Last year, Town Sports International (TSI), New York, began to shift from its proprietary club management software system in favor of Motionsoft’s MoSo system for six of its more than 160 clubs. By the end of this September, TSI will have rolled out Motionsoft’s MoSo program in 90 percent of its clubs, with the completion of the rollout scheduled by the end of the year.
TSI clubs are in the process of using Motionsoft’s MoSo MRM software for member relationship and facility management, myClub online member portal and scheduling, and the data warehouse advanced reporting tool. Registration and booking are key elements for TSI, CEO Robert Giardina said in an earnings call with analysts last month. The initial goal of the program, he added, is to help TSI’s ancillary business, and in particular, personal training, by making scheduling easier.
“Consumers, both members and nonmembers, will be able to go to our website, select a program, come in when they want to come in, book their trainer, so it will have a nice impact on our business overall,” Giardina said on the call. “To be able to offer programs to both members and nonmembers, we had to move in this direction, and it allows our trainers to have more visibility in terms of their scheduling and what they’re able to do as well. We see a lot of benefits coming out.”
TSI’s move away from proprietary software to an off-the-shelf system may not be the norm for such a large club company, but Jason Weston, vice president of sales and business development at ASF International, Highlands Ranch, CO, says it might make sense for regional players.
“You’ve got large chains that are well capitalized through private investment and choose to [develop their own software],” Weston says, “but if you’re talking about large independents, large regional chains where maybe you’ve got 10, 15, 20 clubs, it’s not cost-effective for them to develop their own software. I could change my own oil if I wanted to, but my time is more valuable than that, and it’s more cost-effective for me to pay an expert to do it.”
Al Noshirvani, CEO of Motionsoft, Rockville, MD, says that the relationship has been positive with TSI, which operates New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs and Washington Sports Clubs. Noshirvani compares the software capabilities that TSI now has through his company to that of a cellular phone company that offers bundles of its services.
“Today, when you are buying a membership contract, you’re basically paying someone to have the privilege of walking in the door,” Noshirvani says. “What we’ve allowed you to do is bundle other services into that fee to treat things like personal training and non-dues revenue items as part of a bundle that incorporates not just the access items that you have but also incorporates those non-dues services which everyone knows contributes to the efficacy of retention. You build value in the sale, versus going in and saying, ‘Hey, pay me 20 bucks and walk in the door.’ The idea here is to build bundles that build relationships.”
As part of the transition to Motionsoft, TSI club leaders complete two days of training, followed by a week of integrating the software into the club. TSI Chief Financial Officer Dan Gallagher told analysts on the call last month that TSI is looking forward to having its managers complete the training.
“What they’ll have is a much more user-friendly system,” Gallagher said on the call. “Our system that we’re replacing is not very intuitive, is actually a little clumsy, and you have to be here a little while to understand how to use it. Our new system is much more intuitive, and it uses the very latest technology as opposed to very old technology. So it’s going to allow us to do a lot more things using the platform going forward.”
Sidebar: Outsourcing of Billing and Collections Frees Up Larger Club Operators for Other Business Functions
Some executives of payment processing companies who also provide software are seeing a trend in larger health club companies partnering with vendors not only for their club management software but also for their billing and collections services. Outsourcing this function helps improve business operations, making it more smooth and efficient.
“The most successful health club companies focus on three things: sales growth, profitability and member experience,” says Steve Ayers, chief revenue officer for ABC Financial, Sherwood, AR. “Freeing clubs from the burden of collections lets them invest the time they save into improving their business and profitability.”
Citing industry billing statistics, Ayers says 10 percent to 15 percent of members will encounter some sort of payment issue at their club. At a club in which 375 of 3,000 members (12.5 percent) encounter a billing issue, that club would spend $240 over the course of more than 100 hours resolving those issues, he says.
“That’s almost three weeks each month spent resolving billing issues,” Ayers says. “Three weeks you could spend building your business or enjoying life. You could hire an individual to take care of back end contracts, but you would then have payroll expense and management challenges. Outsource these tasks and avoid the headaches of member management.”