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Diversification of Health Club Models May Be Part of the Answer

One of the things the fitness industry does well (or not so well, depending on how you look at it) is imitation of any model that proves successful. If one person finds a niche, 100 others jump on board and try to copy it, perhaps suggesting that they are perfecting it.

That bandwagon mentality led to a ton of racquetball/tennis facilities in the 1970s, to a proliferation of multipurpose fitness facilities in the 1980s (and continuing today), to circuit training facilities/women-only facilities (based on Curves’ initial success in the 1990s), to low-price clubs (based on Planet Fitness’ current success) in the 2000s.

These days, we are seeing a growth in alternative facilities and alternative membership models. These models include personal training studios that focus on small group and large group training more so than one-on-one sessions. They include CrossFit studios, group cycle studios, and boxing and mixed martial arts studios.

This trend will only grow as the industry tries to discover what will attract the multitude of people who have never belonged to a club or who keep joining and failing and then quitting. The expansion of these business models is encouraging.

Some of these alternative models stem from the growth in functional training and the popularity of CrossFit as an in-your-face way to get fit.

But some of the growth also stems from the recession’s effects on credit. Many of these alternative clubs are smaller, so rent is cheaper. They also have minimal staffing costs and use fewer, if any, large pieces of equipment, focusing instead on smaller (and cheaper) functional training products.

These clubs also are experimenting with different membership models. Instead of selling just monthly memberships, they may sell packages and tiered levels of memberships.

As word of success from one and then another of these alternative clubs has gotten out, others have swarmed in to join the ranks. Even some larger clubs are looking at revising their membership models based on these success stories. That often means a reworking of a club’s business plan and structure, perhaps staff and definitely sales. It is a hefty undertaking that is not for the faint of heart.

I do not advocate that everyone jump on board and switch to a smaller facility with small group training and a tiered level of membership. Some club operators have determined their niches and are serving them well with their current models. What I like about these new clubs is that they are diversifying the types of facilities from which consumers can choose. Some consumers will always want the luxury experience they get at a high-end facility. Others just want to “rent a treadmill” for $10 per month. Some want to be yelled at and encouraged by their peers while doing their 100th pull-up. And others want to punch that heavy bag.

What I like is that I do not feel the models that the industry offers the public have ever been more diversified than they are today. That is a good thing. If you want to jump on a bandwagon, feel free. But perhaps you are better served to come up with another model that has not been thought of yet for those consumers who still have not found the type of facility that suits them.

Note: For more about diversification and how it has affected sales, purchase this Club Industry report: Health Club Sales Strategies 2012.

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