Health club owners are always searching for ways to attract new members. So when a well-known Web site company approached Powerhouse Gym International's Henry Dabish about selling memberships online, the idea intrigued him.
But rather than outsource the job, Dabish decided to manage it in-house. Three months after launching, Powerhouse has begun regularly harvesting a client or two from its Web site's membership section.
“We aren't looking at it to be a large, significant portion of our sales,” Dabish says, “but you have to accommodate people because if you don't, someone else will.”
For years technology experts have been extolling the potential of commercial sales on the Internet. Some have even gone so far as to predict the eventual demise of brick and mortar stores. Well, buildings haven't disappeared, but Internet sales are clearly catching on. People like the Web's 24/7 convenience, and if holiday retail figures are an accurate barometer, the number of people shopping online is steadily growing. It's no wonder then that the more progressive club owners in the traditionally conservative industry are staking out a place on the digital superhighway.
“There came a point that if you didn't have a Web site you looked a little bit backward,” says Nanettee Pattee Francini, co-founder of The Sports Club/L.A., an upscale national chain of 10 clubs across the country. “With a sophisticated clientele one of the first things they do is go to the Web to check you out.”
While most clubs have Web sites, only a fraction use the Internet to actively market online memberships. One reason is that it costs a significant amount of money for what is arguably a club's least potent arrow in its marketing quiver. 24 Hour Fitness, which has been selling online memberships since 1999, gets less than 10 percent of its sales from the Web.
“It's a tool, a component,” says Bryan Andrus, vice president of business development for 24 Hour Fitness. “It is an order taker more than anything else right now. I'm not sure it is possible to adequately convey the experience someone will have inside the club on a flat panel.”
But Rob Frankel, a Los Angeles-based branding expert, disagrees. He says clubs aren't selling more memberships online because owners don't understand how the Web works.
“Most of the health clubs have a database of customers and they really think all they have to do is send emails and put stuff up on the Web and that's the end of it,” Frankel says. “They are missing the point completely.”
The point, according to Frankel, is building a brand and helping potential clients connect with the brand. You do that, he says, by doing things like establishing an online discussion group where members interact and talk about workout regimens, nutrition and other club-related information. That conveys a sense of community to someone researching a club.
“The club gets the credit for helping us in our health lives in a way that goes far beyond how many steps and reps you have to do,” Frankel says. “That is how you turn users into evangelists. Club owners don't understand that. It's about letting people see other people actively endorsing the club.”
Frankel says his strategy has resulted in a 30 percent sales increase when comparing one month to the same month in the previous year.
“This stuff works,” Frankel says. “Most club owners tend to be very shortsighted. They are missing the boat by not doing it right now.”
It's not, however, cheap. A club owner can expect to pay anywhere from $100,000 to $1 million for a well-designed Web site. Monthly upkeep can run several thousand dollars.
“When you get the cost, you start to get very practical about what you need up there [on the Web site] and what a dream it is,” says Francini, who spent $100,000 for her club's site. “Boy, did I have some big ideas. It is expensive, and once you get a site up, you have to continually update it.”
Francini doesn't expect The Sports Club/LA's Web site to pull in many new memberships. Rather, the Web site is meant more to wet a potential client's appetite. In that sense, the Web does result in memberships.
It's difficult to calculate the number of new members brought in by the Web site, Francini says. “We get enough interest to feel that it is worth it.”
Francini cautions that club owners considering a Web site should budget for continuing upkeep. Whoever is chosen to design the site should be current on the technology and make sure you or a staff member is part of the design team. She says this is the best way to insure that the finished product reflects your club. And for Francini, there is one other downside to Web marketing.
“Do you want to portray your company in a one-dimensional medium?” she says. “You really have to be intelligent and really weigh the benefits.”
Health Fitness Corp.'s Katherine Hamlin liked the benefits of marketing memberships online. She just wanted to enhance the opportunity. So when Health Fitness decided to launch a Web site with online membership services, Hamlin discovered that people not only did online research, but that different regions of the country used different search terms in doing their research. For instance, people in Cleveland keyword searched for “athletic centers” while people in Atlanta favored the key word “fitness.” As part of its online strategy, Health Fitness paid several search engines to own the top fitness slots.
“It is a completely different way of thinking, but it helps you optimize and get people to you faster,” Hamlin says. “We wanted to be the number one company at the top of the rankings. You just have to pay for that premium spot.”
And so far it has paid off. Since its rollout in April at three of the company's 20 clubs, the Web site has proven a useful tool for keeping members abreast of club information, such as class schedules and pool temperature. It has also been a resource for new members.
“The first few months we were getting anywhere from one to four leads,” says Brad Calabrese, manager of the company's facility in downtown Cleveland. “Right now, we are getting seven to 10 leads.”
More importantly, Calabrese says he is converting 45 to 50 percent of those leads into memberships, a much higher conversion rate than off-the-street walk-ins.
“I do think you must have the tool to get people to your club because of the increased competition,” Hamlin says. “I still think people want to test drive (the club) and try it out. They want to know that it's clean.”
Individuals buying online memberships from 24 Hour Fitness are generally former members or people referred by friends, says Andrus. On the whole, most buy 90-day memberships and like the convenience offered by the Web site.
“These are people who are going to be in the area for a period of time, or they are not quite sure about their commitment to fitness or 24 Hour Fitness,” Andrus says. “The good news is we find a tremendous number of people convert (to longer memberships).”
The company decided to offer memberships online five years ago as a matter of convenience. The idea was to make joining a club as easy as possible. In fact, part of the company's brand is easy, accessible fitness. For example, Andrus wanted the online transaction to be more user-friendly.
“We want people to think of us as a place to go where it is easy,” he says. “We want to knock down as many barriers as possible.”
Like his colleagues, Andrus doesn't believe photos or copy on a Web site can replace the experience of going to a club. To encourage coming in, 24 Hour Fitness offers online prospective clients a guest pass that is immediately valid, regardless of where the customer is located — even if they are signing up for the pass in the club's parking lot. The system integration to make that happen required some computer wizardry.
“Technologically, it was a fair amount of work to set up,” Andrus admits. “Frankly, we have to be very crisp about how we describe the club and maintain an accurate list of the club and the amenities. You have to keep on top of it. There is a lot of care and feeding.”
And while the Web site cost the company more than $1 million to build and several thousand dollars a month to maintain, Andrus says it has been money well spent.
“The return on investment is staggering,” he says. “We could have spent 50 times what we spent on the site and still be happy. The site has done very well for us from attracting new members to retention.”
No matter how dazzling or attractive a club's Web site may be, selling online memberships ultimately relies on the in-club experience. For now, at least, no one expects the Internet to replace traditional sales methods.
“We view the Web as a support to the sales process, not to fully replace it,” Andrus says. “It can't. It's an additive, an incremental help to the sales process. At the end of the day, even with a very sophisticated tool, the club experience is still something that comes to life when they walk through the door and feel that energy. We know there is nothing we can do to replace the way the brand comes to life.”