On March 27, 2020, Club Solutions Magazine hosted the first installment of a virtual roundtable series surrounding the COVID-19 crisis, with the aim of helping club operators navigate through the unprecedented situation that’s led to the forced closure of countless health clubs across the U.S.
Panelists included Scott Gillespie, the owner of Saco Sport & Fitness; Bill McBride, the president and CEO of Active Wellness; Blair McHaney, the CEO of MXM and the owner of WORX health clubs; and Brent Darden, the founder of Brent Darden Consulting.
Following is a summary of top takeaways from the roundtable, including best practices surrounding financial and operations strategies, plus silver linings and a look ahead.
Importance of Being Flexible
- Information and data are changing by the minute. Be flexible in terms of evaluating your current situation and what you’re conveying to members. “During this process I think the bias to action is incredibly important,” said Gillespie. “The need to convey information in real time is incredibly important. We’ll likely make some mistakes in this process, but action will always win over inaction. Be ardent about looking for the facts. Get the hard information, accept it and share it.”
- Be transparent. Don’t let members or staff fill in the blanks. “No one knows how to deal with this because no one has experience with this,” said McBride. “What’s really important is transparency. This is what I know, this is what I don’t know. We’re being transparent with our team, with our members, and understanding that if you don’t provide information, people will make it up.”
Financial Best Practices
- Keep an eye on your state laws. Although you may want to continue to bill your members during forced shutdowns, some states are mandating that clubs can’t continue to bill. This includes even reduced billing for virtual services.
- Relook at your pricing models and services and do strategic planning — are there things you should/could change?
- A huge line item is rent – approach your landlord and ask for a deferment. Many landlords are being flexible during this time.
- Add an expense line called COVID-19, so when you look back three months from now and are writing to banks, your insurance company or the SBA, you have all that information in one line item.
- Some insurance companies are saying this crisis isn’t covered under a normal business loss claim. File anyways. There’s a good chance this could be added in the future as qualifying.
Operational Best Practices
- Even if your club is closed, in most parts of the country you can still have maintenance or construction done. Some clubs are remodeling, refinishing floors, etc.
- Use this opportunity to connect with your “all-star” members who’ve been with you since the beginning or are your most loyal. Consider offering them an exclusive bonus service as a thank you.
- Pre-sell personal training or other services people can use at a later date when the clubs reopen.
- Loaning out equipment:
- McHaney loaned out some equipment for free to members in good standing, as long as they agreed to post about the equipment at least once a week to their following and had an up-to-date membership with a valid card on file. They also had to agree to return the equipment within a week of opening.
- Check with your insurance company before loaning or lending equipment, to make sure you’re not opening yourself up to liability.
- Biggest operational challenge will be regaining consumer confidence in safety and cleaning practices once clubs can reopen. Be prepared to update/improve cleaning practices significantly going forward.
- Think about what you can stop doing — are there programs that were waning, classes that weren’t well attended? What are things we might want to reposition or eliminate as we move forward?
Virtual Offerings
- The innovation surrounding virtual programming at many gyms has been happening at light-speed. “Active Wellness has been talking about virtual programming for a long time, and with this circumstance, it’s amazing how fast you can get things done when there’s clarity and vision,” said McBride. “I’m impressed with how quickly we’ve pivoted to a digital delivery system that a lot of us have spent a lot of time toying with and thinking about.”
- Your virtual offering doesn’t have to be perfect. “People don’t care about the production value of their favorite instructor filming on an iPhone,” said McBride. “The authenticity and sincerity are much more important in content than the production value.”
- Consider how these new innovations in virtual programming will affect things moving forward. “My question is, how is the consumer’s mindset going to change over the next six weeks as we continue to teach them to consume our product in a different way, and what is that expectation going to do in terms of complementing or replacing?” asked Gillespie.
- Be careful. Are you training your members to consume someone else’s different content, and are they going to become unmoored from you?
Communication Best Practices
- It’s incredibly important to maintain communication with staff during this time, even those who have been laid off. “Without staff, we will not be the same entities when we reopen,” said Gillespie.
- Take care of your staff as best you can. “If a competitor in your market is doing a better job of taking care of employees during this crisis than you are, there’s a good chance you could lose some of your employees when you attempt to reopen,” said Gillespie. “You are being measured as a leader and this is a time to shine.”
- Every day you don’t communicate well, your employees and members are becoming more unmoored from you. It takes communication every day.
Silver Linings + A Look Ahead
- This will be a reset for the industry. “I think the landscape will probably be better for the stronger clubs coming out of this to be able to serve the population that is looking to get back into a club,” said Gillespie.
- Focus on controlling the things you can control.
- Remember you’re playing a long game, not a short game.
- Use this time to innovate. “Once you work through the difficult crisis management part, and you have a handle on things, I would strongly urge you to dedicate time to what your next business model looks like,” said Gillespie. “Consider all the changes happening in the world and how consumers are going to respond to that.”
- Sometimes the best innovation is losing something that’s not necessary.
- We have an opportunity to blow up our business model and build a new one that’s built for tomorrow.
- Take care of yourself. You’re making tough decisions about your people. You need exercise and stress relief.
To access the on-demand version of this webinar, click here.
Club Solutions Magazine will be hosting a second virtual roundtable on navigating the COVID-19 crisis this Friday, April 3 at 11:00 a.m. EST. Register here.
