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How Operators Can Prepare for the Impact of Coronavirus

There is no doubt that the fitness industry is experiencing a period of profound change against the backdrop of Covid-19. Fitness operators around the world are trying to figure out what a “new normal” might look like all while protecting cash flow and retaining staff. We spoke to Ian Mullane, the founder & CEO of about his predictions for the fitness industry after coronavirus lockdowns are lifted, and what critical actions operators should take now to prepare themselves for a post-COVID environment. We spoke to Ian about:

  • What fitness operators need to do now
  • How changing consumer behaviour will impact the industry
  • Whether the club revenue model will change in response, and
  • What opportunities are being created

What should fitness operators be doing now to prepare?

Be realistic. While opportunities will be created, there are a great deal of organisations that will not come out of this. We have more data about the situation than we had before, so understand this data and create a plan. Build scenarios to evaluate your approach and if you determine that your business may not survive, plan a structured exit.

That said, the increased number of customers using digital alongside the establishment of new consumer habits can present increased opportunity. If that is the case for your business, be in a position to take advantage of this trend rather than coming out of the lockdown passively surviving on furlough payments.

How should an operator be communicating to their members during this time?

This could be the greatest presale of all time, but to take advantage of this, you need capital to market your business. Your messaging needs to align with what people want to hear in a post-COVID era. Interestingly, many operators have decreased social media communications at this time, which is a mistake. You need to be upping your engagement.

Every operator needs to be realistic that they will likely have 30-40% fewer customers at the end of this.  In all communications right now, it is important to help customers understand that your business has their health at heart. For those that do come back, health and safety will be a critical priority. Members will need to feel that the gym is a safe place and your communications will play a big role in establishing this message.

It also needs to be clear why your organisation still represents something that your members want to be associated with. They’re also going to be looking for operators to instill confidence in their brand and business. They need to be assured of the longevity of the product and brand so they can feel good about making a commitment.

How will consumer behaviour change to digital/virtual fitness impact the industry?

People will be more aware digital offerings. They now have more time to investigate and research and try them out. That said, it doesn’t mean that everyone who has tried digital content will want to continue with that relationship when gyms can reopen. I believe digital will be complementary to bricks and mortar gyms. There is no doubt that people will continue to go to the gym in future for the community and for the specialised kit not available for home use.

Also, gyms should not underestimate the strength of good coaching and instruction. Personalization will always be valuable especially to novices, but also to those who are more capable and looking to get to the next level.

My advice is that operators should not spend the next six months trying to figure out a new offering. When they can reopen their doors, it is not going to be the digital offering that will make the difference between success and failure. They’ve had that option for months. It’s going to be about community.

Digital is not easy. It’s expensive to do it well and it requires big resources. There is a reason Peloton is described as a media production company. Behind the scenes, there could be 20+ people involved in a single 45-minute class. Focus on what you can offer within the four walls of your facility because that is your differentiator.

Will the club revenue model change in future?

It was a massive error to pause people’s memberships when the lockdown started. Some clubs who gave people the option to pause or keep paying retained more than 60% of their monthly revenue!

The reality is that the membership model is the right model. The lockdown is a “black swan event.” It is the first time in 75 years that society is no longer in the same form as it one was. The membership model does not need to be changed.

Of course, operators are experimenting with different models like pay-as-you-go, credits or packs of visits/classes, but I do not think this is the right model. The membership model is basically a payment plan for an annual gym membership, and it makes sense. Even after gyms reopen, it’s likely we’ll see another lockdown in 2020. Rather than change the model, an operator’s priority should be to survive the black swan event.

What opportunities do you see being created as a result of this disruption?

There will be numerous consolidations and mergers within the industry. There will  also be an opportunity for operators to investigate bringing in the strengths of the product offering of boutiques into larger operations since there will be many boutique styles that will not survive due to lack of cash on the balance sheet. Don’t try to sell old product again. This is an opportunity for operators to understand how to reposition their business for people who can no longer go to their favourite boutiques.

To hear more insight from Ian, hear him on the Escape Your Limits podcast here.

For more information on his business, Keepme, click here.

Posted in The Fitness Network.