In the current post-pandemic situation on the brink of default, fitness centers are finding it especially difficult to survive. It becomes critical what steps the owners will take to save their businesses.
Situation
The Covid-19 pandemic has made it very difficult for fitness centers, which in some cities have simply sat idle while continuing to pay rent and employee salaries.
The "basement" ones worked quietly, while the large ones, being under the scrutiny of the controlling bodies, could not afford it.
Once open, they were hit by a new wave of problems — the impending severe drop in the purchasing power of the population.
It’s important to realize that the fitness industry, like the service industry in general, is in a particularly risky position — unnecessary spending is the first thing people give up on.
Economics
The most obvious solution to increase profits is to raise prices either outright or by removing the ability to buy long-term passes (and monthly is always more expensive).
However, this decision is fundamentally wrong. The income of visitors does not grow unlike the prices for food and other mandatory items of expenditure, therefore, in this case, the probability of refusing the services of the fitness center only increases.
In addition, any action must be justified and understandable to the customer. Raising prices while maintaining the same level of services, staff salaries, rental rates and equipment depreciation suggests an effort to maximize profits by an owner who does not care about the difficulties of customers.
In addition, any action must be justified and understandable to the customer. Raising prices while maintaining the same level of services, staff salaries, rental rates and equipment depreciation suggests an effort to maximize profits by an owner who does not care about the difficulties of customers.
What to do
First, don’t panic. A week or two for a sober assessment of the crisis situation and action planning has never hurt anyone.
Secondly, you need to do marketing. Not in the mass sense — advertising in social networks and on billboards — but in the deepest sense.
Globally, marketing is a set of measures to attract new customers, retain existing ones and increase their loyalty. It is important to realize that attracting a new client is significantly more expensive than retaining a loyal one.
To get started, it’s worth putting together a marketing mix consisting of the 6P: product, people, price, positioning, place, promotion.
Only the location of existing fitness centers has everything defined. And even this includes such parameters as cleanliness, snow-free parking lot, etc.
What is the product of a fitness center and its positioning? Is it true that it is just a room with a lot of exercise machines? Or maybe it is a place for uniting people with common views on a healthy lifestyle, a way to spend time usefully, distract from everyday troubles, communicate with like-minded people? And what if it is also a place for dating the opposite sex, self-realization and self-esteem? Or maybe someone visits only the sauna/solarium?
There should be several hypotheses and target audience segments, and each one should be handled differently. Some are ready to overpay, others will easily refuse, and others are just looking for an excuse to do so.
When it comes to prices, in addition to calculating your own independent plan, it is worth keeping a close eye on your competitors. Their every move should be analyzed and taken into account.
Raising prices is great. We are engaged in promotion with a focus on taking their customers. Reducing — analyze the reasons, determine the possible limits of their profitability, take steps to prevent customers from switching to them.
It can be seen from the promotion of fitness centers that traditional promotions are very profitable even in normal times. A person has little appreciation for what he got without labor. Having bought a monthly pass for half price, it is very likely that he will never come to the gym. This peculiarity is psychologically proven and repeatedly confirmed in practice (even by us).
In times of crisis, you need to be closer to your visitors. Pay maximum attention to their needs and desires, nurture and cherish the loyal ones.
Development
You should never limit yourself to the walls of a building. There are many cases in history where a product under development has grown into another, much more valuable product.
Why not, for example, make an app that combines fitness metrics and touches on lifestyle in general, with an emphasis, for example, on geography? It would not just contain information about the club and trainers, not a banal training log, but would embody a whole ideology.
An existing fitness center already has an audience. Not knowing it or knowing it but not using that knowledge is a crime.
Every fitness center has information systems, but are they as accurate and complete in giving the owner a picture of their customers?
How large is the customer base? How many "live" visitors are there? How often and with what periodicity do they (en masse and individually) visit the center? What is the socio-demographic map? Which "windows" are free? What services can be used to close them?
Pensioner Arnold, who visits the gym on weekdays from 9 to 10 AM, when the halls are almost deserted, and three 30-year-old guys driving an Infiniti on Monday-Wednesday-Friday during rush hour from 6 to 9 PM, when all the gyms are occupied — are fundamentally different clients. It is impossible to apply a general approach to them.
So, one of the most important rules is know your customer.
An information system is not a finished software product that solves a part of understandable tasks. It should become a skeleton for current work and a tool for analyzing and testing innovations.
It is important not only to know the client’s name and club card number. His/her birthday, exact time of visits, periodicity, services consumed, etc.
More globally: it is necessary to keep a record of conversion of promotions and advertising activities, occupancy of halls with forecasting and demonstration to visitors, etc.
And in small things: for example, often in the centers, even at low occupancy rates, lockers are given out next to each other, which is very uncomfortable. It is easy to remedy the situation even without electronic assistants telling you which key to give — just place the keys on the drawn plan of the locker room, regulating the issuance of the most distant ones, which will be easily visible visually.
It is also critical to collect feedback at all times, and especially during a crisis. This should be wholeheartedly encouraged and provoked by customers. It may turn out that they are missing a small thing that will increase their loyalty, and word of mouth will bring in new ones.
To summarize, step number zero is to start gathering information. As complete as possible and in all possible sections. It can and should be carefully analyzed, inevitably generating ideas for development.
Conclusion
Anti-fragile businesses/projects/systems survive in a crisis (read N. Taleb’s book), those who invest in marketing instead of cutting "unnecessary" costs.