Clubindustry

There are certain instances in a profession when you realize you are in a place where you belong, when you are at the right place at the right time. When I was a full-time sportswriter and I was covering a big game, I had that kind of feeling.

I had that feeling again on Wednesday after I first arrived at the Club Industry show and headed to Michael Scott Scudder’s session entitled “Growing Your Business in Tough Times—Recognizing Where You Are and What to Do.” These are trying economic times, and I went to find some answers in this session.

Scudder gave a grim picture of the club industry today. Consumer confidence is at a 20-year low, he says, and the recession we are in reminds him of the recession of the early 1990s, when the industry lost 9 percent of its clubs and 10 percent of its members.

Scudder rattled off some numbers based on his own personal survey of clubs. These aren’t IHRSA-like figures, so take them for what they’re worth, but they do come from a guy who’s been in the business for more than 30 years and cares deeply about the direction the industry is going.

This year, new membership sales are down 5 percent, cancellations and non-renewals are up 20 percent, and ancillary revenues from sources such as program sales and personal training are down 15 percent, Scudder says. Of those surveyed, 85 percent say they are getting fewer walk-ins and call-ins from advertising than ever before, and 60 percent are considering pricing incentives to boost business for the rest of the year.

“We’re not getting the number of members that we’ve been depending on,” says Scudder, who thinks the industry has a more than 40 percent attrition rate.

In other survey findings, Scudder says only one in three clubs say they are doing better this year than last year, 35 percent say they are doing about the same, 18 percent say they are doing worse and 12 percent say they are “not sure.” (Scudder has a problem with that last group, by the way.)

With the long recession ahead, Scudder predicts that a lot of clubs will go out of business, clubs in general will find it more difficult to borrow from banks, and non-profit projects will be put on hold. Scudder says there will be 5,000 fewer fitness facilities by 2009, and that will actually be good for the industry, since he believes the market is already saturated.

Scudder read a statistic in which every 9 seconds in the United States, someone turns 50, and that there will be 37 million people who will turn 50 in 10 years. Scudder says the industry is not doing a good job attracting and retaining this market.

There are some opportunities that can help all fitness facilities succeed during the recession. Rather than focus on membership sales, clubs should focus on member conservation. Methods to increase member referrals can be implemented and can reduce advertising costs. Scudder cited an IHRSA statistic that says 42 percent of a club’s revenue goes into payroll and payroll taxes. The solution? According to Scudder, clubs need to cut back on staff, whether they are sales people, people at the reception desk or group exercise instructors who have fewer than 10 people in their class.

Clubs also need to study their demographics and marketplace better, change the pricing and the programs in their clubs, adapt to the industry, re-position the business and seek niches, Scudder says. When it’s all said and done, it comes back to providing better customer service, or as Scudder puts it, “human service,” and that means shaking hands with every person who walks through the front door.

“It is time to wake up,” Scudder says. “The recession will wake you up.”

Derek Barton’s session titled “Key Strategies for Branding and Positioning Your Club” was one of the best sessions I’ve ever attended in a club industry trade show, and it’s not just because it included some funny commercials. I didn’t even have to look at my watch once during the session.

Barton worked at Gold’s Gym for 20 years before beginning his own advertising agency. Barton’s most eye-catching slides (besides the commercials) included logos of famous brands in all industries. The brands and their logos were instantly recognizable.

Barton was recently hired by Joe Cirulli and Gainesville Health and Fitness Centers in Florida to improve its logo. (This was not the only mention at the show of Joe Cirulli and his success, by the way.) Barton took out what looked like a coffin or a bathtub in the logo and played up the word “Gainesville” for a better look. After a before-and-after viewing, Gainesville’s new logo stood out better with other brands.

Barton says the industry is not doing its job to try to reach out to potential members through advertising. Barton showed a Budweiser yoga commercial in which two men in the class are enjoying watching the women in the class do their poses. The industry should produce a commercial like that, Barton says.

