When times are tough, only the strong survive. The global economic crisis is about as tough as it gets, and already some fitness businesses are struggling — and failing — to stay alive.
New business ventures are being put on hold because entrepreneurs can’t get the credit to fund them. Clubs are facing increasing attrition rates because members can’t afford their dues. And there’s nothing you can do about it.
Or, is there?
According to a recent article in the New York Times, some clubs are finding ways to help their members through the economic hardships, and hopefully ensuring their own survival.
TELOS Fitness Center, Dallas, Texas, now waives applicable fees for rejoining the club for longtime members who have quit and wish to return. “I’ll put a note in their file and we’ll let them pick up their membership without any fees,” Clarisa Duran, sales and marketing director, told the Times.
What are you doing for your members to help ease the burden brought on by lost jobs, lack of available credit, and Wall Street turmoil?
7 comments:
The problem with this strategy is that lowering our prices (or fees) will not help us club owners stay in business. It is like telling a restaurant to serve more food for lower prices. It is not sustainable and is very naive.
We (most of us anyway) are already at razor thin margins, and this downturn is go to be 1-2+ years -not just a few months.
To survive the long haul we need to be very creative on how we can offer new type of services to cash-strapped clients, and not just charge less for what we do and call this a plan to survive.
I'm not offering up TELOS' strategy as a unilateral "plan to survive." This isn't a one-size-fits-all industry, and for some facilities — especially small, independent clubs — waiving fees would give members a brake at the expense of the company's survival.
Only individual club owners can know what works for their businesses. But I think it's worth knowing what other people in the industry are doing to stay afloat in choppy financial waters.
The best strategy to recession-proof any business is to innovate. Of course as the saying goes ‘the best time to fix the roof is when the sun is shining’ (i.e. innovation should be an ongoing process) but it’s too late for that now.
When external financial pressures, or perceived financial pressures, cause members (and prospective members) to question the value of existing offerings in the marketplace the challenge is to recreate your offerings in ways that add value to their experience.
I do agree with anonymous that there is only limited upside potential to cutting prices in the current economic climate.
My advice is to think 'add value' before cutting prices.
Interesting point. I do not believe the answer is to lower fees but to increase perceived value. There are many ways to add value to your members that may include spending more time with them, providing superior services that your competitors may not be willing to provide (be disruptive!). Helping each member to walk away after their work-out knowing and planning their return will turn into longevity.
I know of trainers who have 50% of their fee's taken by the clubs..in other words, the clubs profitability is marginalized on their trainers ability to provide one on one services. As a downturn hits, thats where your clients will save, so if your business plan is reliant on fee sharing with your trainers then you may have a larger issue to deal with.
Its all about value, just as Kym pointed out.
One word both Kym and Brett used is "perceived," and I can't help but wonder if that's the key to this whole discussion.
A member's actual bottom line may not even be at issue. As Kym said, members may cut back because of "perceived financial pressures." Even if a club's membership isn't badly affected by the flailing economy, profits may fall anyway.
And, as Brett pointed out, the actual value of a club's products and services isn't nearly as important as their perceived value.
So — how do clubs alter members' perception so they believe they're getting more for the same cost?
This is a completely different approach, but how about increase your monthly membership fee and for the added fee, offer assistance or coaching. There are plenty of personal trainers standing around waiting for someone to "hire" them. For some job security and membership retention imagine if the members of your club were actually using your equipment correctly and in a manner to get results! Coaching doesn't require a lot of attention, simply observing and making recommendations when a member is using a piece of equipment improperly.
If you are one of the clubs charging $19 per month, you would have to increase your fees to maybe $40-$60, but the club with the members getting results is going to win against the club that doesn't give a care if members get results!
Check out this new article about some fitness centers that are discounting their rates because of the economy:
http://www.delmarvanow.com/article/20081123/BUSINESS/811230339
One person interviewed says he believes his membership is not "discretionary spending." Instead, fitness is vital for his well-being. He says it costs about $2 a day for a membership, and it's worth it.
Hey — that's less than a latte! Get a caffeine buzz or invest in your health. Talk about increasing perceived value ...
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