The rise of the low priced fitness club model has forced many traditional clubs to adjust their offerings and value proposition to remain viable. Low price clubs such as Planet Fitness can and do take significant market share from traditional clubs in their immediate geographic area. However there is a new club model emerging that can successfully compete side by side with low priced clubs and with traditional clubs, but with significant leverage in terms of cost to open and overall overhead and profitability.
A New Value Proposition
These clubs can be referred to as Group Training Clubs which have a completely different value proposition that resonates with many consumers even more than low price clubs or high end clubs with many amenities. The value proposition for these clubs is about guaranteed results through effective programming. Now many traditional clubs say they do this but the fact is their business model is not built around programming for results and they are not perceived to be results based facilities by prospects because their marketing is not built around this value proposition. Traditional club marketing focuses on price or amenities with barely a mention about results based programming. In addition traditional club programs often do not consistently produce results nor do these clubs hold themselves, their programs or their staff to a consistent standard based on member results!
Characteristics of Group Training Clubs
Group Training Clubs do offer memberships, but that is where the similarity to other clubs ends. The member pays a monthly fee (usually all memberships are month to month with little to no enrollment fees), and their fees allow them to participate in one, two, three or an unlimited number of group training classes each week which can be scheduled in person or online at any time via easy to use web based scheduling software. Classes are offered many times throughout the day and every day of the week, and many of these clubs offer a full money back guarantee if a person attends 2 or more classes per week. Monthly fees range from $79 – $199 depending on number of classes per week.
These facilities are small ranging in size from 2,000 – 5,000 square feet with a very simple set-up including lots of open space with a minimal capital equipment outlay and limited locker facilities and other amenities. The classes offered are thorough, rigorous and often include detailed instruction by a highly trained instructor along with other feedback such as heart rate monitoring to customize the workout to each participant. Since everything is program based there is consistency to the offering which puts customer loyalty with the club and program without the need to figure out which trainers do a great job!
Instructors are very well paid because they instruct groups of 5 – 25 people per class. At the same time these clubs provide a great value to consumers looking for assistance and coaching along with effective programming that produces results at a fraction of the cost of personal training.
Group Training Clubs usually go out of their way to obtain effective and compelling testimonials including before and after pictures which are the most effective marketing vehicles that exist, and thei entire marketing message is built around results through programming. In addition their sales strategy is direct and simple: try us out and experience what our program will do for you! After the prospect tries the program the staff simply asks them to consider what would happen if they committed to 2 – 3 classes per week for a month. This is in stark contrast to most traditional clubs where prospects trying a club usually end up wandering around the club with no clear idea what to do and no guidance.
Examples of this new emerging model include Orange Theory Fitness, Kosama, The Bar Method, Barry’s Bootcamp, LA Boxing, and a slew of one off examples.
The advantages of the Group Training Club Model from a business standpoint are:
Much lower cost of entry – many can be successfully opened with a $300K – $500K investment yet these clubs can be highly profitable with these clubs capable of grossing $500K per year
Powerful value proposition for the prospect – results at a fraction of the cost of traditional personal training
Ability to attract and keep highly qualified trainers because trainers can earn significantly more than in one on one training models.
The challenges to this model include:
The development of effective, scalable, and compelling programming that is refreshed regularly
Commitment to extensive trainer education
Location – as with all clubs location is king
Attrition – since most serious players in this category and still young data on attrition is sparse, but there is evidence to suggest that attrition may ultimately be higher than in traditional clubs with longer term commitment. Therefore ideally these clubs would be located in areas with regular population transition to make it easier to continue to attract new members over the longer haul.
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Greg Maurer
As the Director of Education for Sproing Fitness he created the education platform and training systems. This includes training Master Trainers to train and certify other trainers in the use of the Sproing Trainer for personal training, athletic training, and physical therapy.
His hard work, leadership, passion, and extensive knowledge of health and fitness give him the tools to launch new technologies in the health and wellness industry.
Latest posts by Greg Maurer
- Using Group Heart Rate Monitoring to improve results and sales of group HIIT Training - January 27, 2015
- Launching Successful Club Programs - October 9, 2014
- Group Training Clubs: A New Emerging Fitness Club Model - September 14, 2014
