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Health Club Management

Health Club Management

features

Trends: Are you fit for 2020?

Paul Bedford eases us into the new year with a look at how to tackle the competition

By Dr Paul Bedford PhD, Retention Guru | Published in Health Club Management 2020 issue 1
 / shutterstock
/ shutterstock

In today’s competitive market, when another operator opens up nearby, you can expect to lose 20-50 per cent of customers for a period of 6-18 months.

What can you do to survive, thrive and maintain a profitable facility, by planning for and responding to this kind of challenge?

Blurred lines
The fitness industry used to consist of big clubs and small clubs; it was very linear, but now we have brands with no physical club at all, such as Gympass, ClassPass and Hussle and options for consumers are now so broad it’s no longer enough just to have a good location.

Add to that the diversity we’re seeing with the development of facilities, such as Clip ‘n Climb, Bear Grylls Fitness, table tennis concept, SPIN and relaxation and meditation centre, CH/LL and with streaming of fitness now so readily available, anyone and everyone can have access to exercise and guided workouts.

With the industry evolving, diversifying and niching as it matures, health and fitness operators need to defend their market and make significant gains in both member acquisition and retention in order to survive. We’d advise concentrating on three areas:

• Create a differentiated proposition from the competition in order to sustain the business in the long-term by standing out from rivals.

• Consolidate and increase your gross membership base – being the dominant operator in your market and location will help to maintain and increase your market share

• Increase the lifetime value of each member – not just by increasing the length of their membership or the amount they pay each month, but also by increasing the amount they pay out as secondary spend in areas such as on F&B, supplements, food deliveries or retail. With the right strategy, you could have members who spend a considerable amount in your club in a short period of time

Paul Bedford
"Operators need to defend their market and make significant gains in both member acquisition and retention in order to survive" - Paul Bedford
Solid business
Dragons’ Den – how do you measure up to their key questions?

If you watch programmes like Dragons’ Den or Shark Tank you’ll have realised there are ten main questions investors ask to understand if a company is a solid business or something that’s ill conceived, not scalable and won’t stand the test of time.

• What’s your idea, business or concept?
This is your elevator pitch. You need to be able to deliver it in less than a minute, explaining what your business does, why you’re doing it and how it can help other people; what problems does it solve?

• What’s your route to market?
Different businesses use different ways to attract customers. If you have a physical club it’s likely to be face to face walk-ins, flyers, digital marketing and your impact sales team. For a digital brand it will be online and media-based. You need to identify how you’re going to find and attract customers.

• What do you sell and for how much?
What’s your sales forecast? How do you work out your pricing? This is the most difficult step because, as you’ve seen on Dragons’ Den, people always think their business is worth more than it actually is when it comes to establishing value.

It’s finding that balance – the sweet spot between what you believe it’s worth and what others think it’s worth. It’s also about cost of delivery. What does it cost you to deliver your product or service?

Going through this process will give you a solid understanding of what business you’re in. One of the biggest challenges we see in the industry is operators getting sidetracked by trends, thinking ‘we could do that too’, which often takes away from the core product.

I truly admire John Treharne. He came up with The Gym Group concept and hasn’t changed it fundamentally.

Sure he’s tweaked, evolved and improved the product, but he decided to do one thing and do that really well.

• Differentiate or Die
As we’ve said before, the fitness industry offers consumers an endless number of choices that range from wildly different to virtually identical.

Understanding your position in the market, by identifying who you’re looking to attract and delivering solutions to meet their needs, is key to understanding how you can differentiate yourself from the competition. This is the only way to retain and gain customers in this increasingly competitive environment.

John Treharne had a clear vision in building The Gym Group
10 things to differentiate your business
Each will enable you to stand out from your rivals. Mix them up to create your positioning

1. Establish your brand positioning – where do you sit within the market?

2. Be first to market – just as Hoover is synonymous with vacuums, so Spinning is commonly used for indoor cycling

3. Aim for attribution ownership, think Les Mills for structured workouts, Mercedes for engineering, Ferrari for speed

4. Focus on leadership – are you a respected in your market? Do people admire and follow what you’re doing?

5. Reference your heritage – think Gold’s or David Lloyd Leisure. Can you trade on being well established?

6. Market a speciality – focus on developing a niche product, as Concept2 and Soul Cycle have done

7. Be preferred – are you the product that people choose over all the others?

8. Be great at what you do. Brands like 1Rebel stand out because of the way they teach classes

9. Create the latest trends – get inspired by something up and coming

10. Look back as well as forwards: think Dr. Martens, which were popular in the 70s and are now back as a trendy brand

Brand like 1Rebel stand out because of the way they teach classes
How to win in a competitive market

Defending yourself against competition by working where it’s coming from and what the new competitor’s differentiator and proposition is. This is the only way to effectively manage the impact of increased competition.

