Stop settling for incremental changes in your business model, and use concepts from the experience economy to create lasting, authentic transformation.
What kind of promises have you made lately?
I have three kids. When I want to make sure they know I will follow through on a request, I say, “Promise, promise.” The fitness and wellness industry has never been stronger, but it needs a few more professionals not only to stand up and say, “I promise, promise,” but also to deliver, deliver, on their pledges. What should we be promising and delivering? At the heart of the answer is a conversation about responding to the era of the individual, which is Baby Boomer driven. What will your response be to the demands for individualization, and how will you prepare your business?
This article considers mass customization, as defined by the “experience economy,” as one approach on this journey. Mass customization—or treating different customers differently—is necessary to make every experience personal. This approach requires you to modularize your services in such a way that you can, based on the preferences of a particular customer, put together a very specific program just for that individual. If you are going to promise personalization, it has to go further than just saying, “Happy birthday.” It means you will need to understand and remember the many preferences of each customer and then be able to materially personalize a program over time, à la Amazon.com. This will necessarily require you to develop a portfolio of experiences. Think about how you already establish a profile of a client’s workout routine. Now think about expanding that profile to include critical information about the client’s desires, dreams and preferences as they relate to his goals. This can be a critical step in building a relationship, and relationships (formal and informal) are at the core of our industry’s success. The era of the individual is going to continue, so if personalization is a brand promise that will differentiate your business, you will need to understand how you can deliver operationally on that promise.
As a first step toward learning more about how this industry can follow through on promises to our customers, it’s useful to look at history. Fitness professionals have been attempting to expand the customer base for health, wellness and fitness services for a long time, with little to show for it. Over the past 15 years, we’ve been aided by changes in perspective as corporations have begun making efforts to better manage their healthcare costs and insurance companies have started to realize that prevention really does help the bottom line. Additionally, research has supported a variety of proactive interventions that help people age gracefully, live longer and more happily, look and feel good, and have more energy. Coupled with these changes is the “bowling ball going through the garden hose of life” phenomenon, otherwise known as the Baby Boomers (78 million born between 1946 and 1964, with considerable buying power). This population has already transformed health care, and it is now directly influencing the growth of wellness and prevention services.
Based on my 30 years of experience working with businesses to optimize their outcomes, I can say that our market has expanded as more people have actively contemplated our services—but there has not been as much growth as we had expected. In fact, we might be recycling clients and customers we have already had for a long time. How can we stop recycling our clients and customers, develop and access a larger customer base, attain a sustainable competitive advantage and solidify our revenue and profit? A good start is to make promises we keep!
With all the improvements in programming, equipment and technology, the fitness and wellness industry is moving to new heights. We will be leading the quest for meaningful and compelling (also known as “new-to-the-world”) approaches to improving and maintaining health and wholeness. While we don’t have a crystal ball, we can speculate that, as fitness and wellness professionals, we will respond to the needs of various customer groups and do three things:
1. Create a sustainable, competitive advantage that will differentiate our own businesses from those of others.
2. Integrate services in one form or another so that customers will have more efficient ways of accessing unique approaches.
3. Make a strong commitment to maintain a balanced lifestyle ourselves.
What ties all of this together—programming, equipment, technology, a unique business model, integrated services and a balanced lifestyle—are the experiences your customers and employees have. Designing the promises behind these experiences will be at the heart of long-term success—both for individual businesses and for the industry as a whole.
We will get there through point of view (P.O.V.). The key for you, as a fitness or wellness professional, lies in changing your P.O.V. about the industry’s future. You must see new solutions that can be applied today. We have all had experiences in life where we changed our P.O.V., thus allowing for a significant change in the way we did something. Changing P.O.V. and perspective is critical in order to deliver “new-to-the-world” experiences. Looking at your customers, your staff and yourself from a new P.O.V. will enable you to achieve the lofty goals mentioned above. It begins with looking at your own perceptions about business.
