Note: This article is sponsored by Motionsoft and is based on Motionsoft's IHRSA 2017 education panel, which was moderated by Al Noshirvani, chairman of Motionsoft. The 4th annual Motionsoft Technology Summit will be held Sept. 11-13 in Washington, DC. Don't miss the Technology track sessions sponsored by Motionsoft at this year's Club Industry Show Oct. 4-6 at the Hilton Chicago.
4 Key Takeaways in This Article
- Technology tends to be the last thing thought about when a health club is being built.
- Enhancing the member experience via technology is a top priority among fitness IT professionals.
- IT professionals' chances of getting project funding increase if they present a hard ROI rather than how much time it could save.
- Smaller tech companies are more likely to find success reaching out to small health club operators
Despite the value technology can and does bring to health clubs, implementing new innovations can be one of the biggest challenges club professionals will face.
Generally, IT projects fail or are not even given the go-ahead by health club executives because of perceived costs rather than forecasted return on investment (ROI). Why? During the strategy and planning phase, senior management executives do not evaluate the potential for technology to boost member acquisition, improve retention, or even evolve member experience because they're focused on up front costs to implement a technology solution.
To combat this barrier, club professionals to sell the potential and ROI to senior management, not the other way around. Technology has become too important to the fitness industry for innovations to fall by the wayside solely because of initial development costs.
At Motionsoft's Technology Summit during IHRSA 2017 in Los Angeles, panelists Jeff Skeen, CEO of Fitness Connection; Glenn Rappaport, CIO of Sport & Health; and David Collignon, vice president of operations for Blink Fitness, discussed how to get a "yes" from senior management, some of the technology they have in the works, what their dream apps are and insights on how smaller tech companies can get in front of large health club corporations.
Recognizing Technology as a Sales Tool
In the fitness industry, technology can become an afterthought when an operator is building a club. In the early phases, conversations gravitate toward the member experience, square footage and amenities.
Rappaport works to get into the planning meetings at Sport & Health to make sure technology has a voice early on in the process so he can figure out what the club is looking for technology-wise, how he fits into the plan and determine what the club's sales tool is.
"I look at technology as a sales tool," Rappaport said. "There's so much out there for people to do with technology from using apps to watching videos. A lot of what we're doing is thinking about technology from the perspective of the member experience."
One opportunity Rappaport identified was using technology to help track time for trainers. Sport & Health has between 1,500 and 1,700 trainers, which makes it tough for the club to track every minute they are in the club and then pay them commission. Rappaport used information from Sport & Health's core systems and billing systems to make it easy for directors to see how much time the trainers were actually working. His team created a mobile app and webpage that club directors and trainers could use to keep their time accurate and provide the payroll department with commissions.
Meanwhile, Fitness Connection used technology to cut the four platforms it was using down to one, Skeen said. The transition allows executives to view a single platform to report on the health of the company rather than needing to log into multiple platforms, reviewing multiple spreadsheets and then working over the course of a week to put status reports together. At the same time, Fitness Connection built a data warehouse.
Improving the Member Experience
One of the best uses of technology in the fitness industry is making life easier for club members. Collignon said he spent a lot of time thinking about how Blink Fitness could make the member experience as seamless as possible the moment they enter the club. Blink is somewhat ahead of the game in terms of customer service and technology; it has kiosks throughout its clubs to help members and it's easy to complete transactions, but Collignon said the club is only at 25 percent capacity of what it could be doing at the kiosks. He wants to get Blink to a level where the member can guide the journey themselves.
"As the operator, I really just step back most of the time and watch what's happening in a club and the experience that both our associates are having, and try to make the experience as good as it can be," he said.
Securing Approval (and Funding) from Senior Management
Many technology executives, whether they're in the fitness industry or not, often run into a similar problem: they see their projects fail or go through challenging times and aren't sure how to prevent this issue.
Skeen, who was a CIO and CFO before becoming CEO at Fitness Connection, sees projects failing before they have a chance to get started for two reasons:
- People aren't building strategies around what they want to design.
- People aren't providing a clear road map that displays the ROI.
Skeen said any technology presentation is easier to digest when it's offered in bite-sized chunks. Instead of saying, "I need an app for my treadmill" or "I'm going to build an app" without any kind of strategy, telling senior management, "I'm building this, and here's how we're going to get there" makes it easier to see exactly what the company's money is going towards.
"I think that is the thing that scares most investors or senior leadership," Skeen said. "When they hear an IT project, all they hear from the CIO is, 'Blah, blah, blah, a billion dollars, blah, blah, blah.' So they're like, 'No, that's a waste of money. You guys are just building an empire. It's not going to give a return.'"
