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A Healthy Bottom Line

Go corporate with a fitness program geared toward the work force.

Today's corporate environment is, more than ever, a fertile breeding ground for prospects. Whether a company has five employees or 5,000, it's a sales opportunity waiting to happen. The right combination of research, tenacity and just a touch of math can help you win over local businesses eager to promote a healthy lifestyle among their employees.

"There's a new breed of company out there," offers Darren Hodgdon, president and CEO of Chicago-based LifeStart Wellness Network, a management and consulting firm providing development services for on-site fitness centers, as well as health promotion and wellness services for corporations. "These are high-tech companies owned by young, entrepreneurial types of management. They want a casual work environment, and they're always keen on new types of benefits."

Indeed, these companies require a benefit like fitness because of the demands they place on employees. Many Internet start-ups, for instance, require long work hours for smaller staffs, which can induce a great deal of stress. Can there be a more appropriate candidate for a regular workout routine? "They're recognizing that more and more people are participating in fitness and making it a part of their daily routine," Hodgdon says. "They see how important it is for their employees to balance work and life issues, and fitness definitely falls into the latter category."

The Convenience Factor
In addition to balance, today's employees crave convenience. "People are busier than ever," notes Hodgdon. "Your main competitors are not just other fitness centers. Your main competitor is time."

If you want to attract the corporate market, you have to structure your programs accordingly. For example, you may need to trim your group classes down from an hour to 40 or 45 minutes. Why? Corporate members who come in for a class during their lunch hours will need that extra 15 minutes to shower and get back to their offices. Furthermore, by cutting your classes, early-morning exercisers can get an extra 15 minutes of sleep - something they'll appreciate. As for the after-work people, they'll be less inclined to skip a workout if they can get home 15 minutes earlier to live their lives.

Convenience shouldn't stop in the aerobics room. The availability of cardio and strength equipment is a critical factor among the time-impoverished corporate set. "People want to be in and out; they don't want to have to wait in line for treadmills," says Hodgdon.

This doesn't necessarily mean you have to break the bank and go on a shopping spree for new equipment. If a corporate member complains that he can't get on a treadmill, maybe it's time to introduce him to ellipticals.

The Corporate Pitch
Once you've got all the right equipment and services in place, it's time to sell it to corporations. But beware of some common faux pas in courting corporate clients.

"One of the biggest pitfalls occurs when clubs try to do too many things anonymously over the phone and not setting up face-to-face meetings," says Kristen Gill, general manager of the Bloor Park Club in Toronto.

Another big blunder, according to Jill Kinney - chief operating officer at San Francisco-based Club One Inc., a dominant provider of corporate fitness management services on the West Coast - occurs when a club operator assumes he or she knows what the corporate prospect is looking for. "You'll go in with a planned package, giving them only one option to buy from," she explains. "You're going to be far less successful at winning over the company than if you go in, find out what they're needs are, and base the package on those needs."

The reasons companies look for fitness offerings vary. Some use fitness to make their company more attractive during recruiting. "Those types of companies want more bells and whistles to attract employees," Kinney notes. Other companies have recently gone through some type of corporate restructuring and are looking for some sort of stress benefit for their beleaguered employees.

It's always a good idea to keep your ear to the ground when it comes to the local marketplace. You want to find out which companies are coming into town, which are leaving, and which companies some of your existing memberships already work for. "Our members are a great source of information on what's going on in the marketplace," notes Gill.

It also helps to be savvy about the business development process. Don't wait for the company to be completely moved in before making contact. You're already too late at that point, says Gill.

"Decisions are actually made a lot earlier than you realize," she says. "The company has already scoped out the competition at that point. If you're the first to hear a company is moving in, you want to be the first to get it a proposal. A lot of times they are very impressed with that."

And the person who acts as the liaison between your club and the company needn't be from corporate management. If you're having trouble getting your foot in the door at certain local corporations, your existing membership could help give that extra push, as a significant percentage of your members work at corporate locations in your neighborhood. If these members are happy at your club (and why shouldn't they be?), you've got people who can pass the word on to their employers.

