A friend of mine is a professional sports coach and was commenting how often he sees poor “business” practices in the sports/fitness world. While I do work out regularly, I had never stopped to evaluate this particular industry before.
In the U.S., health and fitness make up a $21 Billion industry. This seems to contradict our growing obesity epidemic; I think it has more to do with the growing gap between upper and lower incomes. It costs time and money to be healthy, to buy and prepare healthy food choices, to exercise or be part of an organized sports team; the “good” propaganda of the importance of health tends not to mention this. Many people are turning to non-traditional sports/fitness venues as well as as online classes, video series (P90X anyone?) and various self-guided apps to cut the costs of full-service facilities. As much as I hate to admit it, the middle class is indeed shrinking. Fewer and fewer employees fall into that income bracket; assuming the trend continues, it will eventually be predominately business owners with small to medium sized businesses (often stressed, unhealthy owners who are so busy working in their business that they cannot reach the upper income brackets… but that’s another blog for coaching.)
Fitness and sports are part of our status symbol, our “keeping up with the Joneses” concept. I don’t mean that in a disparaging way. When people choose to allocate their time and money to physical pursuits that will help them lead a healthier, more productive, and longer life, I am all for it! But I don’t see a whole lot of full-service gyms, tennis and recreation centers and golf courses acknowledging that EVERYONE IS NOT YOUR IDEAL CLIENT!
- Upper income earners KNOW their time is more valuable than their money.
- They didn’t get to that level by employing slackers – they can spot one a mile away. Ergo, they can tell pretty quickly if you employ mediocre trainers/coaches or top-of-the-line ones.
- They like a la carte services and being catered to. If all you’re focused on is the monthly membership fee, you are losing thousands each month in “up-selling” opportunities, the kind that make both you and your team money.
Maybe you WANT to service everybody, so you decided to put your price point (your monthly membership fee) low enough that almost anyone with a decent job can be a member. You guarantee yourself 2 problems: 1) Crowding – which leads to dissatisfied clients. Those who can afford to leave will go someplace else. 2)As those who can afford to leave do so, the loss is both monthly and a la carte (i.e., private lessons, training time, perhaps classes, and equipment sales) revenue. Other industries would tell you that you are now catering to “bottom feeders;” I hate that term because it sounds degrading, but it means all of your remaining members are only able to/going to spend the minimum amount they can to still be a member. With current membership drop-out rates at around 40% (and I expect it will go higher as the income disparity increases and less expensive options become more and more available), this strategy requires a constant influx of new memberships, acquisition marketing (the most expensive kind btw), and extra work to sustain operating expenses- you get to work a lot harder, not smarter…
Let me give you an example of what I am talking about from my personal experience.
The “EVERYBODY” option – My local YMCA (being a YMCA and wanting to serve everybody), cannot hire top-of-the-line trainers because they would have to charge top-of-the-line prices for personal training time, as well as pay the trainers much more for their time on the floor. In fact, the average hourly wage on the floor for trainers is $10/hr. It’s no surprise that they rarely keep good ones for more than a year. The workout room is often over-crowded; I have to time my workouts to avoid the crowds and be able to get on the equipment, or plan to use half my time waiting. Equipment is often in need of repair. At least 1 shower in the ladies locker room is always out of order and the showers in the family locker room are even more neglected. I can afford a membership elsewhere. The ONLY reasons I am still a member are because I have a flexible schedule and can avoid the crowds, I never use the locker rooms, and there are no comparable facilities available in my area.
The IDEAL CLIENTELE option: In June 2012 I began working with a private trainer recommended to me by another business owner. He came to my home 3 days a week for an hour. I could have hired several YMCA trainers for what I paid this one. But he was worth every penny. Why? His knowledge was off the charts; his training techniques were excellent; he was never late, never sick, never missed a session; and when he showed up he was more prepared than I was. Everything about this guy exuded that he LOVED what he did and that he was very good at it. Without being arrogant, he was confident that he could get me to the level I wanted to attain and wanted to. He worked with the equipment I had or used body-weight based movements (i.e., equipment wasn’t even part of the price and I didn’t care!) I achieved almost every fitness goal I had set with him (I still can’t do a pull-up unassisted, which drives me nuts, but I keep trying). I was so happy with the experience that I extended the contract 4 times. Today I have an ongoing fitness consulting contract with him where we meet once a week to review my progress, discuss changes to my routine, and provide accountability. His “gross sales” per month during my full training contract were equivalent to 14 memberships at the YMCA… Remember that whole “work smarter, not harder” idea?
This experience can be reproduced by any tennis club, gym, yoga studio, etc., if you are willing to cater to your ideal client, and not everybody… Start with asking your higher end members what they want to see change. Better trainers/coaches? More private lesson times available? Higher level group programs? Start “upselling” what they want to buy anyway, and focus marketing on acquiring more of these clients and retaining the ones you have.