Rappaport has managed to avoid the hurdle by doing his homework ahead of time. He vets out his projects and makes sure he has a "hard" ROI to present with his proposal. He pushes the dollar figures to the forefront, and if there's a "soft" ROI to be had (time savings), he'll casually add it to the mix.
"If there's anything you're looking for from your company, go for it, but spend the time to see how you can really move the money around so you're either saving money or you're not going to spend any more money," Rappaport said. "If there's a soft ROI, I just call it a value add."
During the last five or six years, Collignon has had the most success from IT projects in which he and his team have been able to first get support from the field team and the end users. It's easier to get an OK when details like how it will be rolled out and how it's going to be executed and make people's lives easier are presented on the front end. It often fails when these details aren't presented ahead of time.
"That's a big area when you take that time on the front end and get the leadership team and end users involved with understanding, helping think of the challenges when you really try to roll this out and get it out there to the general public," Collignon said.
Testing Technology Out in Real Time
One way to get a feel for how things operate at health clubs is to go out on the floor and observe. Collignon brought one of his colleagues to one of Blink's most high-volume clubs for two hours just to see what was going on, what could go wrong, what happens and what real-life experiences are like. It wasn't to show anything bad that was happening, but more of an opportunity to see what else they could do and where else there were opportunities.
"A lot of times we're sitting in offices all day long, and we don't spend enough time in the clubs to see what the journey looks like, what the member experience looks like unless we hear about a complaint or if something happened," Collignon said. "Spending time with Adam has been critical. Each time he's walked away with something that could have us $100,000."
Skeen did something similar when he was the CIO and CFO at Gold's Gym International. He would take his technology team and make them work at the front desk so they could see and feel what it was like for a customer to yell at them because something didn't work.
"I think the front desk is a great place for your back office to be because it's hell. They come back to the back and say, 'I completely get the vibes with what your leadership team deals with,'" Skeen said.
Ongoing, Long-Term Projects
In the fitness industry, some projects take longer than others, and some take much longer to complete. Sport & Health, for example, is in the middle of a 12-month project that will improve the club's payroll system. It had been using ADP for payroll but will transition to use human capital management (HCM) software, which will take care of the entire process, including on-boarding and recruiting.
When new hires start, they can fill out all of their paperwork from home. That information moves to the payroll system, and the club can manage the employees for their entire time at the company. Employees will have their own portal, and the human resources department has its own Internet, so HCM handles everything from A-Z.
The project will be phased in. Rappaport anticipated the first phase will take about nine months to just get them to the payroll department. The time it'll take to implement will be worth it because just like the club thinks about the member experience, it also wants employees to have a simple way to interact with the company and be able to get the information that they want. Millennials want to have this information on their phone, so the club wants to give it to them—but a background check would have to be conducted.
Skeen's long-term ambitions revolved around fulfilling the club's promise to customers when they come in for personal training and tackling the healthcare crisis. Skeen recognizes that Fitness Connection is reaching into a population where 14 percent of its customers have never exercised before. He wants to find an affordable way for these customers to change their lives, and he said that way could be through reimbursements.
The key is creating a technology to capture information on members' experience outside of the health club, that they can take to insurance companies or corporations and say, "Look this individual has Type 1 or Type 2 Diabetes, and they're managing it through exercise and nutrition. I want you to pay because it's good business practice."
Any success with a project like this will rely on data collection. Skeen's team is trying to figure out how to capture data from all of the Bluetooth pieces, treadmills and outside activities, such as bike riding, bring it all together and present it to members to get reimbursed for maintaining a healthy lifestyle.
"I think our industry has an incredible opportunity," Skeen said. "That is a 20-year dream and how we are taking steps now to fulfill."
Handling Requests from Upstairs
Technology professionals face their share of resistance and rejection when they want to implement something new, but there are also occurrences when senior management will bring an idea to them. This often happens when a CIO or vice president of IT will reach out to the tech staff and say their CEO saw some innovation on the news and wants to know if they can do something similar.
Rappaport said when this happens, he'll seek out a flag holder, someone who's excited about the potential of this new idea, and see where they can fit it into the mix of their work and put a beta tag on it.
"I find someone who's interested and say, 'Hey try this thing out. Let me know what you think about it.'" Rappaport said. "Some of the things stick and some don't."
Advice for Smaller Technology Companies
Health clubs, especially larger ones, sometimes struggle with in-house staff embracing technology solutions, so it can be even tougher for outside tech companies to get their solutions in front of senior management. As Skeen explained, operators of large clubs don't have the time to break away from their important projects to review outside proposals.
