Club Management

Emerging Profit Centers: 3 New Ways for Clubs to Earn Profit

emerging-profit-centers-blog

In a recent webinar, industry expert Michael Scott Scudder explained that clubs can no longer rely on memberships alone to drive sustainable profit. He outlined several other profit centers that operators should be focusing on, including small group training, specialty group exercise classes, special educational programs (i.e. postnatal) and of course one-to-one personal training. 

Many savvy operators are already familiar with these profit centers and are already building programs to focus on them.

However, as the industry continues to evolve, it is important to be thinking about what operators can tap into next to earn additional profits. As we consider where these areas might be, a key factor that will help determine it is technology.

This year has been tremendous for technology in the fitness industry. We’ve watched the popularity of wearables and mobile apps skyrocket with more than 25% of young adults (25-34) now owning a wearable (likely an even higher percentage among club members) and 80% of online adults owning a smartphone. Last year, 140 billion apps were downloaded -- that’s 437 times the U.S. population! It’s clear that we can look towards technology for new ways to grow revenue.

Consider the following ideas:

1. Mobile Bootcamps

As technology has broken down the barriers that require every employee to work in an office (now many people work from home), consumer demands have evolved to desire more convenience and the ability to do “what they want, where they want.” This means that working out cannot be restricted to just a physical facility anymore.

Innovative new mobile concepts where clubs bring the workout to the consumer are evolving. For example, Mobile Fitness Concepts near Boston, MA now offers a hybrid mix of workouts in their facilities and retrofitted pickup trucks with workout gear, rope pulleys, etc. attached to the back. These trucks can go anywhere from a parking lot of an office to a local park.

mobile-fitness-truck

Consider the evolution of new models:

  • Small groups can request a training class near their house, and the club goes to them.
  • Clubs can move to where the most customers are and not be constrained to a small target radius around a physical location.
  • Mobile apps can be used to locate and request “on-the-go” fitness clubs, providing extreme convenience for the consumer.

Another example is Gain Fitness -- a new startup health club that has no location. It simply curates a network of trainers that can be requested from a mobile app and dispatched to the member’s location. There is no reason why a physical club cannot offer similar services in addition to their brick-and-mortar core.

2. Mobile Ecommerce Supplement Sales

The emergence of mobile ecommerce has completely changed the way people are shopping. More than 50% of online shopping happens on mobile devices and revenue from mobile sales are expected to double in the 2015 holiday season. The growth of mobile ecommerce presents a huge opportunity for operators to breath new life into an existing profit center -- supplement sales. Though clubs have been selling supplements (and other fitness merchandise) forever in the form of an in-club store, using a mobile app to market and enable sales encourages members to buy more.

Clubs can use mobile apps to:

  • Enable supplement sales at any time in any place, even outside of your club's walls
  • Allow for a seamless transaction through using the member’s billing information on file to complete the sales
  • Send “smart” push alerts recommending a relevant supplement at the right time (for example, a protein supplement after a scheduled PT session or vitamins after lunch time)
  • Educate members on supplements and provide recommendations

Emerging services like dotFit take mobile supplement sales to the next level, taking tracked fitness data from your member’s mobile app and making personalized supplement recommendations based on the member’s fitness goals and activities. Making the sales is all about presenting the right product for the right buyer at the right time, and mobile makes this easier than ever.

free-netpulse-demo

3. Virtual Programs

The only limitation of selling personal training is the amount of members willing to make the financial investment and the amount of trainers that are available. What if technology could somehow extend them both?

Recently we’ve seen the growth of virtual programs -- lower cost training options where a member can interact with a trainer online, over the phone or through a mobile app, meaning they don’t meet in person as frequently. As a result, the costs (in regards to the trainer’s time) are drastically lower, and the trainer can service more customers simultaneously.

One can argue that these programs are less effective than in-person training because of the limitations that a virtual trainer has to correct form, constantly be motivating, etc. However, new technology is slowly breaking down those barriers as well. Consider Focus Motion, a set of sensors that integrate with the Pebble Smartwatch to track the form and count of an exercise. It can measure how many bicep curls were completed, and if the exerciser has proper form on each. That data is than sent wirelessly to a mobile app.

For club operators, consider the following options:

  • Hybrid programs where trainers meet with members less and interact with them via a mobile app more (thus delivering a simpler training package at a lower cost)
  • A very low cost model of full virtual coaching (e.g. a weekly phone call from a trainer at your club) for an additional $20 per month. It’s a fraction of a PT bill, but could still increase monthly memberships by nearly 60% based on the $35 per month industry average.

As an industry, we must be willing to embrace the concept of hybrid -- that is, offering multiple ways for members to consume our services from going into a traditional club to interacting with the club from home. The world is changing and technology is paving the way for the most innovative operators to win big. The results will continue to come in over the next few years as the fitness industry landscape continues to evolve.


Is your online presence strong enough? Check out The Ultimate Guide to Social Media for Health Clubs:

social-media-guide-banner

The Netpulse Insider Club

The pulse of the fitness industry,
one email per week.

Keep Reading

Club Management

See All Posts