Panel Session Focuses on Recession, Retention

CHICAGO -- The panel session “Fitness Business at a Crossroad: How to Hold on in Today’s Economy and Prosper for the Future” at Club Industry 2008 brought out some of the heavy hitters in the industry.

Moderated by former Lifetime Achievement Award winner Rick Caro, the session addressed issues affecting club owners today in a weak economy. The panel consisted of Carl Liebert, CEO of 24 Hour Fitness; Jeff Klinger, CEO of Anytime Fitness; Gale Landers, CEO of Fitness Formula; and Scott Chovanec, president of Scott Chovanec and Associates.

Caro began the session by asking the panel to describe how their clubs were affected by the weakening economy and what they were doing to counteract it. Liebert began by saying that it was actually refreshing to hear people admit that the country was in a recession.

“It’s going to be a pretty tough road to hoe for a while,” Liebert said.

Liebert also said that his more than 400 24 Hour Fitness locations were hoping to take advantage of the current economic situation by focusing on member needs.

“Get out and talk to the people who are paying your bills,” Liebert advised the crowd. “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 it is to keep current ones. Klinger said that because Anytime Fitness has smaller franchise clubs that it hadn’t felt the economy slowing dramatically, but that he was focused on all Anytime Fitness locations improving their club culture.

“We might be the last apple to fall from the tree, but it is a scary time,” Klinger said.

Klinger also said that he hoped the federal government’s 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 to help increase retention.

Focusing on retention and maintaining good, quality service was a theme heard repeatedly during the session, the majority of which was open to questions from the audience.

“Eighty percent of people who do business at the front desk are not delivering service at the front desk,” Chovanec said.

The panelists also discussed the importance of having quality staff and programming, particularly for new members who are deconditioned and may be intimidated by the club. In addition, group exercise was said to be a solid retention tool that creates invaluable member-to-member relationships. Liebert said 24 Hour will launch a group training program for non-members beginning in January.

“We’re the only industry where you sign up and you don’t get instant gratification,” Liebert said. “You sign up, and then you have to work.”

Landers added: “You can’t give them instant gratification, but you can give them an instant experience. 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.”

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