The Lure of Small-Group Training Programs

In the last few years, programming has evolved, and consumers are looking beyond memberships to small-group training experiences for results and solutions. People are willing to pay top dollar for these programs. Let’s briefly examine some successful SGT programs, and then look at what the managers, directors and owners of multipurpose fitness centers can learn from them.

Three Success Stories

Orangetheory Fitness® is a “group fitness concept” that is divided into cardiovascular and strength training intervals. The classes use a variety of equipment, including free weights, rowing machines, treadmills and body leverage training. According to the company’s website, this interactive workout hinges on “the physiological theory of Excess Post-Exercise Oxygen Consumption (EPOC), or after-burn effect.” Each attendee is issued a heart rate monitor so that instructors can keep track of where people are performing within the five training zones. During a 60-minute workout, participants do “multiple intervals designed to produce 12–20 minutes of training at 84% or higher of maximum heart rate.” This method leaves little question about how hard someone is working. The investment ranges from $125 to $175 per month.

CrossFit® is a strength and conditioning program that focuses on varied functional movements performed at high intensity. Participants complete daily workouts—what CrossFit calls WODs—posted by a coach or an affiliate at one of the approximately 6,100 affiliates. CrossFit positions itself as broad, general and inclusive, and its prescription is “constantly varied.” CrossFit enthusiasts see themselves as being in the “sport of fitness.” A drop-in for CrossFit classes typically ranges from $20 to $25, and a commitment to three classes per week costs about $150 per month.

Barre classes and their spinoffs are gaining momentum. Although there are variations, this SGT program generally features isometrics, dance conditioning and physical therapy–inspired movements, sometimes in an interval format. Iterations include The Bar Method™, Pure Barre®, The Dailey Method, Barre Physique™ and Karve Method. There are many others. Most of the programs can be traced to Lotte Berk, a German dancer who fled the Nazis in the late 1930s and moved to London. After injuring her back, Berk combined her ballet bar routines with rehabilitative therapy to form an exercise system. Barre classes generally cost $150–$250 a month.

Fighting for Market Share

In addition to existing yoga, Pilates and other boutique studios, all three of these players and their cousins are chipping away at fitness facility market share. Notably, these programs have a few things in common:

• a group element that fosters motivation
• competition and camaraderie
• a coach or a system that focuses on results, intensity, drive and accountability

Specialty studios offer coaching to virtually 100% of their clientele, whereas typical health clubs offer it to less than 30% if you count group fitness, small-group personal training and one-on-one training. (That’s based on my experience as a consultant.) Most of these SGT boutique studios and franchises do not allow their brands to be incorporated into fitness facilities. So if multipurpose fitness centers need to earn approximately 30% or more of their total revenue from nonmembership dues in order to be profitable, how can they compete?

Club Within a Club

The birth of the SGT phenomenon gives fitness centers an opportunity to create a club within a club. In this scenario, you offer the same types of programs that the small boutique clubs offer, with some tweaks. Perhaps you have a wider array of options. Maybe the programming is more inclusive or is focused on special populations. One major perk is that your fitness facility has existing amenities that can be offered as a bonus.

For example, Eclipse® Fitness Sports and Wellness in Green Brook, New Jersey, realized it was losing members to small-group specialty program studios, so it decided to convert two racquetball courts to “studios” and offer their members a choice of over 25 SGT classes per week. These programs covered everything from heart rate monitoring to battle ropes to suspension exercises to tire flipping—and more. The facility charged $179 per month for full access to these programs, in addition to all the regular benefits of membership, which included steam, sauna and over 60 group fitness classes.

For the club within the club concept to be successful, managers must realize that most participants will come primarily from the existing membership base; new recruits from outside the club are a secondary source. Therefore, a strategic internal and external marketing strategy must be put into place. You will need to ask for testimonials and offer existing and new clients free demos. One advantage of this method is that members will be exposed to the activities while they are working out in other areas of the facility. External marketing strategies include social or group buying (Groupon) and traditional forms of mass marketing, including digital means.

What fitness facility owners, operators and managers can learn from the SGT phenomenon is that the consumer is willing to pay for results. People are shifting their view of fitness from the membership model to results-driven programming. The big question: Will fitness centers offer more programming to quench the consumer’s growing interest, or will the boutique clubs become the future of fitness facilities?

Information in this article is based on feedback and statistics from the clients of New Paradigm Partner, a fitness industry management and consulting firm.