How to Outsmart a Tough Market
With more competition than ever before and an uncertain economy, fitness pros talk about what it takes to survive—and thrive—in an era of change.
In a time of sweeping global change and a shifting economic climate, fitness professionals around the world are gauging the potential impact on their careers and businesses and adapting to stay on track. We asked fitness pros to tell us about the extent of the economy’s effect on them, and what they are doing to meet the challenge.
Times are tough. Or are they? For fitness professionals, the answer is mixed. Caution is the prevailing theme as instructors, trainers and business owners focus on cutting costs and adding value for clients. But many fitness pros are also notably optimistic, viewing economic uncertainty as a catalyst for creativity, innovation and positive change.
Having a healthy attitude about the economy is part of the nature of the fitness profession, says IDEA co-founder Peter Davis. “IDEA members are passionate about inspiring health and wellness. They don’t just carry the message—they are the message. They are role models for positive thinking and healthy living, even when times are challenging. That’s the strength of our industry, and that’s why we’re optimistic about the future—we don’t see obstacles; we see opportunity.”
Historically, the fitness industry has weathered economic ups and downs reasonably well. “Fitness clubs have been fairly resilient during recessions” says Joe Moore, president and chief executive officer (CEO) of the International Health, Racquet & Sportsclub Association (IHRSA). “We’ve been tracking that for 25 years, and we do okay. One of the reasons seems to be that people may put off major purchases, such as big vacations, but they look at fitness services as a great value. We’re not hearing about substantial sales drops, but we are seeing cost reduction in general. Club operators are trying to be frugal, particularly in areas that do not impact the services they offer.”
In January, IHRSA reported that the health club industry saw moderate increases of 3.8% in membership dues and 1.5% in total membership accounts from the third quarter of 2007 to the third quarter of 2008. The U.S. Department of Labor has also reported that the fitness industry continues to grow, with employment expected to increase a healthy 27% through 2016.
Although there have not been significant indicators that the industry as a whole is suffering, most fitness professionals report some experience with challenges related to the economy. “When things were tight in the ’80s, the enrollment numbers didn’t change too much, because people exercise when they’re stressed. Maybe we’re a little like the liquor industry that way—we can hold our own even in harder times,” laughs Chuck Wolf, MS, director of Human Motion Associates in Orlando, Florida. “However, some of my clients are very stressed. Some have lost their jobs. In some cases I’ve said, let’s keep working together because I think things will get better—pay what you can and we’ll just keep a tab.”
Presenter and educator Jay Blahnik, 1996 IDEA Fitness Instructor of the Year, BOSU® senior education consultant and program developer, master trainer for Schwinn® indoor cycling and an advisory board member for the Nautilus Institute™, has found that uncertainty about the economy has made clients more budget-conscious. “In my business, it feels like I’ve been busier than ever. But clients are more sensitive about fees and costs. Instead of just accepting bids, they want to negotiate. I try not to lower my fees, but I do more work for the same amount of money so they can save costs by not having to hire someone else.”
Blahnik says that creative ideas can often overcome fiscal limitations. “I’ll show clients how they can do a project in a smaller, more budget-friendly way, and they appreciate that you are interested in keeping costs low. I take Pilates, and my instructor even came up with a creative solution to cut my costs. She suggested I double up my sessions with another student who also travels frequently. She introduced us and masterminded the whole thing. Now we share the appointment time, and it’s very economical for everyone.”
Mindy Terry, founder and president of Creative Spa Concepts in Kennesaw, Georgia, notes that spa development has slowed down, with some expansion timelines extended and the scope of some projects decreased. But Terry doesn’t view this as a negative trend for the future. “I think economic challenges offer a great opportunity for businesses to improve quality and make their services more affordable. We have always believed in the philosophy of ‘underpromise, overdeliver.’ So we give our clients helpful resources, or assist with work outside of the contract—for which we are not compensated. In the long run, the establishment of client loyalty and trust is well worth a few extra hours of work. We’ve also brought on some new consultants and are using this time for comprehensive training and education. You will never go wrong by investing in your team.”
