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How Health Clubs Can Overcome Challenges and Unlock Potential with Technology

Club operators need a solid strategic foundation–and sound legal advice–to keep pace with the proliferation of technology in the fitness industry.

New, sophisticated technological solutions offer health club operators new ways to manage every part of their business and their relationships with their members and prospective members. These tools touch on everything from group fitness and personal training to check-in and prospective member marketing.

Even though technology offers health clubs a wide array of opportunities, it also brings challenges—from deciding which technologies to purchase, to determining how to implement technology for the greatest impact to ensuring no privacy issues cause issues. The wrong choice could lead to a loss of members.

In the face of this pressure, it can be tempting for clubs to forego the latest advances and stick to the tools that have been successful in the past. However, opting out of the technological revolution carries large risks, too, said Daniel Waide, chief commercial officer for Wexer, which creates virtual digital fitness solutions. Club operators who are reluctant to integrate new technology into their operation face the threat of falling behind more ambitious competitors and disappearing from the view of the people whose attention they need most, he said.

“There’s always going to be room for sort of low-tech offerings, but I think the biggest danger is just becoming irrelevant,” Waide said.

Gym members who are 30 and younger have grown up connected and online, he said.

“They might not even find you or know you exist if you’re not online in a meaningful way and you don't have these kinds of [technology-based] solutions that are becoming common,” Waide said.

Experts urge club operators to prioritize technology’s potential to address problems and create opportunities, while keeping an eye on the potential challenges an ill-fitting purchase can bring.

The Allure and Danger of Tech for Tech’s Sake

Without a strong strategic foundation behind technology purchasing decisions, a common mistake that operators make is falling prey to how impressive and sophisticated a tool seems on the surface.

“Being in the fitness industry, there is a never-ending stream of new ‘cool’ technologies that I find personally fascinating but our typical customer would find very little value in,” said Ryan Masanz, chief technology officer at Self Esteem Brands/Anytime Fitness. “This may sound cliché, but personal bias often outweighs real-world practicality.”

Technology should never lead the conversation, according to Brett Maloley, CEO of Ladder, a mobile platform that connects people with local health and wellness professionals.

“Clubs are businesses that grow by increasing monthly dues or increasing average dues per member per month,” Maloley said. “We've got acquisition problems, we've got retention problems. We can't further monetize our members and we can't drive assets that we have outside of our four walls. So let's start there. Rather than talk about the technology, let's talk about the problems.”

In some cases, club owners have adopted exciting, sometimes expensive new technological tools to perform tasks that were already being performed with reasonable efficiency, he said. Any small improvements were not worth the investment, especially if they steered club owners away from making an investment that would better serve their core missions.

“Sometimes, it’s just not a case where technology is needed,” Maloley said. “And I think what has happened to some extent is people are always getting sold something, and if they hear enough that they need something – like [artificial intelligence] – eventually they believe that they really do need it. People end up taking sales calls and end up in these situations where they're forced to learn about things that I don't think they should necessarily be worried about. The focus when speaking about technology should not be on if AI is relevant to a gym owner. The focus should be if what it can do is relevant.”

The danger of rushing into a technology purchase is a mix of wasting dollars, real opportunity cost and potentially losing some consumer trust, Masanz said.

“Because technology moves so fast, people often think they need to be first to adopt,” he said. “However, new ideas often diverge into many directions and then ultimately converge into something simple and ‘sticky’ that hits the mainstream.”

Health club operators should create a technology roadmap that supports their brick-and-mortar business rather than being isolated from it, according to Al Noshirvani, founder and chairman of Motionsoft, which provides club management software and payment processing. Sometimes, straying from a strategically focused mindset can lead to panicked, ill-defined decisions.

“A lot of people tend to just sort of throw things at the wall to see what sticks,” Noshirvani said. “And the reality is that you're much better off having a very discreet set of technical tools that enhance the member experience rather than a hodgepodge of different solutions that you integrate to. You should plan out your technology roadmap and try to marry that up with your strategic plan and then select the products or services that you think your members or your prospects would be interested in. But they have to go hand in hand with the brick-and-mortar stuff.”

Legal and Privacy Risks

Some club owners jump into using sophisticated technology without being sure they understand the complete legal landscape surrounding those tools and how it applies to them, Noshirvani said, but much of the risk can be mitigated by good member contracts and consultation with an attorney.

