Looking for tips on how to expand and grow your club? Which key indicators to watch? How to operate effectively? Four top club operators get together to offer their “pearls of wisdom.” This summary provides an insider’s look at contemporary views from industry leaders.
The following is a summarization of an education session from the 2016 IHRSA Convention, produced with full permission from IHRSA. The full-length video is available for purchase at ihrsastore.com.
About the Speakers
Robert Brewster, CEO & President, The Alaska Club; David Dos Santos, Co-Owner, Best Fitness; Dave Patchell-Evans, Founder & CEO, Goodlife Fitness; Mike Alpert, CEO & President, The Claremont Club.
How to Expand from One to Ten Clubs?
Besides the most obvious factors – money, and where you get it – philosophically, it’s important not to get into the fitness business and run it only as a business. If fitness and a healthy lifestyle is your mission, your passion, what you believe in, and how you live, then you’ll likely be successful. Growing from one to 1.2 million members takes a concerted effort to focus attention on the individual. Looking after members, their needs, their interests, and doing what it takes to make many, many different members happy is an essential element for growth. This shouldn’t mean a disregard for business operations (more likely you’ll need to operate smarter than most), but the realization of the customer-centric nature of our industry and of a successful, scalable club.
Work Against Metrics
Systems and processes are tools used to operate efficiently, which improves the ability to grow the number of facilities you’re able to manage. In addition to established systems and set procedures, it’s critical to gather metrics which you work against and measure. Compare daily sales by club, matching it against goals for the month. Are you behind or far ahead of your goals at any given moment? Measure personal training consultations and small group training class sizes. What are people saying in reviews about your club? Having tools for measurement in place and using analytics will provide the agility needed to adjust on a daily, weekly, or monthly basis for constant improvement and growth.
Are Boutique Studios Scalable?
The market is witnessing an evolution with boutique or specialized studios – yoga, indoor cycling, barre, etc. With one trainer or an individual’s personality driving the business, it’s often difficult to translate that into multiple locations. The studio concept has reached a point where some within the industry are pushing a branded “system” in order to grow beyond a single studio. Successfully scaling up a studio model requires more – a brand or concept– behind the boutique studio.
The Best Club Model
There is not any right answer to “what makes the best club model?” Understand your market. It’s more difficult today to see a new mega club open due to high building and land costs. But, there are different models and they each have a place in the market.
Look at who makes up the market. Demographic groups display a broad spectrum in perceived value of health and fitness within a given community. Often this is linked to per capita income. So, a market can support different club models depending on the demographics and per capita income. If per capita income is from $68,000 and above, people in that market are more likely to give greater importance to their health and fitness. Likewise, they’ll spend more on monthly memberships or belong to both a club and studio. If the market tends to have a lower per capita income, the perceived value of health and fitness is probably lower and more apt to better support a low cost club model.
Fitness clubs, regardless of whether it is a top-tier, budget, or studio model, have a place everywhere. The best model will depend on multiple factors of the market you want to enter.
It’s All About Connections
The socialization, camaraderie, and friendly competition among club members is as important as the hard work and sweat that happens during classes. People want to connect with others and to feel welcomed, or that they belong. This comes through first in staff–member engagement. Staff act as guides along the path of a member’s fitness journey. Whether it is your front desk or personal training staff, their role is to understand members’ goals and their needs, and then set about to address them.
Often a member’s first encounter with a club is through a digital experience. What is the first impression a prospective or existing member has when they open your website? How can you influence an individual through your digital platform to then physically walk through the doors? Essentially, people need to experience the club – and need the inspiration to check it out. Memberships are rarely sold by browsing the internet. So, it is important to create the touchpoints on a website or in social media that give people a sense that your club is for them, inspires results, and motivates someone to click to get a pass and come in to take an introductory class.
High Cost vs. Low Cost
Does It Pay to Be Both?
As with any new product or service, and within any industry, first there are the early adopters. A small group of people who, no matter the cost want to try something new, have the latest, or simply raise their social status. The more people learn about the product or service, the more sales increase, and the market for the service grows. As a market matures, prices come down, and budget operators move in and gain market share. Next come the specialty boutiques. Sound a little familiar?
There is enough room in the market that both top-tier and budget clubs will flourish within a geographic locale. Keep in mind however, if you’re impacted by low cost clubs, then it’s likely you’re getting exposed as not having a well-differentiated service.
