Let's Define Globalization
"Globalization", just the word itself looms large. As well it should - globalization is a phenomena that encompasses the entire planet. It affects clubs from the American Midwest to the Brazilian pampas. For those club operators that take notice, globalization allows them a worldview with the ability to embrace the true scope of the fitness industry. One that lets them take advantage of the latest global trends and strategies to integrate right into their own neighborhood operation.
With the effects of modern technology providing such fast travel and even faster communication, it really is a small world... and getting smaller every day. But there are still a lot of physical miles on the map!
Through our role at CMS in helping independent club owners across the globe, this perspective is something witnessed first hand. We've recently been to Indonesia to speak with about 150 club owners there. In Australia, over 500 club operators shared their experiences. Last October, we were able to network with about 3,000 German operators.
Coming soon will be a twice-annual trek to the Scandinavian countries of Sweden, Denmark, Norway and Finland. Our office is in daily contact with club owners in 42 countries. Not only does this put us on a first-name basis with Delta Airlines, but also allows a constant, real-time personal experience of the evolving club industry from a very broad perspective.
From this rich broad field of data gathering, we've observed certain patterns emerging and now want to share with you the eight greatest global trends, challenges and conclusions facing the club industry today.
I. The Eight Greatest Global Trends
Trends can be big or small, local or worldwide. For the club operator, the key is not in the recognition that "power walking" is becoming popular in Italy or that "spinning classes" are starting to gain ground in Iowa. Details like that are certainly important, but the value of a true global perspective is to embrace-and respond to-the larger, more general movements that are effecting our industry.
Global Trend #1: Women Are Key to Success in the Club Industry
This was not always the case. In fact, it wasn't too long ago when women weren't even invited into health clubs. Even such prestigious clubs like the Los Angeles Athletic Club only started allowing women members in the early 60s. At that time, another club in the city, The Jonathan Club, didn't allow women to so much as step foot across the threshold. And although they shortly gave way to mixed-gender memberships, their participation was severely restricted. Female members couldn't get past the third floor. During this era, it was more an act of "tolerance" than of "welcome".
For the average club operator today, that kind of mindset would be suicide. Yet not too many years ago, excluding women was standard procedure. What happened? Well, attitudes - and trends - changed.
By the middle of the last century, "health clubs" as we know them today carried a strictly masculine popular image. When a person went to the "club" to work out, that meant they were going downtown to some gritty brick building (usually accessed through an iron, soot-stained alley door). There, they'd lift iron weights and grunted along with their other sweaty, muscle-bound buddies. Any mention of group exercise classes or treadmills would result in blank, uncomprehending stares. You may as well have spoken Martian.
Clubs were male-dominated, bodybuilding gyms. Anything resembling our modern concept of a fitness club with established programs or personal training was dismissed as "prissy" resorts for the pampered rich in places like Beverly Hills or Palm Springs where celebrity guests soak neck-deep in mud baths.
You've Come a Long Ways, Baby
The last forty years or so has seen the whole public awareness of health clubs move further and further away from a singular focus on body-building gyms. Clubs now embrace a nearly infinite range of fitness options. Fast-evolving countries have fallen into this trend, one after another. Today, women make up more than half of the entire phenomena of fitness.
Women all over the world have emerged as their own personal athlete in knowing-and going after-what they want out of fitness. That means anything from putting on the headphones and start running down the street to exacting personal training, or attending regular group exercise classes. This trend has been an absolutely critical factor for the success of overall clubs today.
Club operators MUST understand what the woman needs as a customer. Consequently, they must also understand the differences between what each gender wants. The woman and the man do not need the same thing, nor do they want the same thing. They're different types of customers.
Gender Preference: Venus vs. Mars
Beyond the obvious, this difference is aptly illustrated in the fact that 85% of all participants in group exercise classes are women. Why? Well, group exercise classes fulfill the all-important wants, needs and desires of those attending. She wants group interactivity with other adults. She generally desires some structured instruction. She needs that social interaction as a stress reliever because, at least for the mothers, they've been taking care of young kids all day.
Men, on the other hand, resist instructors and may want to get away from other adults and like working out alone.
Accept this trend as one that's unlikely to go away. And don't despair that you have so few men attending group exercise programs. It's just the way it is. Trying to buck this trend would be forcing things. Just keep your members happy by accepting what they're doing when it comes to gender preferences.
Group Exercise: The 50% Factor
It's far more important to keep an eye on what percentage of your total membership is using or participating in-group exercise classes. Don't settle for any target less than 50%. If there's not at least half the membership participating in a group exercise classes, your aerobics or group exercise directors are in many ways failing. If you do have 50% or more, you know you're fulfilling the wants, needs and desires of the women in your community marketplace.
If only 10% of the entire club membership attend classes, that club's failing the women badly. And any competitor that sees those numbers will build a really good group exercise program and attract away half your members.
Once again, women are key to success in the club business. And this is true in virtually all countries in the world, even those with predominately conservative religions, thus the women's only club.
Global Trend #2: New Players, Big Money
The old players have mostly built this industry. They were the true believers; the people who got their degree in physical education, found a way to raise a little bit of money and decided to build a club.
The new players today are multinational corporations, such as Virgin Atlantic coming in with a couple hundred million dollars to develop health clubs all through the UK. Companies heretofore that have never been involved in leisure and recreation are now investing huge dollars in the acquisition and development of health, fitness and other athletic clubs.
Their objectives are different than those of the independent club owners. The independent club operator has a dream to start their own business. To convert their passion to their work, their avocation to their vocation, and somewhere along the line, to make money. The corporate dream-indeed, the corporate imperative-is to improve the share value of its stockholders. Period. Anything less and the corporation is failing the all-important stockholders, invested venture capitalists or mortgage bankers. All decisions are based on how to boost profits at almost any cost. Pesky expenses like customer service are readily sacrificed with a big box mentality. It's becoming more common every day.
We're a "Personnel-Intensive" Business
Today we see investors that are as far removed from the industry as can be imagined, jumping eagerly in and convinced they can make a success of things. Certain their empires can make a run on it financially. There are real doubts that this will continue indefinitely. Soon, these companies will realize that the club industry is really a local business. It is not a crackerjack box that can be thrown up anyplace and made to work. The truly successful club business is dependent on interpersonal relations; therefore it's personnel intensive. It's dependent on capital reinvestment; therefore it's capital intensive. And stockholders don't particularly like personnel and capital-intensive businesses because they tend to eat up the profit.
The Hybrid of Tomorrow
This trend of new players with big money will actually help our business as a whole. By growing it, creating a greater public awareness, and also bringing all manners of varied professional practices that will upgrade the industry because of the money they're putting into it. Nevertheless, a lot of the bigger public corporations will eventually back off when realizing the huge commodity-type profit margins just aren't there. Once these companies privatize back, we'll be left with a sort of midrange model. It won't be totally corporate, yet it won't exactly be Mom & Pop.
Global Trend #3: Network To Survive
A key issue to survive in our business is an imperative to network with each other. This is especially so for the independent club operator. If you're an independent club operator or dream to be in your own business, aspire to own or manage a club, you must network with associations such as IHRSA, Can-Fit Pro and BodyLife.
It's critically important to read trade journals, to belong to other associations, and to go to the latest educational and training programs. Club operators need to tie into some kind of network to join forces and become competitive with the chains. Getting together and pooling resources by networking empowers the independent club operator and is a very major tool to future survival.
Globalization: Embracing The Global Neighborhood Part 2
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