I like to read. Probably not a surprise as most people that fancy themselves writers tend to be voracious readers as well. I read almost anything I can get my hands on — newspapers, novels (classic and cheesy), and magazines from Muscle and Fitness to Business Week. And we won't even get into comic books — although I'm a sucker for a good Spider-Man every now and then.
I just plowed through an issue of Business Week in which it listed its Global 1000 companies. On that list the number 1000 company came in at just under $4 billion in market value. Meanwhile, in its top 10 listing of companies in terms of sales, number 10 was Mitsubishi at $112.97 billion. The Club Industry Top 100 ranked its leader at just over $1 billion. I think that shows how far this industry still needs to go before it becomes relevant to the mainstream.
Maybe the first step toward this growth was hinted at in the July issue of Inc Magazine. Yes, like most of you I often find myself a month or two behind on my reading list.
The July cover story was entitled “America's Hometown Businesses.” The story put an interesting twist on local and smaller businesses, the ones that Inc covers and most of the readers of Club Industry are, by asking celebrities to talk a little about their favorite hometown business.
The choices were as varied as the personalities themselves. Jack Welch, the former CEO of General Electric picked a clothier from Connecticut; Michael Dell, founder and CEO of Dell Computers picked a running store in Austin, TX; novelist Robert B. Parker picked a women's clothing store in Cambridge, MA; Kevin Smith, a movie director and actor and, one of my personal favorites, picked his own comic book store in Red Bank, N.J. Actor and game show host Ben Stein (you do remember him from “Ferris Bueller's Day Off” don't you? Anyone? Anyone?) picked a barber shop in Washington, D.C. Another pick, this time from Dilbert creator Scott Adams, was ClubSport of Pleasanton, CA.
What was so striking about this article was the fact that all of the picks never mentioned the price of the product or service as the overriding reason for the choice. What was mentioned was the quality of the product, the quality of the service rendered and, most important, the quality of customer service.
In fact, Adams when speaking of ClubSport said, “The staff is always smiling and friendly and intelligent and helpful. Everything about the place is right from the layout to the carpet to the colors to the number of windows.”
Funny, he didn't mention the great monthly rates. Huh, he didn't mention the percentage off initiation fees the club was offering if he renewed today. He did mention exciting new classes and equipment. He did mention the operating hours. He did mention in the article that the most impressive thing about the company is that it “really knows their members.” These were sentiments echoed by most of the others interviewed about the companies they picked.
Why is it then that so often the sight of competition or lean times sends the industry scrambling to cut prices to stay ahead of the curve?
It may be radical, and of course, not everyone is as price insensitive as Michael Dell and Scott Adams, but maybe it is about time that this industry realized that it is a specialty industry that needs to compete for peoples' time, attention, and money not by cutting rates and discounting prices at the cost of reputation. Maybe if all clubs thought of themselves as “high-end” when it came to service and innovation there'd be no need to offer memberships at zero down and zero a month. Sure we're not there yet, but some are getting awfully close. And maybe, before long, a fitness company may just crack that Business Week Global 1000.