For Helen Vanderburg, recipient of the 2005 IDEA Fitness Instructor and 1996 IDEA Program Director of the Year awards, and founder of Heavens Fitness in Calgary, Alberta, the economy presents a welcome challenge to be more innovative and fiscally responsible. “Crisis forces us to move out of our comfort zone. It’s an opportunity to grow my company. The economic downturn has not affected my business, and I don’t expect it to in the future, because our focus is on providing high-quality service. Our business plan is based on maintaining a smaller group of highly committed individuals rather than on volume sales. Overall we are looking at how we can run every department in our company more efficiently. For example, our personal training department is offering more small-group training programs with Gravity and TRX to decrease the cost of personal training. In group exercise we have decreased our drop-in class schedule slightly and added more paid, registered programs with short-term, 5- to 6-week commitments.”
Nicki Anderson, 2008 IDEA Personal Trainer of the Year and ower and president of Reality Fitness Inc., in Naperville, Illinois, agrees: “I am cautiously optimistic. There is so much doom and gloom on the news, and much of it is real. But I think that you need to remain as positive as you can and realize that what goes up must come down, and vice versa. After the tragedy on September 11, I lost about 60% of my client base—they all worked nearby at a company that was closed after the attack. So I decided to create a weight management program, and that’s what turned my business around. Surviving a tough market just means finding new ways to be competitive, such as offering better customer service, new classes, unique programming or creative pricing.”
Phillip Mills is co-founder of Les Mills, International, the New Zealand–based fitness club business with 45,000 members in that country and group fitness programs in 12,000 clubs around the world. “I’m hearing similar things from people all over the world. The impact of the economy depends on the circumstances of each business. Some clubs are having a tough time, but it’s often a result of competition as much as the economy. Some companies are getting caught in financing problems, often because they weren’t well prepared. Generally, I’ve found that well-run businesses don’t suffer too much. We have been in business for over 40 years, and we’ve made it through a few economic recessions. In fact, we’ve made some great market-share gains during periods of recession, such as in the late ’80s.”
Mills adds that sound fiscal management is essential for facing economic uncertainty. “Because it’s tough to get financing, we’ve had to run a really efficient business and maximize the return on anything we’ve done, to be sure we could pay for any large expenditures and maintain loan repayment schedules. This has made us focus much harder on innovating.”
He notes that his business has experienced some decline in personal training. “We had 90 full-time personal trainers at our Auckland club a year ago; now we have 80, and we are down about 15% on revenues in that area across all of our New Zealand clubs. However, our group exercise attendance is at record levels. The Auckland club had an all-time-high group exercise attendance level of over 9,000 in 1 week in November, with peak classes of above 200 people. People are gravitating a bit to more affordable activities, but that doesn’t mean we can cut back too much on our personal training services, because it’s an area that is still underdeveloped in many clubs.”
Darren Jacobson is the driving force behind the franchise personal training concept for Virgin Active South Africa. He oversees more than 80 health clubs and over 550 personal trainers. “Feedback from trainers across the board has been that clients are being far more selective in terms of their disposable income. Trainers have noticed a number of clients cutting back on sessions per week or evolving to 30-minute or group sessions as an alternative.”
“The economic downturn has had a limited effect on my business,” says Carrie Ekins, MA, creator of Drums Alive® and CEO of Global Wellness, a fitness and wellness consulting company in Germany. “I have noticed a decrease in orders, and payments from invoices have sometimes been delayed. But I firmly believe that if you have something someone wants, you will continue to have good business, whether you’re in the fashion, food or fitness industry. You just have to develop that ‘something special’ that makes you unique.”
While cost management seems to be the most popular response to fiscal uncertainty, slashing budgets too severely is not the solution. “You don’t want to contract your services,” says Mills. “It’s better to work on improvements and make your facility a more fun place to be, because members will appreciate it now more than ever. And for morale, your staff needs to know that they are the last thing you’ll sacrifice. Cutting back on your basic business offering is suicide. It’s a self-fulfilling prophecy.”
Wolf also cautions against making marketing cuts that are too deep. “When things get tight, we think we should cut back on advertising and promotion, but that’s not necessarily the best thing to do.”
Lisa Druxman, MA, 2007 IDEA Program Director of the Year and owner and founder of Stroller Strides®, says, “We are watching our spending on everything from office supplies to meals at meetings. But we are increasing spending in marketing and advertising to generate more sales. We have also always believed in grass-roots, viral marketing, which luckily doesn’t cost money. We have hired a full-time marketing director, and we’re focusing on online marketing and social media sites.”