Barton’s presentation focused on brand positioning. Like many seminars I’ve attended, Starbucks was praised for its brand. Recalling what Starbucks founder Howard Schultz said in an interview, Barton said that Starbucks is selling theater, not just coffee. Barton showed a photo he took of people standing in line at a Starbucks, not unlike the line I saw at the Starbucks around the corner from the trade show.

“Have you seen a line outside health clubs?” Barton asked.

Barton also showed some examples of improvements he made at Gold’s Gyms, most of which had to do with putting the logo or old photos of the Gold’s Gym at Venice Beach on bare walls of the club.

Finally, Barton’s seven steps to successful branding are:

1. Know your direction.

2. Brands are like people (you either like them or you don’t).

3. Keep your promises (FedEx delivers overnight; Domino’s Pizza delivers in 30 minutes or less).

4. Define your brand’s personality.

5. Be true to yourself.

6. Commit to the relationship.

7. Make sure you have the four P’s: passion, personality, perception and persistence.

You have to love Casey Conrad when she stands in front of about 60 people in a seminar and says, “I’m a pretty blunt person.”

Conrad, one of our advisory board members, spared no expense when she gave a session on successful weight-loss programs for women. In her seminar, Conrad broke down the emotional and sociological aspects of the choices women make when they are dieting.

A lot of diets have a computer-based component in which women (and men) can chart their progress and food intake. Women, Conrad says, like to write things down in a journal, not sit in front of a computer and type in their results. (Men love computer programs, Conrad says.) Women do, however, love to use the Internet to look up information, Conrad adds.

Although Conrad praises Weight Watchers as the most successful diet program around, she cautions that it only measures the quantity of food eaten. A quality weight-loss program should measure the quantity and the quality of food eaten as well as the time at which the food was eaten. Two food groups that should be immediately eliminated when dieting are junk food and alcohol because they produce dead calories, Conrad says.

Calories, by the way, should never be discussed with women who want to lose weight, Conrad adds. Women are also keen on justification, she says. Clubs should make a weight-loss program affordable for women so that they can justify paying for it, Conrad says. (Men do not need help justifying their purchases, she says.)

Conrad says she’s not a fan of pre-packaged meals or meal replacements. In terms of preparing food for families, Conrad says women still do the task 99 percent of the time. Her math may be a little off, but the point is, Conrad thinks women do most of the food preparation in their families. With that in mind, women do not want to make a meal for their families and one for themselves, Conrad says. Regarding pre-packaged meals or meal replacements, women can’t serve them to their families, and they don’t learn what’s good or bad for them, she adds.

Lastly, Conrad says that eating the same thing over and over in a diet is not healthy. People love food, and a diet needs to have a variety of tasty options, she says.

We already have a Pro Shop department in our magazine, and we have a Product Beat e-newsletter that we send out before our shows. So what can we call this post about the vendors I met at the Club Industry show in Chicago? If we take the Pro from Pro Shop or Product and add the word Beat, we get Pro Beat! And that works, because we’re all professionals here.

So without further ado, here are some of the vendors I visited at the show, in chronological order:

Polar: The Polar booth looked a little like the jewelry section at a department store. Those weren’t just any watches Polar had on display. Rather, Polar was introducing its new line of training computers inside colorful watches that are without the use of a chest strap. The four models were the FA20 (suggested retail price: $119.95), FT 40 ($179.95), FT 60 ($239.95) and FT 80 ($349.95). The range of the models is from the average walker or jogger (FA20, which measures both the quantity and quality of your steps) to those on a more serious cardio and strength program (FT 80). My favorite part of the watch is the little “Polar man” inside the watch that indicates your activity. In an extreme workout, the Polar man is running really fast. If there’s no activity, the Polar man sits with his back against a wall. (How do they know me so well?) I also found out from Polar’s Jesse Harper that Polar is working with Dr. Kenneth Cooper, our Lifetime Achievement Award winner, on youth fitness education.