There is a new economic platform from which many businesses are now operating—the experience economy. Commercials and advertisements often wax poetically about the “dining experience,” the “car-buying experience” or the “travel experience.” The common denominator is the “experience economy,” a concept coined and elaborated on by B. Joseph Pine and James H. Gilmore in their book The Experience Economy: Work Is Theatre & Every Business a Stage (Harvard Business School Press 1999). Simply put, the entire platform of economic value within which we have been operating is changing, and so are the promises we make to our customers.
To gain a better perspective, let’s first define what an experience is and then look at how our economy has changed over the past 100 years. Here is Pine and Gilmore’s definition: “Experiences are inherently personal, existing only in the mind of an individual who has been engaged on an emotional, physical, intellectual or spiritual level.” How did we get to the experience economy? Over the past century, our economic platform has evolved. It used to be about commodities extracted from the earth. Later, manufacturing goods from these commodities became the predominant economic indicator. As these goods all started to look and be the same, the focus switched to services that differentiated the goods. Now, as services have become commonplace and expected, many businesses have evolved to staging experiences as a new way to stand out in the crowd. Customers’ expectations have changed as well. Consumers expect products and services to be of the highest quality. So what differentiates service providers? How the experiences are staged.
Let’s focus on coffee as an example. Way back when, someone picked the coffee beans, you bought a sack and you ground the coffee yourself. The cup cost less than 1 cent. Along came businesses that took the coffee beans, ground them, put them in cans and sold them; they manufactured the coffee. A cup of coffee cost less than 25 cents. Then someone else came along and said, “Let’s get the coffee in the can, percolate it and serve it for less than a dollar.” In other words, provide a service to differentiate coffee. Fast-forward to the present day, when Starbucks has mastered the art of staging coffee experiences. With its own language and highly personalized approach, Starbucks delivers exactly what people want—and they pay up to $4.00 per cup! We went from manufacturing the beans to providing a service to staging an experience. And each time the customer has been willing to pay a premium.
There are hundreds of examples of companies that stage experiences to differentiate themselves. Why do so many families bypass other amusement parks to spend their vacations and dollars at Walt Disney World®? What explains the popularity of Build-A-Bear Workshop®, where the experiences are staged around making your own bear, naming it and having a unique, creative experience? There are multiple examples in hotels, libraries, fish markets and computer repair. If computer repair can be staged as an experience, why can’t the fitness and wellness industry also be creative in this way?
Using the Starbucks experience as an example, note that whatever you promise the customer must come with a matching experience. The coffee may cost $4.00 a cup, but it’s the exact coffee the customer wants. She knows and finds comfort in the fact that her double-mocha-espresso-nonfat-whip is going to taste the same in Sarasota as it does in Seattle. Starbucks has delivered on the promise and given her a pleasurable experience that can be replicated in every single franchise in the world.
A brand is a mixture of attributes, tangible and intangible, and comes with the promise that a specific level of value, quality and service will be offered. If managed properly, the brand creates value and influence. Value is the promise and delivery of an experience. The brand promise relates to your business intentions and is presented as a contract between you and your customers.
A brand experience relates to the operational side of the business. Do you deliver on your promises? The authenticity of your business rests on whether your customers’ experiences match the promises you make. Brand experience goes beyond how you treat people; it includes the facility, programs and what happens before and after a customer’s visit.
Let’s use “Mike’s Personal Training Studio” as an example.
Here are five attributes Mike wants to share with his clients as brand promises (remember, promises should demonstrate value and be simple):
1. Offer a clean, professional, welcoming environment.
2. Provide a thorough fitness assessment.
3. Use updated, well-maintained equipment.
4. Offer a variety of package options.
5. Employ well-educated, certified staff.
Here are three brand experiences that authentically match these promises and three that need to be improved:
Match (aligned with promises)
1. Client is greeted at the door and offered a towel and a bottle of water.
2. Client chooses from training packages that range from a single session to 100 sessions.
3. During the assessment, Mike discovers client needs a physical therapy referral, which he has on file.
Need Improvement (misaligned with promises)
1. One of Mike’s personal trainers is not certified.
2. The cable on one of the machines is broken and out of order.
3. Client leaves without a follow-up appointment and no one acknowledges her.
What is your brand promise? How accurate and authentic is that promise compared with the brand experience? (See the sidebar “Promises, Promises,” page 83, to create your own worksheet.)
