Saying the "R" Word

Today was the third day of CI 2008, and it didn't disappoint. I really thought that nothing could top Dr. Cooper's keynote yesterday (Pam blogged about that below, so be sure to check it out), but this afternoon's panel session "Fitness Business at a Crossroad: How to Hold on in Today's Economy and Prosper for the Future," was insanely good. Moderated by former Lifetime Achievement award winner Rick Caro, the sessions addressed issues affecting club owners today, and, yes folks, they said the "R" word: recession. The panel consisted of health club giants: Jeff Klinger, CEO Anytime Fitness; Gale Landers, CEO, Fitness Formula; Carl Liebert, CEO 24 Hour Fitness; and Scott Chovanec, president, Scott Chovanec and Associates.

To start the session off, Caro asked the panel to describe how their clubs were affected by the weakening economy and what they were doing to counteract it. Liebert started things off by saying that it was actually refreshing to hear people admit that the country was in a recession and that his 400+ 24 Hour Fitness locations were hoping to take advantage of the situation as much as they could by really focusing on member needs.

"Get out and talk to the people who are paying your bills," Liebert said. "Talk to your members."

Chovanec said that he was focused on retention as well, noting that it's five to seven times more expensive to attract new members than keep current ones. Klinger said that because he has smaller franchise clubs that they hadn't as dramatically felt the economy slowing, but that he was focused on all Anytime Fitness locations improving their club culture. He also hoped that the bailout on Wall Street would help shore up the ability to expand business. Landers said that attrition at Fitness Formula was up slightly but that the club company created a new member program in response to help with retention.

Focusing on retention and maintaining good, quality service was a theme heard repeatedly during the session, which later was open to questions from the audience. I was particularly struck by how solid the attendee's questions where. From picking Liebert's brain about how the fitness industry differs from Fortune 500 companies (Liebert was previously the CEO at Home Depot and said that although management may not be as strong as in some industries, the passion for helping people was unparalleled) and ways to reduce energy expenditures in the face of increased prices (turn the lights down and don't be afraid to bargain with your utility companies), you could obviously tell how important this issue was to people and what a great chance it was to pick these top dog's brains.

Over and over again, the panelists brought up the importance of a quality staff and quality programming, particularly for new members who are deconditioned and may be intimidated by the club. In addition, group exercise was said to be a fantastic retention tool that creates invaluable member-to-member relationships.

“Can you give them an instant experience?” Landers said. “As an industry, we have failed sometimes in giving a high-quality experience. We must use our current members to grow our current business through word of mouth.”

For more on this issue, be sure to check out the magazine in the coming months. The editors will be covering this issue and bringing you the latest on how clubs are enduring these tough times.

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