In my July column, I discussed “disruptive innovation” and its effects in the health club industry. I explained the difference between mastering sustaining innovations (being better at what you are already doing) and practicing disruptive innovations (establishing new markets or attacking from the low end). I still believe that health clubs have to become health clubs and not just fitness centers. The challenge for us will be to enter the mainstream of American lifestyling and end our reliance on an outmoded model that attracts and keeps only a relatively small percentage of consumers.
What is the outmoded model? Simply stated, it is the general reliance on equipment to take over the burden of fitness delivery in the standard club. In nine out of 10 clubs that I phantom shop each year, the fitness delivery system is some variation of the following:
Members sign a membership agreement, and the salesperson schedules their orientation appointment. By the way, there is seldom a follow-up appointment reminder on the part of most clubs. The majority of those clubs report to me that they have only a 60 percent show ratio for these orientations. A reminder about the session seems like an easy solution to this, right?
Members come in for their orientation appointment, which generally consists of a cursory health screening or PAR-Q evaluation and a standardized demonstration of how cable-stack and cardiovascular equipment work. Members also receive a workout chart that serves as their new fitness prescription.
The staff then tells the new members that a trainer is always around to help them, or the employees suggest that members buy personal training sessions to get the maximum benefit out of their memberships. That's like telling restaurant customers after their first visit, “The next time you come in, you'll have to seat yourself, set your own table, go get the menu, place your order in the kitchen, cook the food, serve yourself, make out the bill and pay the check.”
That's a little overstated, but not by much.
Lack of customer service has already driven significant disruptive innovation in our business as evidenced by the rapid rise of low-price chains such as Planet Fitness and big-box entrepreneurs such as Life Time Fitness. The origin of Curves derived simply from the creation of a market that did not exist prior to Curves' founders Gary and Diane Heavins' endeavor. While there may yet be room among existing facilities to find disruptively innovative ideas that will capture consumers' discretionary dollars, it is likely that those already in business will need to substitute stronger sustaining innovations to be able to consistently compete.
So what can clubs do that will make them disruptively innovative and thus be able to cope with ever-increasing competition on all fronts?
First of all, get rid of the membership card scanners or the key-chain tag readers, and have your receptionist (not your front desk person) swipe each person's card and offer a warm greeting. Make the reception area a greeting system, not a processing area.
Get your membership representatives to practice relationship sales instead of order-taking procedures. Before the membership tour, have the club representatives sit down with all prospective members and find out why they are in your club, what they want, what motivates them and what drags them down. Then determine the best way to get them started on a successful activity program. Basically, we need to avoid selling memberships and, instead, start counseling customers.
For many clubs, this way of doing business will be something they have not done before. They must train new members and integrate them into the facility's social structure. This may be challenging at first, but it will pay off handsomely in increased customer satisfaction and, ultimately, lower member attrition.
The other alternative? Clubs can keep doing it the way they have been and let the disruptive innovators take them over.
Michael Scott Scudder owns and operates MSS FitBiz Connection, an online-based club consulting and training service. Scudder can be reached at 505-690-5974 or mss@michaelscottscudder.com.