A few years ago, John McCarthy, the former executive director of the International Health, Racquet and Sportsclub Association (IHRSA), wrote an article entitled “What Do You Wish to Be Famous For?” McCarthy was not posing the question on a personal level, but addressing us as leaders of our respective businesses.
I'd like to rephrase the question and ask every club owner: What do you want your club to be known for — by your staff, your members and your community? Now more than ever, it's apparent how fundamental and crucial this question is, and how brilliantly it focuses attention on what's important. Based on the latest report from IHRSA, the industry had 45.3 million members in 29,750 health clubs in 2009. In most major market areas, every club has 10 to 20 competitors within its primary trading area. This intensification of competition, coupled with the roller coaster economy, begs for an answer to the question: What do you want your club to be known for?
Many clubs suffer from an identity crisis. Their operators don't know how to differentiate their clubs, and they don't know who their customers are. If you want your club to hold the leadership position in your market, you must invest in and strategically differentiate your club. It's not enough to appear to be different — your club must be different. Those who don't understand the fundamentals of your brand would have you believe that image is everything. In fact, image is only skin deep.
Despite that, people will develop their own perception of your club based on your image, so you need to decide what your club is, what demographics to go after, what systems you need in place and then own that part of the market. Lowering your prices to compete with other low-priced clubs is not truly becoming a low-price model until you lower your expenses and decide who your market really is. You must prevail within your definable market space.
The president of IBM Italy once said in a speech that the battleground in business has shifted from winning on superior products to winning on superior service to winning by providing a superior experience. The same principle is true for health clubs. It comes down to which club will provide its members with the best experience. If the experience you provide your members with is better, richer and warmer, and more hospitable, engaging, enjoyable and valuable than that provided by your competitors, the odds of victory are solidly in your favor. This is the war that needs to be won.
Quality is the No. 1 reason people will support and be loyal to your brand. In our industry, it is the quality of the relationship and the experience that the member has with the club and its staff that affects his or her loyalty.
Maybe it's time to get back to basics. In the scramble to innovate faster, jump on the latest social media-marketing craze, launch a new advertising campaign, and rebrand, revitalize and repackage, maybe we're all missing the point.
Getting consumer feedback and developing a clear point of differentiation are vital to providing a great experience. Time, capital and human resources spent on these exercises, if done thoroughly, are never wasted. It's the best bang for your marketing buck.
From your brand perspective, your point of differentiation is the catalyst that your company needs to reduce competition and rejuvenate your sales staff. It is important to determine how to develop your point of differentiation and explore examples of how it can be rolled out in your marketplace. To do this, form a team of key managers, front-line staff, members and other business owners to discover the brand from their unique perspectives. Each one brings a fresh dynamic to the discovery. The solution to differentiation is typically right in front of you, but we're so used to viewing our clubs from a single perspective that it's often easy to ignore key processes or developments that truly set us apart. Our goal is to draw out these experiences and determine as a team their potential as a profit-generating advantage.
Eddie Tock is a partner with REX Roundtables, a global organization that runs mastermind roundtables for chief executives in the club industry. He is a consultant who has worked with more than 1,000 clubs since 1983.