When to change your health club business model
Since the beginning of the health club industry, owners have been in the membership business. Sure they may think they are in the fitness, wellness or even the weight-loss business, but if they really look at their books, they are in the membership business.
Within the four walls of the facility there is fitness, wellness, community and more, and many of those lead to some ancillary sales, but in the end, unless people walk through the front door there is no business under the traditional membership model. You don’t see restaurants being successful with only a prix-fixe menu.
People have long-been conditioned to sign a contract for 1, 2 or even 3 years to cut their monthly rates or get a “break” on enrollment fees — often because there were few options — but that way of consumer thinking has been eroding slowly; and it is speeding up as everything from cell phone to cable companies are changing their models to attract commitment-phobes and stay ahead of growing competition. Add to that the onslaught of niche providers such as boot camps, yoga and personal training studios, and CrossFit locations popping up on just about every corner, and traditional club owners are feeling the squeeze to bring in exercisers and compete for limited dollars.
While some health clubs have had great success with no-commitment memberships they run into a problem of high attrition reaching into the 90-percent range, adding to the marketing costs of attaining new club goers, but that doesn’t mean it’s not a way to go – or the only way.
Clubs may need to consider adding an a la carte menu of options so they are not missing prospects that are looking for specific aspects of the fitness or that are perhaps thinking of coming in, bur aren’t as committed as they might be after a month or two.
The options are limited only by your imagination (and some solid marketing and management).
Offering shorter or no commitment memberships can bring in commitment adverse members; selling class cards to compete with yoga and Pilates studios; doing non-member rates for boot camps and other functional and circuit training classes to bring in people to your club from the CrossFit box in town. Sure offering one-offs and short-term memberships may make it harder to project long-term revenues, but it may bring in additional customers and revenues.
While this mix of short-term and long-term offerings can bring in additional revenues, it does mean that management needs to step up their game to keep these short-timers happy and heading back time and again.
Maybe it’s an exercise class that always starts 10-minutes late. It could be that the locker room is in a bit of disarray. Worst of all, it is that the customer service team is not doing their part to make everyone that walks through the door feel welcome, informed and happy to be there, which will scare off both long- and short-timers.
While the membership model may never truly disappear (and it probably shouldn’t) owners have the opportunity to work in new revenues models to turn other fitness facility into a hub of health and wellness regardless of the customers’ needs.