I recently had the opportunity to speak to a large operator in China as that country begins to reopen. My goal was to understand how they navigated the different phases of the COVID-19 pandemic. The learning was extremely valuable, and I thought I’d synthesize it and pass it along.
The best piece of learning from the conversation was compartmentalization of operations. It is impossible to solve every problem you are faced with and foresee those that you may deal with in the future. In that light, view the COVID-19 closure in three phases. The closed phase (where most of us are now), the pre-opening phase and the open phase. Each of these phases will have its own set of challenges and solutions. The fact that we can look to other countries that are living through the latter two can help us plan ahead.
Before I get into the details to consider, it’s important to keep in mind that significant operational differences exist between China and the United States from a legislative, operational and, of course, civil liberty perspective. Some of the control measures instituted there will not be possible in the United States.
Here are some of the elements to think about in each of the three phases.
Closed Phase
- Cleanliness and safety: Deep cleaning, fumigation and disinfection protocols should be established and processes started.
- Cost control: Implement a cost-control strategy and business continuation strategy. Learn about and apply government programs. Proactively speak to landlords about free rent or reduction periods. Negotiate with financial factual data.
- Employee communication and retention: Be transparent with employees about payroll plan and agreement, paid annual leave or non-paid leave options. Assist with unemployment process.
- Member engagement: Nothing is more important that communicating with your members during this time. If you do not, you can rest assured that home-based solutions like Mirror and Peloton are. Maximize online content and social media posts. Let people know about remediation cleaning protocol steps you are taking. Remain relevant and gain loyalty.
Pre-opening Phase
- Plan ahead: It’s important to create your reopening strategies as soon as there is light at the end of the tunnel. Will you open all locations at once? Will you open all club areas at once? Will you bring back all staff at once?
- Practice makes perfect: Large operators in China are opening clubs in clusters in order to test general performance. Consider opening some of your underperforming clubs first to get them visibility in the long term. Open a mix of urban and suburban clubs and consider the general environment and demographics of clubs you open, i.e. if a particular club is located in a dense corporate membership market and those businesses are not reopening, consider those clubs as part of your phase two so you can practice before the crowds return.
- Check local regulations: If club openings require local approval or special procedures, ensure you are prepared to handle those from a communication and operational perspective. Prepare facilities to meet safety standards.
- Communication is key: If we have learned anything from this pandemic it is that the sleeping dog theory needs to be abandoned in this industry. Talk to your members about all the preparation and work you did while you were closed. Of course, the good operators have been doing that for some time. Talk about social distancing, check-in procedures and club amenity availability.
- Prepare to sell: Think about promotional messaging to both your prospects as well as your members. In China, operators found that personal training sales and usage increased upon opening, likely due to the fact that members can control cleanliness in a one-on-one program
- Train your staff: Ensure staff are trained in all new COVID operational policies and are aware of all you did and will continue to do. Clear messaging is key.
Open Phase
This phase is where the Chinese market is currently. Here are some of the items they are navigating
- Access control and member booking: Ensure that your technical systems can support metered check-ins and advance check-in reservation.
- Health, safety and social distancing: Be prepared with an inventory of masks, gloves and sanitizing supplies for you staff to use. Consider rules regarding minimum distance between equipment and members. Post policies throughout the club and remind members via loudspeaker or signs to wipe down equipment after use.
- Staff visibility: Ensure that members see your staff implementing cleanliness policies and safety measures.
- Restricted areas: Consider gradually opening amenities such as kids clubs, towel service, pools, group exercise studios, saunas and even showers. The staffing shortage variable aside, these amenities may need more stringent procedures.
- Refocus on marketing: Market using sales and personal training promotion for revenue. Do a special marketing campaign highlighting the value of exercise as a preventive measure. This is what most of us do best. Don’t lose sight of that.
- Commit and refine to your online programming: Continue online programming (subscription, home workout, online personal training) while making sure online and in-club programming don’t conflict. Consider making this an add on to your services, perhaps as part of your marketing initiative.
- Budget and forecast: The pandemic has had a toll on your business. The more quickly you can understand the financial implications of that, the better your chance of success. Focus on controllable expenses and set realistic targets for the rest of the year.
There is a silver lining to everything, even this pandemic. Some small operators and perhaps smaller studios will not survive, and therein lies an opportunity to grow. We will be speaking to our customers more, and we will be able to touch and influence them outside the four physical walls, which will affect our ability to retain and deliver on the promise of health and fitness. With proper planning and thoughtfulness, our industry will be better off in the long term after COVID-19, even though in the near term the pandemic is a challenge.