Paramount: Long known for its strength products, Paramount is getting into the cardio game. Last March at the IHRSA show, Paramount introduced its new line of treadmills. At Club Industry, Paramount introduced its line of elliptical machines. There’s a small LCD screen on the ellipticals in which you can choose the graphics you want displayed. The backgrounds are an outdoor track, farmland, hills and a desert. A club or a university can personalize the screen with their own logos for when the elliptical is not in use. Jim McIntyre of Paramount says the company has increased its new products by 30 percent since 2006. McIntyre also says that the industry as a whole is coming out with new designs of machines every five years now instead of every 10 years.

WaterRower: This is truly an international product. The salesman from WaterRower I talked to is from Great Britain, the PR people are from Canada and the product is made in the great state of Rhode Island. We did a story a while back in which I read that rowing, compared to other forms of exercise, uses all the muscles of the body. And, as WaterRower says, rowing works up to 84 percent of muscle mass and burns 1,000 calories per hour. This product was invented 20 years ago as a way to train indoors in the winter months for rowing competitions. There’s no need for oars here. You pull back with a handle connected to a cable, and the harder you push back with your feet, the more resistance you feel. (Believe me, I tried.) The WaterFlyWheel at the base of the non-electrical machine gives you that connection with the water. Prices range from $895 for the basic model to $1,795 for the higher-end model.

CheckFree: My talk with CheckFree at the show was not about software, although the company did recently introduce its CheckFree Compete program. Our talk focused on CheckFree’s sponsorship agreement with Karen Woodard-Chavez, one of our columnists, for Webinars and speaking engagements. The goal of these engagements, according to CheckFree’s Ron Poliseno, is to help the industry stay on its feet. Woodard-Chavez is planning to provide a “soft skills” education for club operators to help them increase and retain membership and to help operators find existing dollars from existing membership by selling additional services, such as personal training. Poliseno hopes Woodard reaches the 12,000 to 15,000 “at-risk” clubs, those with a member base of 1,000 to 5,000 members, in which a 10 percent hit to their bottom line could be detrimental to their business. Poliseno also says there may even be a two-day boot camp set up in the future about this topic. More information will come out later this year.

As part of the yearlong celebration of our magazine’s 25th anniversary, we gave away 25 prizes at our booth. The grand prize of a fantasy camp was sponsored by SportsArt Fitness. The winner of that prize was Eileen Kassower of Town Sports International in Boston.

Here is a list of the other prizes, sponsors and, of course, winners:

Digital camera binoculars, sponsored by Checkfree (now part of Fiserv) – John Marchetti, The Alaska Club

Baseball hat and T-shirt, sponsored by VersaClimber – John Bockrath, Downers Grove Fire Department

iPod Shuffle, sponsored by Sportsmith – Nikki Ladage, Gold’s Gym

Glacier softshell jacket, sponsored by Motus USA – Dwayne Miller, Bodies Defined

“Just Jump,” by Marjorie Geiser, California Based Publishing and Meg-Enterprises.com – David Liss, Eclipse Fitness Club

Fleece jacket from Smartwater – Jacqueline Jones, Memorial Park District

Tape measure and T-shirt, sponsored by Fitness Flooring – Cindy Kugler, Lifepointe by Bryan LGH

“Extreme Fat Smash Diet” by Ian K. Smith, MD (signed copy) – Karen Sullivan, Kansas City Country Club

Cooler, sponsored by Motus USA – Pam Hard, Cargill

Baseball hat and T-shirt, sponsored by VersaClimber – Tim Eagan, Fit Club

iPod Nano, sponsored by ABC Financial Services Inc. – Stan Wolniakowski, Innovative Health & Fitness

Polo, sponsored by Motus USA – Joseph Hunt, To Be Fit

Laptop bag with mouse pad, pen and calculator, sponsored by ASF International – Ellie Ulrich, Gold’s Gym