• Do your homework: find out who you’re competing against

• Plan your response carefully

Work out what it would mean to your revenue if you lost 30 per cent of your customers. Don’t forget to factor in staff you may lose to the competitor too.

Decide what you’ll do to differentiate and position yourself to stand out. Establish what budget you’ll need to cope with the impact of lost members/staff and additional marketing. Calculate what you can sustain and what you’ll have to drop.

Create a timeline
Working backwards from when the competitor is due to open, establish how long you’ve got to collect information about them and what you need to find out and devise a plan.

Set a date for when you’ll start to implement these tactics and create a realistic timeline for action.

Action
Decide if you’re going to change your membership offering. If so, train all staff so they can explain why it’s changed. Be honest and use a consistent message throughout your PR and marketing.

You need one frictionless approach.

Review, revise, renew
Keep track of what you’ve done and how numbers are changing in response. How many people did you lose last month? How quickly are people coming back? Measure sales and attrition and keep an eye on what customers are saying via an effective feedback mechanism.

CASE Study:
Magna Vitae

If your numbers aren’t changing, sometimes that equals success.

Two years ago, the operating landscape around some of the centres run by leisure trust, Magna Vitae, changed dramatically; they were no longer competing in the same market, and developed a plan to protect themselves from competition.

Working with Paul Bedford they undertook a retention review, concentrating on their mission and vision statements, core values and expected staff behaviours and setting minimum service standards to be practised on a daily basis.

With a broad range of facilities on offer, staff were encouraged to think similarly around the quality of their interactions with customers; to improve their understanding of how they could persuade them to do what they wanted, increase visit frequency and help them achieve their goals.

Evaluation and feedback tools meant Magna Vitae could also monitor improvements in customer satisfaction within all areas of service.

With low cost competitors coming into play, Magna Vitae forecast to lose 4,000 members over a two-year period, but following the programme, memberships has remained steady, and with a new centre on the cards and a refit underway, Magna Vitae is confident business will remain stable.

Magna Vitae says it has fought off a competitive threat by focusing on service
http://www.leisureopportunities.com/images/imagesX/176423_136543.jpg
Paul Bedford tells us some of the best ways to keep up with the competition in 2020...
Paul Bedford,retention fitness, retention gyms, trends,
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Opinion: Customer Feedback: the Good, the Bad and the ‘Could be Improved’ Why health clubs need to take action in 2020 to retain their New Year customers
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features

Trends: Are you fit for 2020?

Paul Bedford eases us into the new year with a look at how to tackle the competition

By Dr Paul Bedford PhD, Retention Guru | Published in Health Club Management 2020 issue 1
 / shutterstock
/ shutterstock

In today’s competitive market, when another operator opens up nearby, you can expect to lose 20-50 per cent of customers for a period of 6-18 months.

What can you do to survive, thrive and maintain a profitable facility, by planning for and responding to this kind of challenge?

Blurred lines
The fitness industry used to consist of big clubs and small clubs; it was very linear, but now we have brands with no physical club at all, such as Gympass, ClassPass and Hussle and options for consumers are now so broad it’s no longer enough just to have a good location.

Add to that the diversity we’re seeing with the development of facilities, such as Clip ‘n Climb, Bear Grylls Fitness, table tennis concept, SPIN and relaxation and meditation centre, CH/LL and with streaming of fitness now so readily available, anyone and everyone can have access to exercise and guided workouts.

With the industry evolving, diversifying and niching as it matures, health and fitness operators need to defend their market and make significant gains in both member acquisition and retention in order to survive. We’d advise concentrating on three areas:

• Create a differentiated proposition from the competition in order to sustain the business in the long-term by standing out from rivals.

• Consolidate and increase your gross membership base – being the dominant operator in your market and location will help to maintain and increase your market share

• Increase the lifetime value of each member – not just by increasing the length of their membership or the amount they pay each month, but also by increasing the amount they pay out as secondary spend in areas such as on F&B, supplements, food deliveries or retail. With the right strategy, you could have members who spend a considerable amount in your club in a short period of time

Paul Bedford
"Operators need to defend their market and make significant gains in both member acquisition and retention in order to survive" - Paul Bedford
Solid business
Dragons’ Den – how do you measure up to their key questions?

