Using entrepreneurial programming models to market fitness.
So far I have suggested more than two dozen strategies to resolve trend-based challenges such as the aging of society and the nagging member- attrition problem in clubs; the issues of a time-crunched populace as they relate to the need for variety in facility programming; and the movement toward automating jobs in health clubs. This issue’s column examines the growth in the number of new fitness facilities, the emergence of programming variety and what operators and managers can do to capitalize on these trends.
Societal Trend #4: People want greater variety in physical activities and more “high-touch” personal care.
Fitness Trend #4: Despite slowing membership growth, there is an ever-increasing number of general fitness and niche facilities opening and being built.
I was somewhat stunned recently when I realized that, according to statistics culled from IHRSA executive director John McCarthy’s daily e-newsletter and other current data on club numbers, there are about 40,000 fitness facilities in the United States! Approximately 18,300 of these are commercial, for-profit clubs and the rest are nonprofits such as YMCAs, YWCAs, Jewish community centers, community recreation centers, military installations, college and university facilities, and condo/co-op/gated- community installations.
According to the 2003 IHRSA of the Industry report, about 34 million health club members in the United States are equally spread between commercial clubs and nonprofit facilities. Membership growth has increased nearly 100 percent in a decade, while facility growth has outpaced that growth curve, according to the same report.
Just a few years ago, Bally Total Fitness held the top spot in the fitness industry, with some 350 clubs. Now Gold’s Gym, 24 Hour Fitness, and the remarkable Curves franchising operation have outshone Bally. Curves has sold a record 5,000-plus franchises in 6 years and given rise to an incredible surge in “express clubs” and small, personal, niche-oriented facilities.
All of this may lead you to wonder: What types of facilities will become mainstream and how they will address consumer needs. As evidenced by the growth in program-oriented facilities and the tremendous popularity of Body- PUMP, RPM, Spinning, yoga, Pilates, Nia, tae kwon do, t’ai chi, personal training, small-group training and a host of other fee-paid or membership-upgrade offerings, times are changing in the fitness facility world. Facilities can neither rely solely on membership dues for revenue generation nor cling to the aging benchmark of selling more memberships to cover attrition.
Enter the “niche” facility. For example, Curves franchises use a relatively small space (usually 2,400 square feet or less), require modest start-up capitalization, operate during limited hours and cater mainly to fitness-inactive women older than 35. Another example is World Gym Express, a 5,000 to 6,000 square-foot model designed as a “satellite” facility for existing licensees who want greater market share in their draw area. Small group exercise and personal training studios are abundant and thriving throughout the country. According to data from my unpublished 2002-2003 survey, dozens of large-club operators have opted for second, third and even fourth clubs that operate in smaller spaces and on scaled-back budgets; they have reported better profit margins with the smaller facilities!
While it appears that “big-box” clubs in demographically favorable areas will continue to flourish, and standard gym models such as those of Gold’s Gym, World Gym and the thousands of independently operated facilities across the country are still the prevalent standard, there is an increasing movement away from mass marketing toward entrepreneurial specialty facilities. Indeed, based on my survey, some of the best profit margins in our industry are now apparent in smaller, alcove-market fitness businesses.
As building costs and initial capitalization needs continue to escalate, as consumers become more selective in their activity preferences and as operators try to contain costs and maximize return on investment, I suspect that the penchant toward smaller facilities frequented by fewer members paying higher fees will increase substantially. While big-boxers and chains will continue to exhibit expertise in mass marketing and sales, the crunch will probably be felt most by the undifferentiated midsize club. Large clubs will address consumer needs with variety. Niche facilities will cater to specifics and a certain segment of society’s predisposition to “hands-on” facilities.
What strategies should facility managers and department directors adopt to address these challenges?
- Study demographic, sociographic and psychographic markets around the facility and ascertain the best market segments for promotion.
- Visit competitive facilities nearby and determine what works in their programming. Model the unique attributes of facilities that show strong appeal and exhibit significant member retention.
- Strategize with owners and key staff on methods that will best serve the facility’s customers.
- With the objective of improving customer service and increasing member usage, study the mind- sets of subgroups that make up the facility membership, and change programming or policy to better serve them.
- Cross train staff and members to accept variety in physical exercise patterning.
- Initiate plans to become more high-touch with every member at your facility, not just the most active participants.
- Attend conferences, regional seminars and training programs to get a full-spectrum view of effective programming for multiple market segments.
- Continue to offer variety in group programming, with the aim of getting more participants of every age group and both sexes into classes.
- Offer “starter sets” of personal training offerings for skeptical members.
- Fully understand diversity in training.
- Study and implement feedback-oriented training protocols and systems.
The balance of this decade will likely be the most challenging time in the history of the fitness business. How we orchestrate the next few years will determine whether this industry continues to grow or begins to stagnate. Which will your facility do? You and your staff can enact positive change now by reading the signs, rolling up your sleeves and taking care of business.