Beating the Competition the Smart Way?

Competition is good for business, right? That’s what most businesses will tell you. Albertson’s wants Stater Bros. and Ralphs to open up across the street to make the area a supermarket hub. Jack-in-the-Box wants McDonald’s and Carl’s Jr. to open up next to it to create a fast food alley. So why, then, is it that fitness facility owners don’t seem to view competition in the same vein?

Recently, Mark McPeek, owner of the Bay Area Athletic Club, Coos Bay, Ore., filed a suit against Southwestern Oregon Community College, which opened a $7 million fitness center in October. The suit alleges that the college is using the school’s non-profit status to gain an unfair advantage over private clubs in the area. The college charges $10 less per month for its membership than Bay Area Athletic Club.

This profit vs. non-profit battle has been raging for decades. But, is it necessary? I certainly won’t dispute the argument that one facility has to pay its bills while the other’s bills are footed by the public. This discussion isn’t about the right or wrong of that issue. What I would like to point out is, this issue continues to be battled in courts, with no apparent long-term resolution. So, rather than the continuing legal battles, perhaps fitness facilities that feel most threatened by this competition need to focus on how they can survive on their own merits, despite the profit/non-profit model.

I would suggest that these facilities would fare quite well against non-profits if they honed in on something that made them stand apart, thus competing based on expertise, programming, service, etc., rather than mere dues rates. We’ve done enough reporting on non-profit facility programs and services in Fitness Management to know that they often can’t compete against facilities that offer first-rate service and programming. Sorry, non-profits! No offense, but the for-profits that make an effort to stand apart from the competition seem to do a better job.

Near my home, there is a Stater Bros., Albertson’s and Vons grocery store — all within 1 mile of each other. I’ve tried them all, and I’m loyal to Vons. Why? Because I can’t visit the grocery store without being asked by employees, at least two or three times, if I’m finding everything I need. I can’t go to the meat counter without an employee stocking the shelves and telling me what’s on special that day. Sometimes, the weekly sales ads that come in the mail tell me that Albertson’s has a better deal on bagged salads that week. Well, the way I see it, the deal I would have gotten on the salad is probably going to be a wash after the deal I get on service and other items on sale at Vons.

Want to bet that most fitness consumers wouldn’t feel the same way about a $10 difference in dues, if there were a real difference in the facilities?