Conversations with Industry Leaders Yield Insights into 2022

(Editor's Note: This article is a preview of the Trends Report that Club Industry will release on Feb. 28.)

In early 2022, I’ve had the benefit of getting back to many in-person events and spending time with some of our industry’s top thought leaders.  With these conversations fresh in my mind, here are some of the trends these experts shared with me.

The Customer Sets the Rules

The customer is setting the rules on what they want, where they want it, when they want it and they seem to be willing to pay for just that.  I believe they will pay more for superior products (staff, connection, experiences, facility, program, services, etc.).

There are three key drivers of member loyalty that you can manage and improve without huge capital investment, according to MXM:

1. Friendliness

2. Cleanliness

3. Equipment Condition

MXM has also introduced a strategy wheel which is an excellent tool in refining your customer experience model.  It also proves to add revenue and profitability to your bottom line. 

MXM CEO Blair McHaney said: “I have been dazzled by the focus on member experience from IHRSA, to the Tech Summit, Club Industry and at FitLife. That is great for our industry. My hope has always been that operational member experience management software would be as common as running water and HVAC.” 

He said that he has heard several leaders say, “I don't understand how you would run a business without constant feedback from your customers.”

He added that the fitness industry is on the verge of explosive growth, and he believes that means we will get some deeper penetration into the other 80 percent. 

“We need to be prepared by delivering a better customer experience than they have grown accustomed to from Starbucks, Hyatt, and frankly, a lot of small shopkeepers at local stores and restaurants,” he said. “We need to ‘out customer-experience’ everyone — not just other gyms.”  

Culture – Metrics – Business Models

I asked Bryan O’Rourke with investment and consulting firm Vedere Ventures as well as president of the Fitness Industry Technology Council, what three things should be on the radar of health club operators right now, and this is what he said:

1. Creating a culture and compensation dynamic that attracts and keeps great people.

2. Understanding that the cost of member acquisition via digital in particular is surging so how you spend marketing dollars is becoming more important.

3. Differentiating your business model in a profitable way. What is really making you money and how does that resonate with your existing and potential members?

Healthcare and Medical Integration

I believe we will see tremendous opportunities looking at fitness, wellness and medical integration as a continuum of care. One of the bright opportunities we have is a shift from simply fitness to overall well-being.  Our customers need the mental, emotional and social solutions our products provide in addition to the physical elements we have been known for. 

Jeff Skeen, who operates in the medical integration space with his company Results Redefined and ReShape Companies, shared the following with me.

Due to the shut-down of the health club industry during the pandemic, operators are looking for ways to not only replace lost revenue but also to be seen as part of the healthcare industry. Unfortunately, although fitness was a critical part of combating COVID, politicians viewed fitness as more "entertainment" and "beautification" because of the decades-long messaging from health clubs.  The great news is that health club owners are now being more proactive about how they are being viewed through a number of avenues:

Advertising. Working with agencies to provide messaging to the public that health clubs are not only a place to get fit but also to improve mental and overall health.

Medical community partnerships. Making an effort to partner with physicians in the community to ensure that their patients are kept healthy and are lowering healthcare costs.

Leveraging insurance reimbursements. With the emergence of technology, which makes it easier for health clubs to work with insurance companies to receive insurance reimbursements for health club and digital fitness memberships, operators are starting to replace lost income.

“Although the pandemic presented many challenges for health clubs and gym owners, I am encouraged that the industry will be stronger than ever,” Skeen told me.

The Future of Health with Customized, Timely Technology Solutions

We are getting closer and closer to dramatic improvements in the use of technology with our human-to-human service models. As I’ve shared many times before, people are the secret sauce of our business models and cannot be replaced by technology, but technology can allow for increased efficiency, revenue management, customer experience management, consumer analytics, profit optimization and freeing humans to directly connect with and have positive impact on our customers. 

Mike Rucker, who is the chief digital officer at Active Wellness, told me that the fitness industry is at an exciting cusp regarding the future of health. Through better use of technology over the next three to five years, we will be able to create adaptive, closed-looped experiences that provide people with just what they need, at just the right time. Rather than fitness delivery that’s “good enough,” we will be able to customize delivery based on level and preference, leading to better adherence and outcomes. Rather than dictate, we will cocreate regimens that not only satisfy but also provide timely feedback crafted to be meaningful at the n of 1 level. Engaged by specific, motivating data, we will finally reach a point where we can help people create habit loops that are not only rewarding, but more fun as well. This convergence of opportunity, fueled by improved hardware and better software design, will lead to better retention and improved member satisfaction for any club that takes advantage.

People, Results, Community

I always share the People + Product + Process = Profits model. Brent Darden, former interim CEO of IHRSA and current REX Roundtable chair, has some great takeaways to focus on as we enter 2022.                                

Based on topics of focus at recent industry events and with the REX Roundtable groups he leads, he told me that his hope is that club operators will keep three things top of mind:

1. People first. In this era of labor shortage and what some are calling the “great resignation,” it’s imperative that recruiting, training, empowering, and retaining of staff remain a priority.

2. A commitment to truly help members achieve results. Supporting their efforts with specific resources and coaching that enhance the likelihood of success.

3. Seizing on the opportunity of a heightened awareness in society related to the benefits of being active and healthy. Consider exploring and expanding club programs and services that meet the needs of underserved segments of the local community.

BIO

Bill McBride is co-founder, president and CEO of Active Wellness, as well as CEO of BMC3 Consulting. He has nearly 30 years of experience managing all aspects of commercial health clubs, medical fitness centers, residential, community, multi-tenant and corporate fitness sites. McBride has served as chairman of IHRSA’s board of directors and several advisory positions for prominent industry associations. He is actively engaged as an industry education author and speaker.