Naysayers keep telling us the industry as we know is dying – are they right?
Reece works out with Richard Beddie
I recently worked out withRichard Beddie, the current CEO of Exercise NZ and REP’s. Richard is formerly a club owner from Christchurch. We worked out together at BodyFix in Christchurch. Here’s what he had to say and my ‘takeouts’ from the conversation.
Richard and I discussed many things during our workout – the most compelling discussion was one we had around presenters in the fitness industry talking the current operating models down in favour of the growing trends – particularly from the US. This was very timely for me and Richard as we were both about to attend the Filex Convention in Australia where many presenters describe themselves and challengers and disruptors to the industry.
Their basic premise is this according to Richard “the current model is broken – if you want to survive – change or die! The middle is dead – if you’re not premium or not budget you’re in trouble”
Richard made a really interesting point – “ What these commentators pre suppose is there is just one answer for the future rather than a natural cycle of a maturing industry. That might be at the high end – it might be at budget end – but it might be in the middle.” “Let’s look at the restaurant industry – throughout New Zealand it seems to be thriving – there are high end restaurants booked out and low end offering equally as busy. There are also operators in the middle – it copes.”
“It is about differentiating yourself” Richard suggested.
“Service alone as a differentiator however is not enough. There must be a true differentiator – it might be your unique offering, it might be you.”
Takeout # 1: Whether you are top end, budget or in the middle – find what you are good at, make sure that you are, practice like heck – and go like hell.
Forever the pragmatist Richard was looking for an takeout from the naysayers – “If there is one thing we can learn from the naysayers it is in the area of price. If you’re towards the lower end of the price continuum but not the cheapest you are at risk of being beaten. So if low price is part of your primary messaging – there is a risk. It is not a defendable position”.
“Even the low cost airlines offer premium – Jetstar have business class. Why might they do that. There are people who are prepared to pay more for something that is uniquely different. The product is largely similar – it’s a seat on an airplane going from A to B. But the price can be four or five higher if you select their premium offering.”
“The experience of CityFitness are able to offer a price point of $6.99. Their facilities are good. They do also offer higher priced membership offering – and plenty of people are taking that up as well.”
Takeout # 2: Is there something in your club you can charge more for? Are the days of a one price fits all model gone? Could you create a ‘premium’ membership offering?
Richard goes on to pose the question – “Is the industry dying? No – all the research is showing the market is not shrinking. The market is growing. So, if the market is growing and you are not, there is still an opportunity for you. There is plenty of examples around the country of independent operators still growing in thier market – which goes to prove it can be done. How do you do that – find out what you do particularly well and exploit the heck out of it.”
The naysayers will have you believe that the existing operating model is dead or dying. They often quote the huge growth of boutiques in particular as an example of where the industry is heading. Ten years ago we were all quoting the returns Soul Cycle were achieving with their class based model. They were extraordinary. Emma Barry gave a very insightful presentation on this at Filex. She had noted that the truly successful boutiques were geographically specialised – New York, West Hollywood, Bondi and London Central. Outside of those areas the boutique model was not a guaranteed success. If you haven’t been following Emma Barry, you should. She has been involved in some of the biggest success stories of the industry – Les Mills and Equinox – and is now an observer and commentator on the industry.
That may mean that you have to ignore the ‘latest trends’ to some degree – maybe they just don’t fit your model. Be aware of what they are but that doesn’t mean you have to follow them all the time.
The common theme inherent in successful businesses is understanding what you are about and doing that so well the people just can’t get enough of it.
That being the case – I asked Richard about his thoughts for Council facilities or YMCA’s for example. “These types of facilities often they talk about attracting the “traditional” non-exerciser (if there is such a thing). EG older people, families, unwell. They may well leverage off the aqua facilities. Use the basketball courts. Young teenagers wanting to exercise – either for their chosen sport or encouraged by parents. As children opt out more and more from traditional sports activities – they are encouraging gym exercise. Can you create a product/programme to support these groups? Often this is not the majority of your total market – but there will be certain times of the day that suit targeted groups. Sport NZ have identified teenage girls are a target group that certainly fall into this category.”
This is an interesting takeaway for providers who may wish to cater for a wider segment – wider than the traditional gymgoer in particular.
“Structured sport participation has been dropping world-wide as well as in NZ. We are a nation that likes to be active. This is as evident in adults and becoming more evident with teenagers” Richard went on to say.
This comment struck a chord with me. I have two teenaged daughters. Both have been relatively active in organised team sports up until this year really. They are almost 16 and almost 18, now they both play social netball, coach junior teams and go to the gym several times a week. Historically they may have been asked by adults “What sports do you play?” perhaps we should be asking how do you stay active. What things to you do to keep yourself moving? Maybe my daughters were just waiting until they were old enough to attend the gym.
Is going to the gym a sport?
As we have been saying for a long time now – going to the gym has actually become the largest participation sport in the world. In New Zealand more people identify themselves as gym members than belong to rugby, soccer and cricket clubs combined.
The final word on naysayers from Richard
“Do the naysayers have a product to sell? If they start pulling down the current status quo – and their solution their own product or service. You have to question the motives. It doesn’t mean what they are saying is not right – it does however mean they ‘may’have a vested interest in the solution. It doesn’t mean they can’t add value – it ‘may’mean that the solution is a single solution and that may not be the case”.
Takeout #3: Seek advice from as many areas as you can to help your business succeed. Often there is not a single solution. To determine what might fit in your operating model, you have to be very clear about what you operating model is. What do you want to be famous for?
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