacrifice nothing at our price point.”
Up until recently, Fitness Connection’s mission to change lives for the better was accomplished through two separate leadership groups: Titan Fitness, the license owner of Fitness Connection; and New Fit, the sole licensee of Fitness Connection. LNK Partners, a New York-based private equity group, was invested in both entities.
In fall 2017, LNK facilitated the merger of the two groups, recognizing an opportunity to create something bigger than had existed previously.
“Since both executive teams already had a very close ongoing working relationship, the merger not only made sense but went very smoothly, creating an executive team made up of the best-in-class individuals in the industry,” said Howard.
According to Dal Clayton, the chief operating officer of Fitness Connection, the merger will position the company well for growth, with plans to bring the offering to new markets nationwide.
“With the combined management team we’re really able to get much more specific in our areas of focus, thus facilitating a higher level of proficiency and efficiency in running the business,” explained Clayton. “Maximizing the business potential will allow for significant additional growth.”
However, as is the case with many companies, the biggest challenge for Fitness Connection’s growth will be finding the right people to work on the ground level at new facilities. Therefore, the company is investing a tremendous amount of time, energy and money into not only attracting the right talent, but also developing and keeping that talent.
“The people part is huge,” said Clayton. “If we had to pin down one key to our success, it would be our team, which requires material investments in talent acquisition, development and retention.”
Leading the effort to invest in the brand’s people is Josh Harwood, the chief administrative officer for Fitness Connection. One of his main responsibilities is human resources — or as they call it, the “people team.”
Currently, Harwood is in the process of developing and perfecting a number of human resource functions, including creating an applicant screening process that helps the brand more quickly identify the right fit for the organization.
“We wanted to look at the factors that were important to us when hiring someone,” explained Harwood. “So we’ve developed screening questions and assessments that have been helpful to ensuring we bring the right people on board.”
Promising candidates are entered into the brand’s applicant tracking software, which serves as a centralized hub for hiring operations and also has the capability to automatically post positions as they become available.
“It is definitely difficult finding good people, and winning them to your team is more challenging than ever before,” continued Harwood. “The marketplace for people to find jobs is bigger, better and more competitive, so it’s important to nail down who exactly you’re looking to bring on board. Remember, you’re not the only suitor.”
However, the emphasis on people doesn’t stop at the hiring process. Employee development and training is also prioritized at Fitness Connection, in addition to the creation of clear “career pathways” that provide employees with a structured outline for potential growth.
“Over the next 12 months a goal of ours is to clearly outline the pathway for career advancement for our team members,” explained Harwood. “We have good people who want to know the targets they should be shooting for and what happens when they get to that target, so we want to be more transparent about those things.”
Ultimately, Harwood feels the investments in recruitment and employee development will pay off in the long run. “When you look out ahead, it makes sense to invest in human resources,” he said. “We’re committed to having a great team experience and that’s another way we’re changing lives.”
Howard agreed. According to the CEO, the brand’s people are the secret ingredient that will drive its growth in existing markets and any new ones they decide to enter.
“I’m sure there are others out there who believe they can replicate what we have created,” said Howard. “However, Fitness Connection is much more than the box. It is our team and our values that drive what we do every day. This executive team brings so much experience as operators and understands the nuances of developing the people and product within the box. The clubs are only as good as the team running it.”
This commitment to people, paired with the merger of New Fit and Titan Fitness under one brand, has infused a level of energy into Fitness Connection that is felt from the ground up.
And according to Howard, they are excited to bring that energy to additional markets as the opportunity arises.
“We believe the brand has no limitations,” said Howard. “Fitness Connection is the best value in the fitness industry and we are not afraid to claim it. We created a product that consumers want and our people deliver it every day. We hire people who want to wake up each morning knowing they are going to improve the life of someone else. Connection with someone like that is a powerful motivator.”
BONUS: Sales Lingo
Fitness Connection’s goal is to ensure customers feel comfortable and welcome during every interaction they have with the brand. According to Larry Lawrence, the company’s chief sales officer, that begins with the initial sales process.
“I think the biggest thing is how you treat the customer when they come in,” he said. “You still have to have skilled sales professionals understanding when and how to deploy sales tactics, who possess the emotional intelligence to make consumers comfortable in, at times, what can be uncomfortable dialog — while discussing their fitness needs and goals.”
To ensure a consistent sales process, Lawrence spends a lot of time out in the field training and educating Fitness Connection’s sales staff on best practices.
“We are all speaking the same language, which is important,” he said.
Images by Amber Boykin.