Pilates as Profit Center

Pilates tops industry growth charts, and program directors worldwide have experienced firsthand the success of Pilates mat programs. However, fee-based Pilates equipment programs remain largely untapped as profit centers in many health and fitness clubs. One exception is the Cypress Creek Family YMCA in Houston. “Within the first 2 1⁄2 months, all our initial costs for the reformers, instructor training and promotions were completely paid for,” says fitness director Karen Behrend, MEd. In the same time period, Behrend’s Pilates equipment package brought in more than $20,000.

Why is this program successful? Rexanne Paugh, director of operations at Cypress Creek, acknowledges four keys. “We identified program interest. Once we found the need was there, we spent time researching other programs. We identified potential challenges prior to the start and came up with resolutions. Lastly, knowledgeable instructors led free demonstration classes for those who didn’t know about Pilates or just wanted to try the class.” Behrend emphasizes the importance of planning and attention to detail. “It took me about a year to implement the equipment program. I didn’t want to rush it.”

“An equipment-based Pilates program is ideally suited to operate as an independent business within a club,” says Marci Clark, cofounder and chief financial officer of PowerHouse Pilates^tm in Monongahela, Pennsylvania. Pilates equipment programs generate revenue through fees charged for group, semiprivate and private instruction. They draw new members, enhance member retention, support facilities’ personal training programs and give clubs a competitive advantage and an enhanced image. Depending on resources, facility managers may also use studio space and equipment to provide continuing education to Pilates instructors in their areas.

If the potential inherent in launching your own Pilates reformer program piques your interest, use the following tips from industry experts to move forward.

First and foremost, survey members to determine initial interest and willingness to
pay for a Pilates equipment program. Nestor Fernandez II, regional manager of Western Athletic Clubs in San Francisco, says that many new members are positively influenced to join a club based solely on the presence of a Pilates program, which helps differentiate the club from competitors.

Ken Endelman, president and chief executive officer (CEO) of Balanced Body^® Inc. in Sacramento, California, recommends consulting with front-desk and member services staff to gauge how much outside interest exists for private, semiprivate and group training in relation to prospective fees. This is also the time to figure out how many training sessions the facility can support. Since space is one of the biggest challenges, determine early on whether or not to establish a dedicated area for individual sessions, group trainings and equipment storage. If dedicated space is not an option, the equipment needs to be portable and easy to store. Decide when to slot programs into the schedule and how to store equipment when not in use. “If classes are only available at 9:30 at night, the program’s going to be difficult to build. It needs a prime-time slot,” says Endelman.

He also suggests evaluating existing resources. “If a facility already has a Pilates champion on the staff [whom] it can work with and put in charge of the program—someone who really wants to make it work—it helps get the program going.”

Although Endelman notes that a program can succeed with less space, he recommends allowing at least 80 square feet per reformer. “The reformer’s footprint
is about 30 square feet, but you need
to allow for access space and traffic flow. Also, it’s not only about reformer space; you also need room for a reception or waiting area, storage for personal
gear, water and equipment accessories. Choice of space can also support marketing. If people can see the program, it markets itself.”

Once you have resolved the space issue, attend to program and equipment
questions. “If you plan to start off with group mat classes, consider purchasing small props to add variety and challenge your clients,” says Moira Merrithew, program director for STOTT PILATES^™ in Toronto. “If you are offering personal training sessions, consider purchasing a professional reformer, stability [Wunda] chair and trapeze [Cadillac] table. Once you’ve determined what services you’ll offer and how much space you have to work with, you can speak to a Pilates equipment manufacturer to determine your equipment needs.”

Equipment is a significant start-up cost. Portable reformers can cost between $2,000 and $2,500 each, and stationary reformers can cost upwards of $4,000 each with additional accessories. Trapeze table prices range from $3,000 to $6,000, and stability chairs range from $500 to $1,000 each. “When purchasing equipment, get expert advice from equipment and training providers about which apparatus is best to start with and what the next [addition should] be if your program begins to grow,” says Christine Romani-Ruby, MPT, ATC, cofounder and CEO of PowerHouse Pilates. “Price several companies and try the equipment at trade shows and conventions.”

One way to save money when purchasing equipment is to negotiate a discount with your training provider. Ask whether the contract includes equipment discounts and consultation. Many training providers have relationships with equipment companies and will provide discounted rates to companies that purchase training services and equipment products together.

“We consult on the best equipment type to match center needs, space and storage concerns, budget and level of instructor,” says Romani-Ruby. “This consultation is free with a training or equipment purchase. We are able to get discounts on equipment because we buy so much, and we extend these discounts to our customers. We feel that this will leave them more dollars to spend on a good education.”

Consider lease options, Endelman recommends. Depending on your club’s credit, initial costs may be quite low. At the end of the lease, clients may be able to purchase the equipment. “Clubs can sell used equipment to members when the clubs are ready to upgrade. Another option we make available is a retrofit to upgrade equipment.”

Talk to a variety of equipment and education providers, other club owners and program directors to get perspectives on what will work for your facility. Behrend says that working with the PowerHouse Pilates staff was invaluable when she was developing her program. “Not only did they help us with instructor training, but they also provided consultation on how to start the program. They gave us advice on all the little details that are essential to program profitability—things like how to package classes and how to track member sessions.”

Lindsay Merrithew, president and CEO of STOTT PILATES, says that a full-service equipment supplier can give both confidence and support. “Over and above education and training, I would seek extensive marketing support. A good supplier assists in planning by offering communication/promotional advice, access to existing advertising materials, [answers to] frequently asked questions, and staff training to presell sessions and create demand.” >

An equipment-based Pilates program is doomed from the start without a properly trained staff. The training required to teach a basic reformer class costs anywhere from $250 to $1,500 per instructor. There are a number of ways to finance this investment, according to Endelman. “Some clubs ask instructors to pay for the training themselves, while others provide it. One method that works well is when the club packages it as a loan. If the trainer [is still] working for the club after 1 year, the club forgives the loan. Fee splits for trainers can vary depending on whether the facility or the trainer paid for the training. For example, if a club pays for the training, the split may be 60/40 in favor of the club. Some trainers may receive as much as 70/30.”