Bob Esquerre, MA, an educator and personal trainer who has been named one of the top 10 fitness directors in the United States, encourages increasing value rather than decreasing fees. “Fitness professionals all around me have let the recession control their destiny instead of using it to create diversity in their businesses. Their first response was panic: ‘I’m going to lose my clients because they cannot afford to pay my fees, which are too high!’ Then they cut their prices.”
Esquerrre’s response has been different. “I raised my prices after I reinforced the value proposition for my programs, and then I created other service options that are both different and valuable. For example, instead of offering only 1-hour training programs, I offer both 30-minute and 60-minute, fee-based small-group training programs.”
Maintaining sufficient operating capital is another essential for surviving economic shifts. “You need to learn the lesson that you must have a financial cushion to keep you intact for at least 6 months,” says business development expert Jeff Bensky, PhD, MA. “It’s a very basic guideline that you hear all the time—but it does really help alleviate stress in times like these.”
Bensky adds that his businesses have been through some “major roller-coaster rides” in the last 30 years. “Each time, I was able to move forward instead of worrying about the future. I focused on building new relationships and maintaining or improving current relationships. Sounds simple, and it is. In fact, two of my best years in business—and personally—took place right in the middle of ‘economic downturns.’”
Mills believes that now more than ever it’s important for fitness and wellness businesses to invest, innovate, and keep services new and fresh. “Our industry is very young, and there are still so many ways we can improve what we do, both at micro and macro levels. We can’t let our businesses get run down because of economic challenges. That will just cause attrition and open us up to competition. Instead, we need to see the healthy, beneficial aspects of challenging economic times. For example, people who have been obsessed with materialistic things get back to more important stuff like their health and their social relationships. That’s not a bad thing. If I were to give clients advice about the economy, it would be that every cloud has a silver lining.”
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Fitness professionals share these tips for overcoming economic challenges:
“Narrow your focus. Don’t try to get any and every client through the door. You may get a few extra bodies in the building, but the likelihood that they’ll stay or refer others to your business is relatively low. Instead, market to people who are really in need of your services. For example, as corrective exercise specialists, we are able to highlight our ability to help people reduce chronic pain and minimize stress. This is particularly useful, since those are two issues that tend to flare up when people are worried about money.”
—Justin Price, MA, 2006 IDEA Personal Trainer of the Year, corrective exercise specialist and co-owner of The BioMechanics in San Diego
“Think green—it’s the next big boom. A lot of green opportunities are cost-savers and cheap to do, such as monitoring power usage and changing light bulbs, faucets and showerheads.”
—Phillip Mills, co-founder of Les Mills, International
“Exceed your clients’ expectations. Offer services in the areas of goal setting, nutritional education and healthy eating on a tight budget. Give your clients homework pages that can be personalized, online food- tracking systems and the convenience of online scheduling.”
—Diane Vives, MS, owner of Vives Training Systems in Austin, Texas
“Make a list of your strengths, and brainstorm ways to make money with those strengths. Think about your clients’ needs and how you could help meet them. For example, some trainers and instructors are doing personal services for their clients during downtime, such as shopping for groceries, running errands or walking dogs.”
—Lawrence Biscontini, MA, 2004 IDEA Fitness Instructor of the Year, who works for Golden Door Spas, is the creator of Yo-Chi® and is a master trainer for Resist-A-Ball®, Gliding™ and SmartBells®
“If you charge $80 per session, make sure you give $120 worth of value. Reinvent yourself with some interesting packages: 30-minute mortgage buster sessions, group sessions, destress programs or a ‘Wall Street workout’ (high intensity, fast pace). Create a community of common focus with a ‘We’re all in this together’ feeling.”
—Darren Jacobson, creator of the franchise personal training concept for Virgin Active South Africa, where he manages over 550 personal trainers in more than 80 health clubs
“Cross-collaborate with other businesses. It’s a smart way to pool talent and resources. Look at companies on your street, and think creatively. For example, a personal trainer could team up with an image consultant to offer a complimentary workshop on enhancing your look and self-esteem to land a new job.”