If you watch programmes like Dragons’ Den or Shark Tank you’ll have realised there are ten main questions investors ask to understand if a company is a solid business or something that’s ill conceived, not scalable and won’t stand the test of time.

• What’s your idea, business or concept?
This is your elevator pitch. You need to be able to deliver it in less than a minute, explaining what your business does, why you’re doing it and how it can help other people; what problems does it solve?

• What’s your route to market?
Different businesses use different ways to attract customers. If you have a physical club it’s likely to be face to face walk-ins, flyers, digital marketing and your impact sales team. For a digital brand it will be online and media-based. You need to identify how you’re going to find and attract customers.

• What do you sell and for how much?
What’s your sales forecast? How do you work out your pricing? This is the most difficult step because, as you’ve seen on Dragons’ Den, people always think their business is worth more than it actually is when it comes to establishing value.

It’s finding that balance – the sweet spot between what you believe it’s worth and what others think it’s worth. It’s also about cost of delivery. What does it cost you to deliver your product or service?

Going through this process will give you a solid understanding of what business you’re in. One of the biggest challenges we see in the industry is operators getting sidetracked by trends, thinking ‘we could do that too’, which often takes away from the core product.

I truly admire John Treharne. He came up with The Gym Group concept and hasn’t changed it fundamentally.

Sure he’s tweaked, evolved and improved the product, but he decided to do one thing and do that really well.

• Differentiate or Die
As we’ve said before, the fitness industry offers consumers an endless number of choices that range from wildly different to virtually identical.

Understanding your position in the market, by identifying who you’re looking to attract and delivering solutions to meet their needs, is key to understanding how you can differentiate yourself from the competition. This is the only way to retain and gain customers in this increasingly competitive environment.

John Treharne had a clear vision in building The Gym Group
10 things to differentiate your business
Each will enable you to stand out from your rivals. Mix them up to create your positioning

1. Establish your brand positioning – where do you sit within the market?

2. Be first to market – just as Hoover is synonymous with vacuums, so Spinning is commonly used for indoor cycling

3. Aim for attribution ownership, think Les Mills for structured workouts, Mercedes for engineering, Ferrari for speed

4. Focus on leadership – are you a respected in your market? Do people admire and follow what you’re doing?

5. Reference your heritage – think Gold’s or David Lloyd Leisure. Can you trade on being well established?

6. Market a speciality – focus on developing a niche product, as Concept2 and Soul Cycle have done

7. Be preferred – are you the product that people choose over all the others?

8. Be great at what you do. Brands like 1Rebel stand out because of the way they teach classes

9. Create the latest trends – get inspired by something up and coming

10. Look back as well as forwards: think Dr. Martens, which were popular in the 70s and are now back as a trendy brand

Brand like 1Rebel stand out because of the way they teach classes
How to win in a competitive market

Defending yourself against competition by working where it’s coming from and what the new competitor’s differentiator and proposition is. This is the only way to effectively manage the impact of increased competition.

• Do your homework: find out who you’re competing against

• Plan your response carefully

Work out what it would mean to your revenue if you lost 30 per cent of your customers. Don’t forget to factor in staff you may lose to the competitor too.

Decide what you’ll do to differentiate and position yourself to stand out. Establish what budget you’ll need to cope with the impact of lost members/staff and additional marketing. Calculate what you can sustain and what you’ll have to drop.

Create a timeline
Working backwards from when the competitor is due to open, establish how long you’ve got to collect information about them and what you need to find out and devise a plan.

Set a date for when you’ll start to implement these tactics and create a realistic timeline for action.

Action
Decide if you’re going to change your membership offering. If so, train all staff so they can explain why it’s changed. Be honest and use a consistent message throughout your PR and marketing.

You need one frictionless approach.

Review, revise, renew
Keep track of what you’ve done and how numbers are changing in response. How many people did you lose last month? How quickly are people coming back? Measure sales and attrition and keep an eye on what customers are saying via an effective feedback mechanism.

CASE Study:
Magna Vitae

If your numbers aren’t changing, sometimes that equals success.

Two years ago, the operating landscape around some of the centres run by leisure trust, Magna Vitae, changed dramatically; they were no longer competing in the same market, and developed a plan to protect themselves from competition.

Working with Paul Bedford they undertook a retention review, concentrating on their mission and vision statements, core values and expected staff behaviours and setting minimum service standards to be practised on a daily basis.

With a broad range of facilities on offer, staff were encouraged to think similarly around the quality of their interactions with customers; to improve their understanding of how they could persuade them to do what they wanted, increase visit frequency and help them achieve their goals.