The fitness and wellness industry is a natural venue for promising and staging memorable personal experiences and for engaging people on multiple sensory levels. So why is it so challenging to achieve this outcome consistently? For many business owners (not just in our industry), making small, incremental changes seems to be the comfortable approach. While incremental change is admirable, it will not necessarily be unique and distinctive, nor will it help a business gain a sustainable competitive position. Anyone can take the next step in an incrementally changing world, but are you ready to undergo transformational change, so that “new-to-the-world” truly describes your business?
Let’s revisit Mike’s Personal Training Studio to see how Mike can use these ideas to improve his business. Over the past 7 years, Mike has made the following incremental changes:
- He moved his home office to a small studio in a commercial area.
- He hired qualified staff as the need arose.
- He leased the latest and greatest equipment.
- He kept his certifications current.
- He added a massage therapist and a physical therapist to his professional network.
Most (if not all) experiences in our industry are inherently personal, which means we have the perfect opportunity to stage a unique experience for each customer. Personal fitness training is a naturally personalized experience and has the potential to engage customers on emotional, physical, intellectual and sometimes spiritual levels. Yoga, Pilates and group exercise programs are also ideal for personalization. And have you experienced or observed the push for personalization within indoor cycling classes? Instructors are introducing cadence monitors and highly customized tracking features for participants. The latest generation of fitness equipment allows for premium personalization. You can dial in any channel or music, and some equipment models even allow you to save your preferences. Nike is now offering customized shoes. In fact, the Nike website (www.nikeid.com) invites running-shoe zealots to “build [their] own shoe.” They can choose their favorite colors and even add a short, personalized identifier on the back heels.
Make sure your staff is also onboard with the concept of staging an experience. Start by working clear language about your vision for providing great customer experiences into the backbone of your mission statement and by promising to follow through with your intentions. Pine and Gilmore explain why company buy-in is important: “Work is theatre . . . even those businesses which do not yet stage experiences must understand that whenever employees work in front of customers an act of theatre occurs. The question isn’t whether your employees are performing; it is whether they are performing in mundane or memorable ways.”
Everyone, from the front desk to the training room and the locker room, must be dedicated to the value of authentic promise making. If you do not engage your customers in memorable ways, you are vulnerable to losing them to other fitness facilities that do interact with them in memorable ways. What happens if 70% of a fitness facility’s staff performs in a memorable manner and the other 30% doesn’t? Imagine that a member walks in and is greeted warmly and by name at the front desk. A personal trainer on staff offers timely and welcome advice on dynamic warm-ups. However, as the member is leaving, he stops to ask a question about an upcoming workshop at the sales office and the coordinator does not acknowledge him. The member walks away without the information he needs, and that final impression stays with him. How likely is it that the member will continue to pay for an “almost” experience?
The object of most businesses is to grow to meet their established objectives (whether they are financial, strategic or operational). Playing strictly by the rules, however, does not always lead to growth. Many business leaders see industry newcomers gaining a competitive edge and believe they are succeeding not because they are better at what they do, but because they change the rules of the game; they make up new rules for winning. Think about how you would change the rules of the game. How would your new rules lead to true transformation? Most important, understand how you will fulfill the promises you make to your customers and employees.
Given where the industry is at the current time, and where we want to go, it is important to consider more than just incremental change. As we put the principles of the experience economy into practice (which includes staging experiences and being able to charge a premium for them), it is critical to create brand promises that touch customers and that differentiate you from the competition. Finally, it is vital to create matching brand experiences that leave your clientele with a sense of authenticity.