Having the Resources to Meet Member Needs
A club’s price point, however, can change the equation. On face value, most clubs appear the same. A $200 per month club’s fitness area compared to a $10 per month club isn’t necessarily 100% different. What does stand out in most mid- and top-tier clubs is the amount of time given to support members’ needs. The higher a club’s price point, the greater the resources to allocate to a member: to understand their inner motivation, to effect a positive outcome, and to provide a more personalized service.
No One Club Fits All
Club operators are in the business of providing fitness. They offer people the ability to get fit. Members want choice and accessibility. Operators should look to establish club models that provide people with fitness they can afford, whether it is $120/month, $60/month or $10/month. There are many more creative pricing strategies today for all types of people looking to get fit or fitter: monthly memberships with fee-based programs, budget clubs that start at a base price with incremental costs for à la carte services, monthly class passes, etc.
It’s likely the proliferation we see in budget gyms will evolve and we’ll witness a consolidation, potentially resulting in only two, or possibly three brands. When this happens profit-margins will improve, becoming higher than they are now.
Which Key Metrics Should You Watch?
Higher Club Activity = New First-Time Visits
What types of metrics are critical to managing a club’s success and growth? The panel of top operators cited sales results, retention, and the level of activity in a club. The last, club activity, is one of the strongest indicators for new visits. What are a club’s actual guest check-ins on a given day? A high level of activity produces new visits and the potential to increase memberships. Active members will want to share the experience, bringing new guests and ultimately club growth.
This circles back to quality of service. Club usage and quality of service are reciprocal. You’re likely not to have one without the other. If you’re not providing a good enough service, people are less encouraged to show up and work out. Track the numbers.
Staff Engagement Translates to Higher Club Activity
Staff engaged with members on goal setting gives purpose to a member’s experience. This fosters an interactive process for coaching and a continuous course of improvement. And, as members progress in their training goals, guided and encouraged by staff, it increases active engagement and the level of club activity.
What to Look For In a Personal Trainer
Qualifications that Stand Out in the Ideal Personal Trainer
- Undergraduate or post-graduate degree in exercise science
- ACSM- or NSCA-certified
- Ability to engage and educate members
- Good communication skills
Beyond the checklist, it’s about passion. It’s about possessing the ability to connect with people. Personal trainers need to have compassion and the ability to listen, to find out a member’s needs. A prospective personal trainer must understand their position is to persuade people to make a commitment, to decide they’re ready for change, and to take the next step.
Behavior Change-Based Programs
Helping Deconditioned or Non-Exercisers Stick with It
This is one of the most difficult questions for the industry to answer. Operators look to understand members’ physical needs for exercise, e.g. weight loss, strength, mobility, etc. Rarely, do operators consider addressing the psychology of motivating a member to stick with a program. Adopting an approach to get members to view personal training as more of a compulsory or mandatory part of the experience, or at least exposing them to the opportunity, will boost the positive effect on a member’s motivation. Results show members who experience personal training tend to stay in an exercise program longer.
A robust personal training program provides clubs the resources to have the infrastructure that enables them to help members succeed, and provides the incentives to keep them working towards their fitness goals. To achieve significant improvement in attrition, one-on-one interaction between members and staff is essential.
The Potential of Fitness Technology
Changing behavior or conditioning poses a difficult challenge for clubs. The impact clubs have on the percentage of change among its member population is surprisingly low. With the use of personal and group training, most operators will reach less than 10% of members.
Operators can begin to look to technology and the “Internet of Things” for possible answers – pieces of equipment and devices that are all connected, like virtual coaching, prescription workouts, or fitness programs based upon metabolic changes or meal intake – all enabled by smart technology. This could offer incredible potential to help people make necessary behavioral changes to keep them active and coming to the club.
Keep Your Members Coming Back
- Develop automated communications systems and solutions that create engagement.
- Drive for financial success, because it provides the resources to focus on your members and to help them become successful.
- Consistency over time equals results. Just as we ask members to regularly train to achieve results, maintain a consistent determination and always remember to follow through.
- The high-price club model is to differentiate and provide top-notch service.
- The low-cost club model is to manage your systems daily and run the operations as best you can.
- Know your members. Make it a policy for everyone on your team to engage with members.
- Create meaningful purpose. Motivate and inspire your staff every day. It’s contagious and your members will get it!
- Be an example to your staff and to your members. You’ll find it is not particularly about the perfect body. It’s having an attitude that demonstrates you care. Show up every day to make a difference in people’s lives.