Moira Merrithew recommends that if you hire pretrained staff, you make sure they are certified by a credible organization. “Ask potential employees where they were trained and what certification level they’ve obtained. Ask them to present copies of their certificates and other relevant documents. Always check credentials with certifying bodies. If you plan to employ a group of Pilates instructors, host a certification training course at your facility. This way you’ll foster a great team atmosphere while having a group of instructors certified in a consistent method.”

Training your own staff can provide many advantages. “We chose to recruit internally,” says Norris Tomlinson, national director of training at Bally Total Fitness Corporation in Chicago. “Our own best candidates were already trained in group exercise. To enhance the quality and consistency of the program, we created an instructional video series in addition to offering live education.” Another benefit of recruiting from within is that existing staff already know the organizational culture and the members. The instructors have already earned credibility and are likely to stay with the facility.

At Cypress Creek, Behrend selected 10 instructors to cover 17 classes per week. “I picked my most mature, experienced, enthusiastic and educated staff, whose average age was over 40. Most of them already taught many classes, and the members trusted them. Without a doubt my instructors are the number-one reason for the program’s success.”

Successful program directors know that enthusiastic, knowledgeable staff members are crucial when it comes to marketing any new program. Taking time to educate staff is the only way to build the excitement you want. “One of the best things Karen [Behrend] did was train our member services staff on what Pilates is so we could describe it to members,” says Penny Brown, member services representative at the Cypress Creek Family YMCA. “She explained how to run the registration process for the orientations, beginner clinics and regular classes.”

Also very important, says Endelman, is getting the personal training department on board with the Pilates program. “Get the trainers to try out the Pilates equipment so they can have the experience and understand it. Personal trainers are used to being a profit center. Management needs to truly be behind the new program and make it clear that it is not cannibalizing the available market. Pilates complements traditional personal training; people who already use personal training services are likely to be interested in Pilates.”

Educating members is another essential step in program marketing. “The group exercise instructors talked it up in their classes, especially in our Pilates mat classes, which we have had for 2 ¹⁄2 years,” says Behrend. “The Pilates brochure also worked great. What was most important, however, were the free demo classes.”

Behrend currently offers one free 30-minute orientation a week. Members who want to participate in the program must then enroll in a 4-week beginner clinic that meets once a week and costs $40 per person. After completing this clinic, members can purchase class cards, good for 6 months. The cards are valid for group reformer classes with six participants, semiprivate sessions with two participants or private sessions. From the first week of free orientation classes, all 17 classes per week have been filled.

“Grassroots marketing is the most effective for drawing members into a Pilates program,” says Clark. “Most Pilates programs get the majority of their customers from word-of-mouth advertising. This type of marketing works best when you require the Pilates instructors to do a monthly promotion—an orientation clinic, an equipment demonstration or a free mini-class—as part of their contract. Often a center will pay all or part of an instructor’s education, and in return the instructor must participate in program promotions each month to ‘work off’ her education.”

Regarding fees, while there are no formulas per se, it is useful to know what your market can bear, according to Moira Merrithew. “Your group Pilates classes should be on a par with your other group classes, especially if you offer programs such as Body Training Systems or Spinning^®.” On the other hand, Endelman suggests that private training for Pilates be set at the same rate as personal training, with semiprivate and small-group sessions proportionately lower. For example, a private session might cost $65, a semiprivate session $35 per person and a trio session $25 per person. “The club, therefore, is able to generate more total revenue in small-group sessions,” says Endelman. Some facilities also offer Pilates programs to nonmembers at a slightly higher fee to attract new participants.

“The return-on-investment schedule is directly related to the effort and commitment put into the program,” says Lindsay Merrithew. “A dedicated Pilates studio, when well marketed and used daily for private, semiprivate and group reformer sessions, can generate an impressive return on investment in the first year. A facility that dedicates 400 square feet of space to four or five pieces of equipment and accessories and a well-balanced program has the opportunity to be clear of its equipment investment in the second year.”

Launching any new program takes time, effort and careful planning. The best programs are organized with a long-term vision. “The goal is to have your clients’ well-being top of mind,” say the Merrithews. “We suggest starting clients in either private or semiprivate sessions to allow them to acquire sufficient understanding of the exercises and equipment prior to entering a group situation. Sometimes there are economic concerns, as private instruction is expensive. In that event, we recommend that the facility invest in a lower client-to-instructor ratio [for its introductory group classes]. This way, instructors can better monitor whether clients are performing exercises in a safe and controlled fashion. This will also enable the clients to advance with a better understanding of the exercise principles. Eventually they’ll be less closely monitored as they advance to more complex exercises. We find the attrition rate tends to be lower when this approach is taken, resulting in a higher revenue volume per client.”

Endelman makes an important point about differentiating. “Usually these programs are rolled out under group exercise. The staff are often not used to charging fees and making money directly, and they shouldn’t make assumptions. They need to know how to set up a profitable program and how to account for it. They may need to market it differently—for example, make the sessions more visible to members. Make sure the mind-set is reinforced to run the Pilates program as a profit center, rather than as a typical group exercise expense center.”

Considering the current and growing interest in Pilates, establishing a fee-based equipment program makes good business sense. Consumer expectations for Pilates are likely to increase. A well-managed Pilates program can increase member
satisfaction, strengthen the membership base, enhance your facility’s image, provide competitive advantages and sweeten the bottom line.