"It helps if you've got a member who really wants to be a champion, and it doesn't have to be anyone with any real decision-making power within the corporation," recommends Gill. "It just has to be someone who believes in fitness in the corporate environment."

The Price of Membership
A person who believes in fitness may agree to introduce your services to the corporate environment, but you'll still need to decide how much to charge for these services. "The way you price a corporate membership is the same way you price any membership, and that is it has to be set at a price point within your margin to make the business work," says Kinney. "A lot of clubs have a tendency of charging a discount to attract employees, but can't service the new members."

Many clubs are finding success offering a capitated rate to corporations, charging a flat rate to corporate clients. "What we're finding is that when a company buys a capitated membership, they typically have a participation rate of 30 to 40 percent," observes Kinney. "So charge the full membership rate times 40 percent and you'd be able to come out with an offer corporations would find attractive."

For instance, take a company with 1,000 employees. Assume that up to 40 percent of that corporate population will be active club users. A club operator would charge a flat rate for the regular membership fee times 400.

"With that, you've probably covered the cost," Kinney adds. "You have to estimate what the participation rate is going to be and that's the big variable. Seldom do you find a company where 100 percent of the employees take advantage of the corporate membership."

Hodgdon recommends a similar model. He suggests purchasing corporate cards that employees can share. "Require the companies to buy [cards] equal to 15 percent of the population," advises Hodgdon. "So, a company with 300 employees would buy 45 at one and a half times the prevailing dues rate. That gives you a 22.5 percent penetration into the company."

At 15 percent, Hodgdon notes, there is seldom the problem of having a card available for an employee who wants to use it. And it prevents the facility from getting overcrowded.

Employee Attraction
While overcrowding is always a concern for clubs, you normally don't have to worry about every corporate employee rushing to get into your facility. In fact, you'll need to take steps to ensure that employees want to use your program. Otherwise, employers won't be able to justify the cost.

LifeStart's approach is effective in winning over the much sought-after deconditioned market. It all starts with the initial step of offering health-risk appraisals, cholesterol screenings. The plan of attack is based on a series of decision-making stages: pre-contemplation, contemplation, preparation and action. "In the `pre-contemplation' state of mind, the deconditioned don't even think a health club membership is for them," Hodgdon explains. "We use the health-risk appraisal to change that."

From their risk appraisal, the deconditioned employees see that they're not in the greatest shape. This leads to the second stage, where employees begin to contemplate the possibility of using a health club because their corporation already subsidizes the membership. "That's where we start the relationship," Hodgdon notes. "We try to move them into the contemplative stage where they begin to think there's a problem. They then move into the preparation phase where they're ready to make a change, and finally into the action stage."

Engaging the Company
Some cynics may argue that the final stage is dropping out. Although many corporations may be hesitant to purchase corporate memberships because of the belief that employee interest in the program will spike initially and then taper off, Hodgdon has found the opposite to be true. "Once the company is engaged, it's hard to take it away from employees," he says. "There's always going to be turnover in a company, but as long as those people are replaced, that's more people we send through the orientation process."

To ensure that you keep new members flowing, it helps to have constant access to a corporate client's employee information. Hodgdon recommends creating a marketing agreement with the company, opening a direct channel to the corporate population.

For instance, your contract may include offering some type of on-site open enrollment at the company, say, every quarter. You also should be permitted to distribute new employee packets regularly whenever the company makes a new hire. In addition, the client company should agree to provide updated lists of all new employees. "It makes it easy for you to say, `Welcome to the company; let's get started,'" Hodgdon explains.

This type of immediate interaction will interest employees, but what's really going to help you retain those corporate accounts is word-of-mouth. A happy corporate member is a happy employee. Happy employees make for happy employers.

"That's the greatest value we can provide to companies, and it far outweighs the cost," says Hodgdon.

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