The “New Rules” For Gyms

by  Blair McHaney, Gold’s Gym Wenatchee
VP of Strategic Initiatives for Medallia, Inc. 

 

Why did Apple’s market valuation just hit a record high?  Apple is now the single most valuable company ever to exist.  It is worth 54% more than 2nd place, Exxon-Mobile.

Read “The New Rules of Retail.”  It should be an eye-opener for everyone in the fitness business and explain some of the reasons Apple and others have achieved the position they have.  The New Rules thesis is that there are 3 main operating principles for success in today’s retail environment: 1- neurological connectivity (deliver an experience, not just a sale): 2-pre-emptive distribution: 3-value-chain control. 

Delivering an experience requires that you understand how someone experiences your brand from end-to-end.  You must measure the current experience and find ways to improve it.   You must listen continuously to your members, and make adjustments in real-time. 

Pre-emptive distribution requires that you understand what it is you are distributing (Memberships? Access? Plant and equipment?), then you go put it in front of people when and where they want it. 

This is interesting.  I bet most of us start thinking about the location of our gym(s) as our distribution.  I agree this is important but the answer for increasing distribution can’t just be “go open more gyms.”  I think the answer is in the distribution of help and content that is valuable and relevant for current and future customers.  I also believe this is a fundamental flaw in our industry and a huge opportunity – the belief that what people want from us is a membership.  Most people want help.  There is a giant opportunity through social media to deliver help (the pre-emptive distribution of help) well before people have decided to join a gym. We need to own the pre-emptive distribution of “help” in our communities. 

Inside our gyms what would the “pre-emptive distribution of help” look like?  That is probably a great question for leading a staff exercise!

Value chain control means you control the entire experience!  You hire, on-board and train your people so they deliver a fabulous experience.  You don’t outsource your personal training!! You also control all the ways to make your gym environment a “community.”  Peter Block said – “we are a community each time we find a place where we belong.”  If your trainers, members and instructors are all walking around the gym with straight faces and not interacting, then your members have “joined” but they will not feel like they “belong.”  It is our responsibility to make everyone feel like they belong and that means getting involved out on the exercise floor, doing social events, and making introductions between members.  We can also take responsibility for making our gyms communities by designing our spaces to allow for member-to-member interaction.       

 How to tell if you are practicing New Rules Principle #1:

  1. You collect member feedback (voice of customer) and adjust your operation continuously based on that feedback.
  2. Member experience (MX) is “baked-in” to strategy, vision and core values.
  3. You create accountability for the member experience by measuring it and managing to constantly improve it.

 How to tell if you are practicing New Rules Principle #2:

  1. You have a distribution of classes and services that are based on what your customers’ want – not what you feel like delivering.
  2. You have content that is relevant and valuable for current and FUTURE CUSTOMERS and you deliver it for free (think social media here). 
  3. You are located near your core customer. 

 How to tell if you are practicing New Rules Principle #3:

  1. You do NOT outsource your Personal Training.
  2. Your trainers and instructors are completely trained in MX and deliver it consistently every single day. 
  3. You are stubborn about how you hire and onboard your people.

My hope is that the fitness industry adopts a new way of thinking about member experience, a language to talk about member experience, and some common metrics for measuring and comparing the member experience.

So I guess someone has to go first to start the conversation. Here goes… As of this morning, the main trailing 90-day Member Experience Metrics (MXM) for our clubs are:

  • Net Promoter Score – 82 East Wenatchee, 80 Wenatchee
  • Staff friendliness score – 9.4 East Wenatchee, 9.5 Wenatchee
  • Personal Training Staff Friendliness – 9.3 East Wenatchee, 9.5 Wenatchee
  • Gym Cleanliness score – 9.2 East Wenatchee, 8.8 Wenatchee
  • Equipment condition – 9.0 East Wenatchee, 8.8 Wenatchee 

What does all this mean?  It means these are very high scores and it should reduce our attrition, increase referrals, increase the spend per member, and increase the likelihood that someone will rejoin once they cancel.

Our trailing 12-month attrition is 26.8%. That’s a real number.  If you want to know how we calculate that, just ask. We lose 2.23% of our members on the average each month.  52% of the people that join our gyms have been our members before.    

For those who want to differentiate, you must know and manage to this information.

Blair is the VP of Strategic Initiatives for Medallia, Inc. Medallia is a brilliant software company in Palo Alto California specializing in Customer Experience Management. They help many of the world’s greatest brands deliver on their customer experience promises.

Blair is also President of Confluence Fitness Partners, Inc. They operate two Gold’s Gyms in Central Washington – Gold’s Gyms of Wenatchee Valley.  He is the past President of the Gold’s Gym Franchisee Association and their primary educator on Customer Experience Management. He has been in the fitness business for 30 years. 

Vision
The GGFA is heard and respected as the unified voice of all franchisees. We are involved in all decisions that affect our brand and the franchisees. It is our goal to secure Gold’s Gym as the most profitable franchising opportunity in the fitness industry and the number one fitness brand in the world.

Mission
We serve as advocates for all franchisees to help them maximize the profitability and

stability of their businesses.

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About GGFA

The Gold's Gym Franchisee Association is the independent voice of the Gold's Gym franchisees.
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One Response to The “New Rules” For Gyms

  1. Great clarity on how to focus on the simple things we can do to improve our business.

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