Urethane-coated gel bars, sponsored by Hampton Fitness Products – Kelly Petroni, XSport

Tape measure and T-shirt, sponsored by Fitness Flooring – Linda Butts, Midwest Physical Therapy

Two beach towels, sponsored by Motus USA – Lori Patterson, Boot Camp Challenge

T-shirt and baseball hat, sponsored by Expresso Fitness Corp. – Rob Stevens, Lakeshore Athletic Club

Sport Tek T-shirt, sponsored by Motus USA – Rod Benesh, Snap Fitness

Baseball hat and T-shirt, sponsored by VersaClimber – Brian Francis, Can-Fit-Pro

iPod Shuffle, sponsored by CSI Software – Thomas Krueger, Fitness Strategies

Water bottle and workout towel, sponsored by Expresso Fitness Corp. – Amanda Amadei, Cheetah Gym

Absolo home unit, sponsored by Absolo – Laurie Page, Bensenville District Park

Laptop bag with workout towel, sponsored by Life Fitness - Jeff Bissonnette, Anytime Fitness

Tape Measure and T-shirt, sponsored by Fitness Flooring – Virginia Abbott, Via Performance Systems

Congratulations to all the winners!

On Friday, I sat in on the session “Strengthening Your Business in a Weak Economy,” led by Amanda Harris, vice president of fitness and wellness at ACAC Fitness & Wellness Centers. She offered suggestions, mostly for personal training, about strategies to help clubs thrive during a tough economy.

Did you know that more millionaires were made per capita during the Great Depression than at a any other time in the history of the country? Harris pointed out this fact to show that even during tough times, there is opportunity—you just have to be positive and seek out those opportunities.

About 20 percent of your members have a very negative mindset about the economy. Another 60 percent of your members are concerned but are trying to muddle through. Both groups, however, are worried about what they might lose. The remaining 20 percent are positive and see opportunity in tough times. You need to have the same mindset as this last group, and you need to understand the mindset of the other 80 percent of your members so you know how to reassure them.

In the past, you told people what belonging to your club would add to their lives. However, now their focus is on not losing things, so you have to tell them what belonging to your club will help them keep –their health. During stressful times, health problems can arise, but exercise, as we all know, can help alleviate the stress and keep people healthy. You should be stressing this to people—that they can’t afford to have their health turn sour, so they need to ensure they spend a little money and time now to avoid major problems later.

It’s also more important now than ever to meet your customers’ needs, so they see the value of their memberships. That also means not selling people something that they do not need. You should refer your clients to other professionals when necessary rather than trying to take on something in which you do not have the expertise. You should reassess frequently with the client to ensure that you are providing value.

Harris pointed out some ways that personal trainers can increase their value without decreasing their price (she does not recommend cutting your price because it devalues what you offer). She suggests offering half-hour sessions, buddy sessions, small group training and large group programming (such as boot camps).

I mentioned in an earlier post that I’d attended some great sessions, and I can’t emphasize that enough. Today I was energized, inspired and learned so much.

Bright and early this morning I hit up a BodyPump class on the Club Studio floor, which was one heck of a (good!) way to start the day. No doubt I’ll be feeling that tomorrow. And then, grungy and all, I headed to Jasmine Jafferali’s session “Cutting Edge Nutrition for Your Clients,” and was blown away. I had worked with Jasmine previously, as she is a Step by Step writer, but I’d never heard her speak. She’s great! And she even gave out free healthy brownies. Talk about earning brownie points with me. (I couldn’t resist making that joke; corny as it is.)