Evaluation and feedback tools meant Magna Vitae could also monitor improvements in customer satisfaction within all areas of service.

With low cost competitors coming into play, Magna Vitae forecast to lose 4,000 members over a two-year period, but following the programme, memberships has remained steady, and with a new centre on the cards and a refit underway, Magna Vitae is confident business will remain stable.

Magna Vitae says it has fought off a competitive threat by focusing on service
http://www.leisureopportunities.com/images/imagesX/176423_136543.jpg
Paul Bedford tells us some of the best ways to keep up with the competition in 2020...
Paul Bedford,retention fitness, retention gyms, trends,
Latest News
Rising workplace stress among employees has led companies to increase their investment in incentives as ...
Latest News
David Lloyd Leisure is facing prosecution by Leeds Council over alleged health and safety breaches, ...
Latest News
Taking part in regular aerobic exercise could decrease the likelihood of developing Alzheimer's disease in ...
Latest News
A self-help studio marketing itself as a "first-of-its-kind self-development wellness space" will open in the ...
Latest News
A report outlining membership habits and retention in the fitness sector will be released at ...
Latest News
Xponential Fitness has signed a master franchise deal for its Club Pilates brand in Singapore, ...
Latest News
The Bee Network initiative – a joined-up cycling and walking network in Greater Manchester – ...
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Job search
POST YOUR JOB
Featured supplier news
Featured supplier: WEXO: The definitive cross training solution
A new cross training concept has arrived, offering weightlifting, athletic, metabolic, and functional exercises in a circuit format.
Featured supplier news
Featured supplier: Iyashi Dôme: the original Japanese sauna
In 2004, Shogoro Uemura, CEO of Iyashi Dôme, was inspired by his father’s work to create a new treatment protocol based on the Japanese tradition of sand bathing.
Opinion
promotion
Gyms need to look at ways to deploy technology that helps them engage with customers on a human level. This can be done by encouraging customers to leave as much real-time feedback as possible
Opinion: Customer Feedback: the Good, the Bad and the ‘Could be Improved’ Why health clubs need to take action in 2020 to retain their New Year customers
Video Gallery
DFC: We do more...
DFC
DFC are a leading direct debit collection company, providing cash flow solutions to happy clients from all over the UK. Read more
More videos:
Company profiles
Company profile: Precor
For more than 35 years, Precor has driven fitness forward. We continue that heritage every ...
Company profiles
Company profile: Stages Indoor Cycling
Stages Indoor Cycling is a product and technology company that is 100% focused on creating ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Fitness software
Go Do.Fitness: Fitness software
Audio visual
Hutchison Technologies: Audio visual
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Trade associations
International SPA Association - iSPA: Trade associations
Direct debit solutions
Harlands Group: Direct debit solutions
Locking solutions
Monster Padlocks: Locking solutions
Skincare
Comfort Zone - Davines S.p.A: Skincare
Wearable technology solutions
MyZone: Wearable technology solutions
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Spa software
SpaBooker: Spa software
Property & Tenders
Derby City Council
Property & Tenders
Diary dates
20 Feb 2020
The Old Truman Brewery, London, United Kingdom
Diary dates
06-07 Mar 2020
Palazzo del Ghiaccio, Milan, Italy
Diary dates
23-25 Mar 2020
Hilton, Barcelona, Spain
Diary dates
25 Mar 2020
Executive Boardroom, Middlesex University, London, United Kingdom
Diary dates
25-26 Mar 2020
Eastwood Hall, Nottingham, United Kingdom
Diary dates
26-29 Mar 2020
The Winter Gardens Blackpool, Blackpool , United Kingdom
Diary dates
27-29 Mar 2020
TeatroGoya Multiespacio, Madrid, Spain
Diary dates
19-24 Apr 2020
tbc, Beijing, China
Diary dates
04 Jun 2020
Marriott Forest of Arden Hotel & Country Club, Birmingham, United Kingdom
Diary dates
13 Jun 2020
Worldwide, Various,
Diary dates
17-18 Jun 2020
ExCeL London, London, United Kingdom
Diary dates
21-24 Sep 2020
Loews Coronado Bay Resort, Coronado, United States
Diary dates
17-23 Oct 2020
Pinggu, Beijing, China
Diary dates
30-31 Oct 2020
NEC, Birmingham, United Kingdom
Diary dates
27-28 Nov 2020
Athena, Leicester, United Kingdom
Diary dates
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