Investing in legal guidance is a must for club operators who opt to embrace new technologies, according to Dean Giamundo, who at the time of this interview was director of sales for Jonas Fitness but now is director of franchise development at Gold’s Gym International. Risk is inherent in everything clubs do, and technology carries a particular set of potential legal risks, some of the most critical of which relate to privacy, billing, phone communication, passwords or authentication mechanisms

Good lawyers will update contracts regularly to ensure they reflect new laws, Giamundo said. For example, every contract should now have an opt-in for texting and calls, including collection efforts. In some cases, you will need to add privacy law statements based on your jurisdiction.

Clubs that use tools such as fingerprint collection and facial recognition face particular pressure to stay atop legal requirements.

“None of these should scare you,” Giamundo said. “You just need to make sure you are on the right side of the law by keeping waivers and agreements up to date.”

The intricacies of laws change based on a club’s location, making sharp legal advice especially essential, Noshirvani said.

“One of the challenges that technology has is that there tends to be a great deal of variability from state to state as it relates to rules, regulations and laws,” Noshirvani said. “As an example, with things like biometrics and the ability to use fingerprints as a method of check-in, each individual state will have its own set of laws and you've got to make sure that before you implement a technology solution like that, whether it's facial recognition or biometrics or more conventionally storing health information about a member online – which makes you subject to HIPAA – you check and make sure to ask the right questions and also use common sense.”

In addition, Noshirvani said it is imperative for clubs to make sure that their employees have a thorough understanding of their responsibilities related to the technology they use. He recommends that clubs give their employees a self-assessment questionnaire to make sure they are educated on the basics.

“You don't know how many clubs I walk into where I see a username and password that is visible right on the front desk computer,” Noshirvani said. “You've got to realize that if there's somebody in the facility that happens to be walking by and takes a peek behind that desk and they get access to that, they have access to not just membership information but potentially have access to credit card information, usage histories, things that you don't want out there.”

As clubs collect and manage increasing amounts of data about their members, Masanz said operators should weigh if they need to store the hundreds of data elements any modern technology will give them.

“Once you do [store the data], you are responsible for it,” Masanz said. “New regulation is making this data management stricter for good reason. There is a delicate balance of knowing your customer to help them reach their goals and just creating unnecessary liability. Ideally, lean on established platforms that manage this for you, anonymize sensitive data and do not retain data longer than you actually need it.”

Informed Decision Making

Remaining informed about the latest and best technological advances is an ongoing part of a club operator’s responsibilities, but that doesn’t mean a club owner should implement every leading-edge technology they find, Giamundo said. Instead, they should educate themselves by joining technology councils, going to conferences and trade shows, joining roundtables and exploring resources such as podcasts.

“Become a student,” Giamundo said.

Technology seems to have prompted a new phenomenon in the fitness industry – an increased willingness for club operators to connect with each other and discuss the challenges and opportunities they are facing, Noshirvani said. For instance, Motionsoft hosts an annual technology conference, the Motionsoft Technology Summit, for executives in the health and fitness industry.

Although some organizations such as IHRSA were partially founded to allow health club operators to share best practices and industry consultants and health club operators often speak at industry conferences sharing solutions to industry challenges, the expansion of technology into the industry has led to more sharing of ideas, Noshirvani said.

Clubs should ensure they perform due diligence to confirm not just that a product is a good fit for them but that the vendor offering the product is also a good fit, Giamundo said. He recommended consulting with similar clubs about the software and technology they use, letting “opportunities and pains” steer the conversation rather than the technology itself. Working with a consultant who specializes in technology or the area being addressed by technology, such as group exercise or retention, can ease the selection process. In addition, club owners must have internal teams that evaluate, implement and train on the new software, he said.

“A good vendor partner will help in all of this, but you will fail if you do not have your own internal teams who are dedicated to making the implementation a success,” Giamundo said.

Impact on Members

In the face of the nearly infinite ways technology can be employed on both the front end and back end of club operations, a danger is that technology will complicate and worsen the member experience rather than improve it.

For instance, club owners should take advantage of software opportunities that make the membership joining process easier on the clubs without losing sight of the fact that it also needs to be easier for the joining member.  

“One truth that should be the direction of all club owners is making purchasing and becoming a member of your club frictionless,” Giamundo said. “It is important to have software available to your members that helps provide that.”

Similarly, technology that reduces human connections in a club environment can make for a less pleasant, less welcoming climate for members, Giamundo said.

“Always remember that we are still a people business,” Giamundo said. “Do not let technology take the place of personal communication and customer service. It can and will enhance it. It should never replace it. Make your members feel like family and not a number and you will keep them.”

 

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