There was a time when a personal trainer could simply sell personal training sessions... and that was it! A time when clubs could simply sell memberships…. get the EFT rolling… and call it a day!
The entire business model was essentially based on a single revenue stream. It’s known in marketing circles as a “One Trick Pony!”
This model still exists within the fitness business, but, it’s a dying breed. It just doesn’t cut it any more. Their days are numbered. So, say “good-bye” to the One-Trick Pony.
The NEW Fitness Business
In so many ways I love the new direction the fitness business is headed.
It’s hard to explain, but our industry is getting a lot smarter and much more sophisticated.
I have several theories as to why, but I can’t prove any of them. So, let’s just say there are a whole lot of “smart people” getting involved in “fitness.”
This new sophistication is showing up everywhere… vendors, suppliers, manufacturers. And, of course, where I notice it most: owners and operators of clubs, studios, spas and wellness facilities.
Over the past 5 years there is a noticeable difference in my customer base — in two categories.
- Survivors: The owners who survived the economy did it with brain power. They didn’t drop prices. Instead, they got creative. So, in a “survival-of-the-fittest” kind of way, the horrible economy weeded out the weak “non-creative” players.
- Newbies: There are a ton of new executive professionals who left the corporate world to start their own new ventures in the fitness business. And, they bring with them many years of corporate management experience. In other words, they have skill sets. And lots of them!
There’s evidence of it all around.
Outsmart and Out-Deliver the “Low-Baller”
Here’s just one example of what I’m talking about.
We work with a husband and wife team who own and operate a 40,000 sq. ft. multi-purpose club in a community outside Atlanta. They were successful for a number of years with sustained growth until the recession hit in 2008.
To make matters even worse, a big-box, no-frills, $10/mth., no-contract club opened in their market area and competed head-to-head with them (not to mention attempts to lure staff, etc.).
They knew they could not compete on price… so they decided to simply outsmart and out-deliver their new competitor. How? By changing the playing field and increasing their “value proposition.”
- They took turns on the morning shift to greet all members, by name, at the front desk
- Promoted Personal Training sessions and promoted the qualifications/certifications of training staff (big box did not offer training)
- Increased pro shop offerings with larger footprint and more products with emphasis on private label products with higher margins
- Increased smoothie bar offerings with discounts and incentives for those tracking workouts or participating in group exercise programs
- Appointed the most tech-savvy trainer as “social media director” and created campaigns across Facebook, Twitter, Google, Tumbler, etc.
- Created and developed a YouTube Channel with health advice, training tips, facility tour, etc.
- Created loyalty programs resulting in discounts for products, training sessions, etc.
- Developed generous “member referral programs” with cash and prize incentives
- Created their own proprietary group exercise and dance programs (instead of paying for Zumba or Les Mills)
- Introduced ONBOARD 101 for all members as part of their membership
- Organized group field trips to grocery stores, running shoe stores, etc
- Organized group hikes into the local trails along with hiking tips, etc.
- Started Weight-Management and Lifestyle classes on Wednesday nights
- Created a speakers bureau with local experts ranging from financial planning to lawn care!
- Participated in several business organization functions (chamber of commerce mixers, Rotary, Elks, Lions, Toastmasters)
- Volunteered to speak about Nutrition, Weight-Management, Lifestyle, at any venue that would have them.
… and the list goes on. Of course they did not accomplish all of this at once, but after three years, the big box, no frills club closed its doors.
If nothing else, that kind of competition made this duo much better operators. They not only fended off the competitor but actually drove their business to a whole new level — including financial growth.
The Niche Player
I recently started doing business with a retired CEO (commercial real estate development company) who, 3 years ago, decided to purchase a small club “turn-key” franchise unit just to stay busy.
But, after realizing the franchise marketing plan was an uncreative “boiler-plate,” he decided to hire two different consultants. He told me that he ended up calling them “cookie-cutter consultants” as they, too, were just parroting old ideas.
So, he decided to attend three different fitness trade shows and spent hours number-crunching his own situation. Finally, he decided to rely on his own instincts, experience and skill sets.
So, he ditched the franchise and set out on his own.
His first instinct was to NOT attempt to be all things to all people. Instead, he identified a specific target — office workers. He reasoned that this target market would appreciate location convenience, up-scale amenities and time savings of being able to workout before breakfast, at lunch time and after work.
Relying on his skills in commercial real estate, he negotiated great deals for ground floor space – and today, operates three 5,000 sq. ft. “lifestyle facilities” all of which are located within various office parks in Southern California.
Instead of relying on individual memberships, he offers specifically detailed and tailored packages for the companies that occupy the office parks. And, in one case, he offered a membership package to the office park management company, itself, as a way for them to draw potential occupants. That’s just plain smart. Really smart!
I won’t line list the details but will simply point out that his facilities are super “high-end” in terms of locker rooms (like a spa), cleanliness, decor, available technology, etc. He even has two small private rooms in case you need to take a private phone call. (clever).
He also created multiple profit streams with high-end products like embroidered apparel, skin care products, supplements and at one point was considering some high-end Coach leather cases for tech devices.
And, since most companies are paying for the memberships, they, too, are on the high end. But, companies simply write it off as an expense – so there is almost no push-back whatsoever.
Embrace It… and Make it Yours
I have no idea where all of this leads. But, here is what I DO KNOW.
I can pick-up an old copy of almost any fitness trade publication from 20 years ago and read almost the exact same articles that are being published today.
Sure, the equipment has a few more bells and whistles and the operations technology has improved but it’s still based on the same old model of selling memberships.
In fact, I could argue that some clubs are actually cannibalizing their personal training departments by recommending various fitness apps. (The same apps that send pop-up messages like: “You don’t need to hire a trainer or join a club.”)
Today, there are new people coming into this business with different ideas. There are “survivors” who have been forced to re-think their entire business model and how they operate and integrate within their specific communities and market areas.
The newer models will be much more focused on the Value Proposition being offered. That a club or studio’s “CONTENT” and “PROGRAMMING” and “INTERACTION” with its community will be more important than ever. It is no longer just about equipment and floor space.
I already see the more “holistic” lifestyle approach being deployed by some of our fitness partners with resounding success.
Educational content including cooking, nutrition, weight-management, health management and even navigating health unsurance are all becoming part of the new mix.
The new fitness business models are evolving and morphing even as I write this. The fitness industry is truly changing — and for the better. So, I say, embrace it!
Yes, there will always be room for a few “old school” players, but not like the old days. For the most part, the “One-Trick Pony” is long gone…!
Here’s the Most Powerful Welcome Letter Ever Written… for YOUR NEW CLIENTS!