His advice to smaller tech companies is to seek out smaller health club operators who can with work with them to build a case study on their ROI. His reasoning was it's harder to get a hold of larger club operators as they have private equity funds behind them, and they have to do returns.
"Every day, it's flash revenue," he explained.
For tech companies that do get a large health club operator, it's imperative they ensure the club operator that they're going to stick around after the pilot phase. Operators of bigger clubs can't invest their time and resources in a startup that can't display some sort of stability. So if a startup has big money behind it already, that's great, but if not, the best bet is to make a case study for small operations as they'll be able to make the proper amount of time and help the startup make its case.
Using Technology to Talk to Club Members
One of the ways health clubs work to improve what they're doing is getting the voice of the customer. At Blink, the club uses a third party to survey its members so it can understand the member experience through their eyes.
One of the challenges of conducting a survey is getting responses. Collignon and the Blink team overcome this challenge by making the survey experience as fast as possible. They may just ask one or two questions or just one really important question over the course of a month or six months.
It's not just enough to survey members; you have to listen to their answers, too, Collignon explained. It's easy to fall into a sense of thinking you have all of the answers and just roll out technology because you "know" it's what everybody wants, but it's crucial to listen to what the customers want.
Collignon shared an example of being in a meeting where everyone in the room was ready to move ahead with some new technology. The club had recently surveyed its members, so Collignon suggested asking if members really want the new technology. Team members were already spending time, energy and money on something no one knew was necessary or wanted by members.
Along with surveys, Blink works with a cross-functional team so when ideas pop up, they can say they have to think about it for a bit, from all angles, not just one area. Everyone weighs in so the team can decide whether or not new ideas have legs. The other determining factor is if the idea can be piloted easily.
The Build vs. Buy Discussion
The build versus buy debate is one of the most common ones in the fitness technology industry, whether it's in relation to club management systems or bolt-on systems.
Which side of the debate Rappaport falls on depends on what's needed. One of his messages to software providers is to always build software for the job function, not for the feature. He said that software employees say they can do that, but it's always going to be a different situation when applied to one's own business.
In-house, Rappaport and the Sport & Health team build shadow systems, or productivity systems, that will use core applications so they can figure out what a person is doing on a daily basis to make it easier for them to do their job. They'll make the information they need to see easily accessible and not have to go through a lot of clicking.
Sport & Health also built its own personal trainer subscription module because it can be difficult on some systems to create a personal training package. When Rappaport and his team looked at all of the different variants, they realized there were too many. They put together a system where people could see if a trainer was certified, was mobile friendly, was easy for a member to say yes or no and could bill users every month via text messaging.
Rappaport said the company had a business problem, and the solution for that problem did not work, so he got rid of it.
"If there's a solution we can make work, and it delivers 75 to 80 percent of what we need it to do, we will go with that tool," he said. "Then, we'll try to tweak it so we will get to 80 or 85 percent of what we need it to do.
"It's the last 15 percent that's really expensive and that you probably don't want to build for unless you're going to be handling that situation over and over. We absolutely build, but we also look at the market first. We like to see what's out there. If nothing can fit, then we're also going to solve the business problem."
Technology professionals in the fitness industry have more than enough projects to keep them busy, but that doesn't mean that they don't have their own dream projects in their heads. When asked about what their dream app would be, all three came up with a concept that was geared towards the customer experience.
Skeen's ideal app is something that a customer is going to use and continue to use. Often times, he's seen someone get an early adoption of an app, but by the time the use starts to get into their club experience, the usefulness of the app has dwindled. It might start with they can use their phone to check in at the front desk and check a schedule, but it's not really changing their experience. He wants to create something that makes people want to take their fitness experience to the first level but is also user-friendly and not intimidating to a first-time gym goer.
Collignon said he wants to create an app that's predictive and collect customer data to better serve them. His dream app could gather intelligence on the customer so in any situation Blink Fitness could present them with the things they might not have thought they would need. For example, if a customer went to the doctor and had a cholesterol issue, the club could be ready with nutritional products and services to present to them. The club would have knowledge of the customer and make more money. The key would be to have intelligence on the customer that presents to them individually, not just in a mass.
Rappaport's dream app somewhat mirrored Collignon's in that he wants to know the different points in time when a customer could use their help. However, he'd like to see the technology, whether it's an app or something else, be able to communicate with customers so it looks like the communication is coming from a person, even though it's really coming from Sport & Health's systems. The personal touch would be a way to make the customer feel special and keep them engaged.