The age-old conundrum for operators of many traditional fitness facilities has been how to make money off their group exercise department, which often has operated as a retention tool that generated little to no revenue. With the growing popularity of small group training, some club operators are taking small group training out of the personal training department and are moving it into the group exercise department as a fee-based program, a move that is breathing new life into group exercise.
Personal training has transformed the industry by allowing clubs to charge for programming and pay to attract expert staff, says Phillip Mills, CEO of licensed group program company Les Mills, but only 5 percent of members do personal training. Small group training allows club owners to offer the strong trainer-client relationship to a wider group of people.
"The industry is looking for the ability to give a more intense one-on-one service and to derive secondary income from it," Mills says, adding that small group training also creates social bonds among members and between members and staff that help with retention.
For the past five years, small group training has been the "holy grail" in the industry because of the bonding it creates and because clubs can charge for it, Mills says. Alternative clubs, such as CrossFit, are evidence that small group training can work.
However, traditional big-box clubs have had less success integrating small group training into their programming, partially because they have created obstacles to its success such as charging six to 12 weeks in advance and forcing members to come at fixed times, Mills says. Plus, developing high-quality small group training can be difficult for some clubs and can result in programs that are too tough and boring, Mills says.
That is where branded pre-choreographed companies such as Les Mills are stepping in. Les Mills developed its Grit program, which is its first licensed program for small group and team training, to be similar to exercises done in a personal training session but set to motivating music that makes it fun, Mills says.
Grit is a series of three small group training or team training programs that Les Mills recently introduced to the fitness facility market in the United States. Photo courtesy of Les Mills.
Mills suggests that traditional clubs offer a book-as-you-go system in which members can choose to attend a class on the day of the class for a fee. Others, however, say that getting people to commit in advance to a set group of sessions is the way to go because the participants then build camaraderie and the sense of a team. One of VicteliB's licensed programs, Boot Camp Challenge, is set up to handle groups of about 20 people who attend classes on a set day at a set time for a fee, says Lori Patterson, founder of the St. Louis-based company.
"People can't just drop in like a free class on the schedule," Patterson says. "People have to sign up for it, pay for it and show up for it. What is different about our program is that we are about building a team and a camaraderie because we know that that is one of the biggest influencers of keeping people on track. If you have 20 people in a camp and one of them does not show up, the other 19 will text them and ask them, 'Where were you at 5 a.m. this morning?'"
Clubs that offer the Boot Camp Challenge often charge $250 per person for a program's term, which can equate to $5,000 in revenue, she says. A fitness facility with one trainer and one program can make $70,000 extra a year with Boot Camp Challenge, Patterson says.
Fee paying is a large part of what can help small group training turn the group exercise department into a revenue generator that pays for itself. When Patterson's company first started, she spent a lot of time educating people about fee-based programming, trying to convince them that they could make money off of it and that it might belong in their group exercise department rather than their personal training department.
"They thought that if there was a fee attached, that they had to put it in their personal training department," Patterson says.
And many clubs still do have small group training in their personal training departments. They also allow the trainers to create their own small group training programs. The problem with that, according to Ann Gilbert, director of fitness for Shapes Fitness for Women, is that trainers can put together a program, build a following and then take that program with them to their own business because it belongs to the trainer.
Boot camp challenge can handle groups of about 20 people and often are held beyond the confines of club walls. Photo courtesy of VicteliB.
Branded programs help clubs create a branded experience, Gilbert says, adding that she has been a believer in small group training for 10 years, but her group of 13 women-only clubs in Florida only moved to branded small group training programs in 2011. The clubs offer a variety of small group training classes, including Aura Pole Dance Fitness, Indo-Row, Boost Training Camp, the aquatics-based Water in Motion and programming around kettle bells and TRX that are not branded programs.
Other companies offering pre-choreographed programs, some for small groups and some for teams, include RIPPED, Tangoflex and P90X. Some of these programs are licensed while others are not, but the pre-choreographed and standardized movements mean that the coaches do not have to spend time developing the small group training. Instead, they can focus on memorizing the program and coaching technique to participants during the classes.
"No matter who teaches it, it is still the same class," Gilbert says. "A branded program gives them a uniform experience."
Shapes Fitness pays for the overall licenses for its pre-choreographed programs, which often run about $200 or more per program per month, Gilbert says, while the instructors pay for the choreography quarterly, which often run around $35 per quarter per program. Instructors also pay for their own certifications, which can run $100 to $300.
The cost is worth it because all the branded programs supply their own marketing materials that can be downloaded for no additional cost, which saves clubs time and money doing their own creative work, Gilbert says. Many branded program companies also send a coach to the clubs to help instructors, to launch the programs and to plan events around the programs.
To offset these costs and to pay instructors more, Shapes Fitness charges for its small group training, something that created resistance from some members who did not understand why they must pay for small group when they got group exercise for free. The Shapes Fitness staff had to offer a unified message about the additional benefits received from small group training, and that message seems to be quelling complaints, Gilbert says. The staff also recommends small group training to people who have tired of beginner programs and want to advance their fitness.
The result of these efforts is that participation in this programming is growing, and revenue for small group has doubled, Gilbert says.
Mills recommends that operators charge for small group training—at the very least charge a booking fee. Microgyms that are based on small group or team training often charge dues ranging from $100 to $200 per month. And people are paying those higher fees as readily as others pay just $15 per month to belong to budget clubs, which shows that different people value exercise differently.
But small group training is adding more value to group exercise departments for many club operators.
"I think that the industry is starting to value group exercise more," Mills says. "Especially as the traditional clubs have had to compete with the budget clubs, they have started to see that group exercise is one of the important differentiators that the budgets do not have."
Operators who focus their capital on buying equipment are trying to compete with the budget clubs, Mills says.
"Unless you are prepared to put some of your economic focus on other things that create more motivation, that are more fun and social, more high stimulation, then you are really planting yourself in a corner," Mills says. "I think the industry has realized that."
Small group training is not always so small. Phillip Mills, CEO of Les Mills, says some small groups can be four to eight people, but for the Les Mills new Grit Series small group training program, groups can range up to 20 people. He prefers to call these groups team training rather than small group training. And he also prefers the larger team training to smaller groups of four to eight people.
"The more people you get in there, the lower the fee you can charge," Mills says. "Then, the lower the fee you charge, the more people can afford to do it."
The size of the group often depends on the space available. And Mills recommends creating a small group training area outside of the group exercise room.
"If you want to charge for something, it is difficult to charge for something in an area where you run things normally for free," he says.
Many club operators may be able to carve out 1,000 square feet somewhere for small group training, perhaps on the main gym floor. However, ideally, the space would be in a glassed off room where people can look in but any music you may play will not disturb the rest of the club, he says.