By: Michael Drucker
Bill McBride is the co-founder and CEO of Active Sports Clubs. He is an industry veteran in the field of health and wellness, and has served as the Chairman of the Board of Directors for IHRSA, a Board Member on ACE’s Industry Advisory Panel, and currently serves as a Medical Wellness Advisor for the Medical Wellness Association. Bill also sits on the advisory board of several other companies including Fit3D, Club Solutions, Club Industry and previously has worked with Zuberance and MiGym. Bill has been a mentor of mine for several years.
1) Given your vast experience in the wellness industry what are three universal truths in “getting it right” that apply to all fitness delivery (not just health clubs) that have surprised you in the sense that they are not industry standards?
- There is a lot of fitness delivery that is “contracted” on the assumption it is all homogeneous – a commodity. I need a clean “house”, so I hire a housekeeping company. I need fitness, so I hire fitness people. Fitness is very personal and people that are qualified and engaging are critical; but for a company, the brand delivery and standards that the brand represents are also critical. Getting the right people on the bus, training, and “enrolling” fitness delivery professionals seems to be a constant challenge in all aspects of fitness delivery (regardless of distribution channel). I am not surprised by this fact, but I am surprised by the slow progression in solving this problem on a broader scale.
- The true power of group fitness is often discussed and most people “get it”, but it hasn’t been truly leveraged as of yet. Think for example of “Debbie’s Class” – Debbie is a member. Why not have a class just for Debbie and her friends? Why not personalize group fitness further? This could be done with school mom groups, civic groups (Girl Scouts), and neighborhood friends that walk together, etc. Personalizing group fitness is rarely approached in this way. Approximately 44 percent of club members exercise with a friend. There is an opportunity there.
- I’m surprised by how many health clubs look the same in regards to layout and offering. The lack of true differentiation and uniqueness in the space seems intriguing. This is what Curves figured out earlier on. We need different configurations and approaches to bring in new members.
2) Why do you think the health club industry has not been more involved in the evolution of health technology? Only recently are you seeing health clubs really integrated with digital health devices, when the industry (as the experts in the area of wellness) could have had more of a hand in shaping these products?
Human nature seems to favor a scarcity mentality, instead of an abundance mentality. I think club operators were (or in many cases are) afraid of outside “competition” that could cost them members. Even my friends at MYZONE, whom I’m a big fan of, were reluctant to open their system for participants to download their data at home until recently. I asked them over 4 years ago to open their system because I wanted our members to download and see their data in real time. Their position back then was ‘no’, we want users to go to the club to download their data, this forces a club visit for our clients’ clubs/gyms. In their defense, they viewed their product as a club retention tool, not an activity increasing tool. While on the surface that may make some sense, just as scarcity mentality always seems to make sense in the short-term. But long-term, an abundance mentality always wins out. MYZONE came around and gave me some credit in their shift in thinking, but the world has already realized it’s a transparent, information-based reality now. Clubs have to realize this and embrace broader thinking as active lifestyles will always need professional human support.
3) You and I are both fans of Michael Porter. I just read Zero to One where Thiel builds off Porter’s ideas and suggests that the current entrepreneurial dogma of iterating off competitive ideas is a race to the bottom. In the book Thiel highlights using examples how perfect competition can destroy an industry. I believe a case could be made that is happening in the health clubs industry, especially anyone that goes up against the main chain operators. Where are people getting is right in the industry? Put another way, what are the common attributes of the players that are able to rise above the low cost health club model?
This is the million-dollar question. The high-end that can’t be replicated with ease (cost of entry too high) will always serve a consumer need: Exclusive, lifestyle, family and prestige based. These companies create an emotional bond, evoke status and its members are brand connected and in many cases for generations (think Four Seasons, fine dining, etc.). The low cost play will also have a steady stream (think fast food or Motel 6). It’s the accidental middle that are in the most trouble. Middle price point players with a strong value proposition (reasonable but not low price) and a very controlled expense structure can do nicely if engineered properly. Now for the current twist, we have the boutique offerings – not a high cost of entry, but a very high perceived service level. In this modality, I think boutique hotel (Kimpton or Joie de Vivre). These are high service offerings and very nice, but relatively small and some “nostalgically older”. The concepts that are too trendy seem to be short-lived. So anticipated trends versus modalities that stay around is another avenue of consideration worth thought. For example karate, yoga, Pilates and cycling have proven not to be trends. And how low can the low price point go? I heard recently of a $5 a month club. At some point soon, I expect to see a “free” club model with all revenues and profits come from ancillary programming like retail, clothing lines and ads within the club. Free with premium offerings, or a play like Pact where you actually get paid to workout. I agree with you that a large segment of the industry doesn’t appear to be working towards adaptation.
4) Guessing that you do not think this question is an all or none proposition, how do you think the rapid expansion of workplace wellness programs, and the emergence of open access residential wellness solutions, will evolve how (and who) is providing fitness delivery today?
There are many corporate wellness companies in the space already. The older ones are simply staffing agencies. Nothing wrong with that, but there is an opportunity for the health club management providers to play a much bigger role than they do today. Free fitness access is here in a lot of places and it will continue to grow. Parks, trails, in hotels, on company campuses and residential complexes – access to activity and fitness is going to continue to rise. Wellness is a nebulous term. What does that mean? Lifestyle engagement and promotion of activity through fitness, movement, sport and recreation will grow and prosper. The industry (health club or health club/fitness center management) must realize the genie is getting out of the bottle.. Think abundant solutions and total well-being, not just fitness and not just what can accomplished in a single space.
5) I know you enjoy the guesses of futurists and are an inherent forward-thinker. Regarding fitness delivery, you wrote a great article for Club Insider (Are We Asking The Right Question?) where you answered the question, “what will be the same in ten years?” Your argument for taking this approach was it is a more compelling question than “what will be different in ten years?” This is probably true; however, it does leave me the opportunity open to ask it, “What will be different in how we will deliver fitness in ten years?”
I believe the industry will be forced to morph from sales and marketing with great facilities (as the current historic primary focus) and more towards programming, coaching, wellness/medical services in very engaging environments. We will see different looking clubs (I hope) with much more holistic services and creative designs. I envision it to Lifestyle Centers …not just rooms with equipment, as those rooms and outdoor spaces with equipment will be commonplace by then. And not just studios to move around like we have today… It will be more about the “feeling” and “community”. This is where technology and wellness/medical integration will be game changing. I see more with wearables and digital health that support total well-being, disease management and prevention. Technology that can help people form and maintain habits, make activity/exercise more “fun” or “tolerable” and support individuals utilizing wellness professionals to improve their quality of life. A lot of people in our industry focus on results. Results are a by-product of a great offering. The focus should be on delivery and habits. I do believe that great structural design, warm & friendly social activity and innovative programming will always be around …just as we will still have hotels for rooms away from home, and great restaurants for good meals on the go …but there will be disruption like hotels saw with the shared economy (Airbnb) and restaurants saw with social shopping (Groupon). There are big things on the horizon and I am excited for the future.
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