A New Idea

I’ve never liked people who criticize someone without offering their own ideas for a solution. It’s counterproductive and, on some level, cowardly.

Last week I said believe Planet Fitness’ low-priced membership strategy may cause long-term harm to the industry. Whether I agree with it or not, it is a valid attempt by a successful business to find a solution for a problem every club is facing: getting more customers in an economic crisis. And, in the spirit of my statement above, I would be remiss if I didn’t offer another possible solution for clubs looking to lower prices without devaluing their services.

Here is my idea:*

Forget the “Pay as You Go” membership model. What about “Pay as you DON’T Go”?

Clubs want to build loyalty, right? You want your clients to build fitness into their routines, value the services they receive at the club, want to spend time there. Why not reward them for doing exactly that?

Say each club visit is worth $5. You establish an “ideal” visit rate of three times per week, averaging out to $60 per month. So, the member’s base fee is $15 per week. If they go once a week, knock $5 off their dues. Twice a week, knock off $10. Three times per week, and that week is free. Your members are saving money by working out at your club.

And while these sensible members are at your club, sell, sell, sell. Sell personal training sessions, sell smoothies, sell weight gloves, sell private Pilates lessons. Sell the heck out of everything you’ve got without being too aggressive or annoying.

If you employ this model, you’re obviously taking a risk. What if members do exactly what you want them to and come to the club like clockwork? Perhaps you could establish a base fee, and the $5 per visit is on top of that. What if members stop by on their way to the grocery store, swipe their card at the front desk and count it as a workout? Perhaps you could require members to swipe in and swipe out, with a minimum visit length of 20 minutes. Problems will pop up, but so will solutions.

Now’s your chance to tell me why you think this idea won’t work — or why it will. The comments are open.

*Whether you love it or hate it, I promise this is my own idea. I thought of it at my dining room table while nursing an epic Easter head cold. However, if another club has already come up with a similar idea, please let us know in the comments section.

Surviving the Economy

Every business today has been affected by the economic downturn. I doubt any fitness facility has been immune to members who have had to either put their memberships on hold or terminate them completely due to layoffs, pay cuts, etc. The question, then, is what is the right thing for the fitness industry to do to not only help their customers, but to also reduce their attrition rates?

Several solutions are being offered for how fitness facility operators are dealing with customers who are in a pinch. But, all of these solutions deal with the dreaded “discounting.” The notion to discount our products and services has been widely discouraged over the years, namely because, by discounting, we’re sending a message that our product is not worth what we’re asking. But, is that really relevant in today’s economic climate?

For many facilities, apparently not. According to an article published last week in The New York Times titled Staying Healthy in a Sick Economy, the author notes that consumers are especially in need of a healthy outlet during this stressful period. So, to help these consumers and, of course, to keep them on the rosters, fitness center operators are willing to bargain. A couple of examples include not charging members who quit a fee to rejoin when they’re able, and offering shorter, cheaper and shared training options. (See last week’s related blog, Survival of the Fittest.)

The issue is whether the fitness industry can portray itself as the savior by tightening its belt to serve the public, and then reemerge when the economy strengthens as a product to be valued, returning to previous pricing strategies.

Maybe, maybe not. It depends on how many low-priced competitors decide to pounce on the market to lure cash-strapped customers into their facilities and away from the higher-priced ones. Look, for example, at a new line of fitness facilities named MiFit in the United Kingdom. Recognizing that people are struggling to pay the dues at most fitness centers, their new “low-cost fitness concept” provides memberships available only online at a rate of 9.95 pounds per month. According to the managing director of the corporation, MiFit fills “a gap in the market by providing premium fitness technology at a low cost.”

I guess only time will tell how the economy will affect our industry long-term. For now, facility operators will just have to do what they believe is necessary — for the good of their members and their fitness centers.

Survival of the Fittest

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?

Do You Discount?

Blue Cross and Blue Shield of Minnesota recently conducted a study that revealed two things: Your facility’s convenience/proximity is important to prospective members, and discount programs fuel memberships.

Check out the article for yourself. It’s OK – I’ll wait. … You’re back? Good. This discount program stuff was news to me, but some facilities are apparently already knee-deep in discounts, like the Southwest Area YMCA, Eagan, Minn. Executive director Gussie Monks says, “We have seen the discount program as a huge incentive driving people to join and work out more, with the support of their jobs.”

The statement is interesting, as is the study, because it doesn’t make much of what is likely a big deal to you: Unless you want to eat the cost yourself, discount programs require the support of a member’s employer.

It sounds like a good deal for the employer. Employees who used a fitness center at least eight times a month for at least nine months throughout the study year were healthier than non-participants. Their claim costs were 17.8 percent lower (after adjusting for health status), emergency room visit rates were 38.7 percent lower and hospital admission rates were 41.4 percent lower.

But, the discount program was also a boon for the facilities. Part of the study involved a survey of Blue Cross’ 4,000-plus employees; 43 percent of responders who said they use the discount program also said they joined a fitness facility because of the discount.

Do you have relationships with local employers to offer discount programs? Has it helped your business? I suspect there is more to this arrangement than meets the eye, but it sure looks good on paper.

Freedom of Religion

What's that I hear? Oh. It's another industry expert blathering on about how retention is so important, how keeping members instead of chasing after new ones is the key to success.

Please.

Does anyone really believe that? And if they don't, can you blame them?

I blame mixed messages. One minute retention is the be-all and end-all, and the next we hear tales about the 86% of people we're failing to attract. Which is it? Are we supposed to be satisfied with who we've got and work to keep them happy, or keep grabbing for that brass ring (which, I hear, is actually 86% gold)?

Maybe there is no right answer. Maybe this issue is kind of like religion. And, being that this is America, clubs are blessed with freedom of religion.

So, what do you believe? Are you a member of the Church of Retention? Or do you worship the Lord of the 86%?

Maybe the bigger question is: If we all end up in the same place ... does it matter?