Insight into Promotion Vault CEO Brian Mitchell’s journey in the health and fitness industry, and how he plans to stop clubs from de-valuing their product.
CS: How did you get your start in the health and fitness industry and how did this lead to Promotion Vault?
I had my start in the fitness industry at the ripe age of 14. I had a front row seat to the creation of Powerhouse Gyms in the early 80s by my uncle in New Jersey. As a hungry entrepreneur, I saw an opportunity to design and sell the first Powerhouse apparel to the local friends and fans of this emerging brand.
During college I kept connected to my fitness roots by working for Fitness USA in Mountain View, California, where I quickly rose through the ranks, earning many top performer awards, and eventually was promoted to the youngest general manager in the club chain’s history. I began to realize the opportunities ahead of me within the fitness industry and packed my bags in 1992 to embark on a new adventure in Venice Beach, California, by opening and operating the first Powerhouse Gym in the mecca of fitness.
The entrepreneurial spirit was alive and growing and I soon started my own personal training company called Fit Lifestyles. I grew this brand from a subcontractor in a single club to over 1,200 clubs in less than two years.
The 90s were transforming years for fitness but also for technology. I remember hearing about “The Internet” in 1994 and I knew that this was going to shape the way we all do business in the future. In an industry that is relatively rudimentary, I was convinced that gyms could use branded websites to improve their sales process and overall revenue. In a few short years, my new company, NetGen Connect, built and serviced websites for over 1,000 clubs across the country. It was at this time I joined forces with Pete Moore and Fitness Insite to bring website technology and education to over 2,400 clubs.
After 25 years of helping over 7,000 clubs across North America to constantly elevate and improve the fitness industry, I started to notice a disturbing trend. As competition increased, gym owners began getting into a dangerous pattern of discounting. Some of the most successful fitness brands in the world fell into this trap and for the first time in my career, I was watching a bullet proof industry slowly fall victim…to itself.
Burdened and concerned for the future of the fitness industry, I took a year sabbatical to travel the world and explore what the top industries, outside of fitness, were doing to grow and thrive in competitive landscapes. I quickly realized that there was a successful alternative to discounting, and this birthed a renewed excitement and energy around my creation of Promotion Vault in 2013. I am passionate about educating and proving to this industry, that has literally raised me, the days of discounts can be a thing of the past. I am proud to report that over 2,400 fitness brands (and growing) have adopted the Promotion Vault philosophy and have found freedom from discounting their services/memberships and on average find a 20 percent increase in revenue lines in which an incentive is offered.
CS: What’s the biggest challenge you’ve had to overcome and how did you overcome it?
I was championing the latest trends in cyber technology in an industry where, at the time, Hammer Strength plate loaded equipment was the biggest technological advancement. If a club operator was considered “tech savy,” that meant they had AOL dial up through their phone line and used email (sometimes). I used to go to every fitness trade show and gym owners would literally run from me calling me “Spaceman.”
Technology in the fitness industry has been very slow to gain adoption over the past 25 years. It is hard to believe, but we still have major brand operators that can’t even send a targeted/segmented email blast, let alone be able to analyze their member data to understand how to move the revenue needles in their clubs.
My biggest challenge is also my biggest sense of accomplishment; teaching and educating fitness owners to adopt technology and established business practices to grow their business and make more money.
CS: What are the keys to Promotion Vault’s success?
Promotion Vault was forged from the industry’s need for an alternative to marketing discounts and free services as reasons to get consumers to buy. “Zero” and “free” tells consumers that your product or service has no value. The perceived value is damaged and affects your entire business from acquisition to retention. It is a race to the bottom (not the top).
Other industries win with adding value through incentives, and I have proven that the concept works extremely well in the fitness space. A new narrative was needed, and I am proud to say that Promotion Vault provides one with an easy to explain (and completely automated) solution. It is simple: join, take a tour, refer a friend, check in more, buy more, pay with your checking account, etc. and get an e-gift card of your choice. It simply works.
CS: How does Promotion Vault differ from competitors in the industry?
Promotion Vault is not a sales gimmick or an advertising vendor. We simply use a scientific approach to connect your customer data with your existing marketing channels to drive additional revenue. We work with the biggest POS providers (like ABC Financial, Motionsoft, Jonas, etc.) and connect to the psychology of the consumer to create a holistic approach to understanding your business’ revenue opportunities. We adopt a member lifecycle approach and incentivize the exact points where your members fall off and we add a motivational “gift” to keep the member on their journey and the gym owner making money.
CS: What is your vision for your company’s future?
Promotion Vault is committed to staying the course of constantly seeking new ways to unlock revenue through the use of incentives. As this industry grows and new concepts emerge, we likewise evolve and find revenue driving solutions that work. We also are exploring partnering with industries outside of the fitness space in hospitality, insurance, mobile, e-commerce, real estate and more. We know incentives work and we now have a proven software platform to help others grow their business.
I am not stopping my exploration of new fitness innovation. We are close to launching a new “Rewards Vault” which uses incentives combined with consumer data to allow customers to earn and redeem points for e-gift cards.
For more information visit http://promotionvault.com/.
Stay ahead in the fitness industry with exclusive updates!
Rachel Zabonick-Chonko is the editor-in-chief of Club Solutions Magazine. She can be reached at rachel@peakemedia.com.