She filled the group in about how to talk to your clients about nutrition and gave us the latest trends and research regarding artificial sweeteners, gluten, coconut oil, organic foods and genetically modified foods. It was pretty eye opening and after learning that the FDA only inspects 1 percent of all meat, it makes me think twice about what I’m putting in my mouth. Other fun facts included that one out of four women have a gluten allergic but rarely know it (gluten allergies can cause migraines, GI distress and depression), that leafy greens are the No. 1 cause of food-borne illness (second is turkey, then chicken, then red meat), that Splenda can be used to kill ants (ack!) and that coconut oil is good for you. Eye-opening stuff.

The next session I went to was all about retention. Titled “Retention Planning that Works” and led by Mark Miller, VP of Merritt Athletic Clubs, it was right in line with what the panel on the economy was advising: Focus on retention. It’s said to cost five to seven times more to attract and sign a new member than it is to keep a current one. The average length of a membership is 80 weeks, Miller said, but if club improve that amount of time, then they can add thousands to their bottom line. In fact, 52 percent of members who visit a club less than four times in the first month quit within the first year. Ouch.

Miller identified why people leave (fear of the equipment, fear of getting hurt, not fitting in, etc.) and explained Merritt’s system for keeping those people in the club. Through a detailed series of appointments with staff, follow-up calls and really working with the individual, Merritt has worked to keep its attrition rates low.

Miller shared six strategies for staff at a point of sale. They include having the new member make an appointment, introducing them to a fitness trainer, giving them something at their next visit (a T-shirt or results from an assessment), putting a time stamp on your coupons and making sure that members know what to expect. That last one includes calling them and making sure they know to bring a towel or water bottle to their workout or having members just confirm their attendance.

Again, echoing what the panelists said, all clubs must be built on staff members with good attitudes who are upbeat, caring and share the vision of the facility. Miller concluded the session with a quote from the FIA Retention Report that I think summed the importance of retention up pretty well:

“If the clubs with the lowest retention rates achieved the retention of the best club, they would more than double their income in 12 months.”

Now who doesn’t want to do that?!

During the past two days, I’ve made several booth visits.

On Thursday, I met with Keith White, director of global branding at Star Trac, to find out about the company’s new eSpinner bike. The eSpinner is a Spin bike for the cardio floor rather than the Spin room. Using the 15-inch touch screen, users are guided through an interactive Spinning program. White says that the technology is easy to navigate, and it did appear to me to be fairly easy. It’s a way to introduce people to spinning without them going into the spin room, and it’s a way for those who like Spin classes to get a workout in if the Spin class isn’t offered at an appropriate time for them.

Later, I visited the Life Fitness booth. The company is reintroducing its Life Fitness Academy, according to Kerri O’Brien, director of education for Life Fitness. Club owners who purchase Life Fitness equipment can train their staff about Life Fitness equipment through manuals and tests, online training and in-person training. I also spoke with Jack Hugh about the iPod connections and the virtual trainer option on the company’s cardio products. A nice feature for people who want to change up their workouts.

I then stopped by the True Fitness booth where Courtney Sorrells, product manager, told me about the company’s CS5.0 treadmill. It comes in three sizes with a range of options depending on the size and price point. The treadmill has a digital contact heart rate monitoring system and a Polar wireless telemetry system.

I also saw True’s CSX elliptical, which is a rear entry elliptical. It allows users to have a lower-body workout, an upper body workout or both at the same time. This morning during early morning workouts, I tried out the elliptical in a 30-minute class led by Chuck Howard, who has his own clubs in Phoenix, but who is also the “minister of motivation” at True Fitness. He gave me some new moves to try on my elliptical at my club.

Today, I stopped by the Matrix booth to see their new treadmills. Andrew Kolman, product manager, treadmills and entertainment, was kind enough to show me about. Matrix has a new line of treadmills – the T7xe, T7x and T5x. The treadmills offer an array of features, including compatibility with iPod on the T7xe and T7x and a 15-inch touch-screen LCD TV on the T7xe. All three models are equipped with advanced technology. Right now, the control panel reminds me of a car’s control panel. There are even “handles” that users can grip to control the level of the workout. Andrew was especially proud of how the products were designed after much input from 600 club owners, operators and fitness enthusiasts.

