New smartphone apps can enable health club operators to grow their business and deliver a variety of services that will engage members and make their club experiences more convenient and enjoyable Photo by Thinkstock

New smartphone apps can enable health club operators to grow their business and deliver a variety of services that will engage members and make their club experiences more convenient and enjoyable. Photo by Thinkstock.

Technology Will Revolutionize Member-Club Relationships for Better or for Worse

The use of new technology and smartphone apps is impacting health clubs and how operators can adapt these new tools in new ways for the benefit and convenience of members. These business model innovations will help grow the marketplace of health and fitness substantially in the years ahead.

Change is happening faster than many realize. This is true for health clubs and a long list of other industries. In his epic work, "The Singularity Is Near, When Humans Transcend Biology," author and futurist Ray Kurzweil explains, "Most long-range forecasts of what is technically feasible in future time periods dramatically underestimate the power of future developments because they are based on what I call the 'intuitive linear' view of history rather than the 'historical exponential' view."

Kurzweil is right. The rate of change resulting from advancing technologies is revolutionizing many industries already, but it's just getting started. When we evaluate how technology might impact the health club-member relationship, we must not do so using present business models. The analysis should entail thinking of a complete revolution in how health club operators can adopt new tools in new ways, which will make members happy and thus grow the marketplace of health and fitness substantially in the years ahead via business model innovations.

Nowhere is this more apparent than with smartphones, the apps people are increasingly using on them and how brands are taking advantage of this trend. Consider this: In the United States, as in many other mature developed markets, smartphone adoption is exceeding 70 percent of the adult population. In the United States alone, more than 80 percent of millennials from 18 years old to 34 years old use Internet-connected smartphones, and they spend more than 85 percent of their time using apps on those phones. That is why Starbucks innovated by using its app and mobile payment system to drive mobile revenue from $300 million in 2012 to $1.5 billion in 2014. More than 15 percent of Starbucks' revenues are now generated by mobile transactions via smartphones. Convenience and the ability to do a variety of things to enhance service and engage customers in new ways are helping the Starbucks' mobile strategy work. This is the type of business model innovation that leads to growing the market.

Health club operators and fitness service providers are no exception when it comes to these sorts of innovations. Consider the ClassPass phenomenon. The ClassPass app enables convenient unlimited booking of classes at participating studios via smartphone devices at a rate of between $79 and $99 per month. The company is experiencing rapid growth, and its founder Payal Kadakia, an MIT engineer and former Bain and Co. consultant, has secured more than $50 million in venture funding to grow the concept. Many other apps that deliver a variety of services and new ways of engaging members for fitness and health club brands are quickly emerging. Just like Starbucks and ClassPass, a new era of tools and business model innovations cross my desk almost every day.

The implications of these and other technologies are quite profound. We've migrated from the first wave of simple mobile apps only a few years ago to the third wave of mobile apps where GPS, big data, sensors and well-designed mobile UX will create new ways of doing things for the customer and evolve how health club brands can engage and serve their members. Services such as Uber, Starbucks' mobile app and ClassPass are just the beginning. The Ritz Carlton, for example, is experimenting with app functionality that will enable you to avoid checking in altogether by using your smartphone. Think of the possibilities to improve service and assist members in a variety of ways that will enhance retention and broaden the market through convenience and new delivery methods.

It's important for health club operators and fitness professionals to get to work evaluating their business models and preparing for the opportunities that are emerging through technology because there is no slowing this technological juggernaut. Technology is revolutionizing the member-club experience. For those who see it, the opportunities are better; for those who don't, it is probably going to be worse.

So what do you think? Can and will technology revolutionize the member and club relationship? Should fitness businesses work on re-engineering their business models given the vast amount of technological change that is happening? Share your thoughts in the comment section below, and I will respond.

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