—Diane Y. Chapman, professional motivational speaker and health and wellness writer in Aliso Viejo, California
“You might be surprised to hear me say this, but find out what other facilities are doing in your area. If it’s working for them, mimic their ingenuity with your own creative twist.”
—Phil Block, MS, university educator and corporate wellness consultant in New Mexico
“Develop complementary revenue streams, such as selling products, training other fitness pros, program development or management, consulting or writing. For example, I’ve created a line of fitness card decks and books that I can sell to clients, recommend as gifts and promote independently of my teaching or training.”
—Shirley Archer, JD, MA, 2008 IDEA Fitness Instructor of the Year and certified yoga and Pilates instructor, based in Palm Beach, Florida, and Zurich, Switzerland
“Offer small-group sessions for two or three friends at a reduced rate. In addition, I offer an incentive: if they complete the package by a certain date, they receive an additional session for free. I’ve also used any extra time I have to continue my education by attending workshops or classes, so when the economy does turn around, I’ll have more to offer.”
—Buddy Macuha, master trainer and yoga teacher in San Francisco
“Empower your staff to be proactive and to reach out to the community. For example, we had a teacher who wanted to bring Pilates to a tennis group, so we wrote a letter personally inviting the tennis players to come to a Pilates class. We have also started to link to runners’ groups. Encourage your instructors to think about who could benefit from their services.”
—Zoey Trap, MSc, Peak Pilates® master trainer and educational director for The InnerSpace in Avon, Connecticut
Historically, the fitness industry has weathered economic ups and downs reasonably well.
The news is ominous. Clients are stressed. You’re stressed. So how do you stay positive and help staff, co-workers and clients avoid unproductive fear and pessimism? Fitness and wellness pros offer these suggestions:
“This is an instance where the mass consciousness is being bombarded by the media in a negative way, contributing to a mindset of fear, lack and poverty consciousness. Not that we should ignore what is going on around us—but moment-to- moment awareness of our thoughts and feelings is crucial now. Thoughts are vibration, and depending on their quality, we attract things of a similar vibration into our lives. From the perspective of yoga philosophy and the law of karma, we are creating our future out of our thoughts and feelings in this moment now. By planting positive thoughts of abundance and thankfulness for all that we have, we attract into our lives all of the good, truth and beauty that is everpresent in the universe. Meditation is a practice that is so helpful in maneuvering through difficult times. By going within, we find that place within ourselves that is strong and constant despite the ups and downs of materiality. We are less likely to be thrown off balance by circumstances or attitudes we encounter.”
—Michele Hébert, master yoga and meditation teacher, natural nutritionist, author and pioneer in women’s wellness and spirituality
“We believe that the key to staying positive is to take positive steps to help others, including staff and students. We offer free in-house training for our staff, to keep them growing and motivated. We also started offering free yoga classes. Our students are invited to give what they can, and proceeds go to an orphanage in Nepal—that makes everyone feel good. We offered a ‘Give Thanks’ class at Thanksgiving that was free and well-attended. It created a sense of community and belonging. On Christmas Eve morning, we held a free ‘Come and Count Your Blessings’ class. We try to keep a focus on gratitude and on living in a compassionate, loving way.”
—Zoey Trap, MSc, Peak Pilates® master trainer and educational director for The InnerSpace in Avon, Connecticut
“All day long, fitness professionals help other people defuse their stress. That dumping of negative energy on your shoulders can impact your own outlook. The most important thing you can do is become aware of how dealing with other people’s stress affects your own behavior. Do you become withdrawn, or are you short-tempered with your family and friends? Do you overeat, drink or overexercise? Once you realize how you react to your clients’ stress, you can make better choices. Also, don’t forget to smile and laugh. Research has proven that changing facial expressions can alter your thoughts and your body’s physiological responses. The simple acts of smiling and laughing, even if you fake it at first, reduce stress, lower cortisol levels and stimulate the immune system. So keep a funny phrase, photo or cartoon in your desk or bag, and pull it out whenever you need to destress.”
—Mary Bratcher, MA, certified life coach and co-owner of The BioMechanics in San Diego
© 2009 by IDEA Health & Fitness Inc. All rights reserved. Reproduction without permission is strictly prohibited.
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