I then walked over to the Octane Fitness booth where I talked with Julie King, their PR person. She showed me the company’s seated elliptical, the xRide. Definitely a cross between a bike and elliptical. This option is for older adults, people who are rehabilitating, obese individuals or just someone who wants a little easier workout to mix up their exercise. Unfortunately, I ran out of time to see their new standing elliptical, the Pro370.

Today was the third day of CI 2008, and it didn’t disappoint. I really thought that nothing could top Dr. Cooper’s keynote yesterday (Pam blogged about that below, so be sure to check it out), but this afternoon’s panel session “Fitness Business at a Crossroad: How to Hold on in Today’s Economy and Prosper for the Future,” was insanely good. Moderated by former Lifetime Achievement award winner Rick Caro, the sessions addressed issues affecting club owners today, and, yes folks, they said the “R” word: recession. The panel consisted of health club giants: Jeff Klinger, CEO Anytime Fitness; Gale Landers, CEO, Fitness Formula; Carl Liebert, CEO 24 Hour Fitness; and Scott Chovanec, president, Scott Chovanec and Associates.

To start the session off, Caro asked the panel to describe how their clubs were affected by the weakening economy and what they were doing to counteract it. Liebert started things off by saying that it was actually refreshing to hear people admit that the country was in a recession and that his 400+ 24 Hour Fitness locations were hoping to take advantage of the situation as much as they could by really focusing on member needs.

“Get out and talk to the people who are paying your bills,” Liebert said. “Talk to your members.”

Chovanec said that he was focused on retention as well, noting that it’s five to seven times more expensive to attract new members than keep current ones. Klinger said that because he has smaller franchise clubs that they hadn’t as dramatically felt the economy slowing, but that he was focused on all Anytime Fitness locations improving their club culture. He also hoped that the bailout on Wall Street would help shore up the ability to expand business. Landers said that attrition at Fitness Formula was up slightly but that the club company created a new member program in response to help with retention.

Focusing on retention and maintaining good, quality service was a theme heard repeatedly during the session, which later was open to questions from the audience. I was particularly struck by how solid the attendee’s questions where. From picking Liebert’s brain about how the fitness industry differs from Fortune 500 companies (Liebert was previously the CEO at Home Depot and said that although management may not be as strong as in some industries, the passion for helping people was unparalleled) and ways to reduce energy expenditures in the face of increased prices (turn the lights down and don’t be afraid to bargain with your utility companies), you could obviously tell how important this issue was to people and what a great chance it was to pick these top dog’s brains.

Over and over again, the panelists brought up the importance of a quality staff and quality programming, particularly for new members who are deconditioned and may be intimidated by the club. In addition, group exercise was said to be a fantastic retention tool that creates invaluable member-to-member relationships.

“Can you give them an instant experience?” Landers said. “As an industry, we have failed sometimes in giving a high-quality experience. We must use our current members to grow our current business through word of mouth.”

For more on this issue, be sure to check out the magazine in the coming months. The editors will be covering this issue and bringing you the latest on how clubs are enduring these tough times.

Today, I had the opportunity to meet this year’s Best of the Best winners before they were presented with their awards by Editor Pam Kufahl. It was truly a pleasure to meet the winners, who included: the Wyckoff Family YMCA, best behavior modification program, for its special populations program Personal Partners; Minton’s Sportsplex, best children’s program, for its after-school program; and Big Vanilla Athletic Club, best new member integration program, for its 90-day weight-loss challenge. The fourth winner, Bodyworks Family Sports Centers, best community or nonmember program, for its party programming, couldn’t make it unfortunately, but it was their second year as a winner, which is quite the accomplishment. A big congrats to all!

If you’d like to read more about the winners and their programs, go to: http://fitnessbusinesspro.com/forprofits/feature_presentations_best/.