Pam Kufahl, CI’s editor, and I spoke after Malcolm Gladwell delivered the keynote at the recent IHRSA convention and trade show. Gladwell had called for a revolution in the fitness industry through a “re-branding” of exercise. In order to reach the 84% of the adult U.S. population which does not belong to a fitness facility, Gladwell argued, exercise must be made relevant and exciting to them.
As I thought about the point, it became clear to me the fitness club industry needed more than simply a new label or marketing program. Fitness club operators must think differently about their business. They must come up with new and different answers to some fundamental questions:
- What business are we in?
In 1975, Theodore Levitt wrote Marketing Myopia, a provocative paper which is as relevant today as it was when it was first released. He argued, “Every major industry was once a growth industry…but the reason growth is threatened, slowed, or stopped is not because the market is saturated. It is because there has been a failure of management.”
Management must define their industry correctly, being customer-oriented instead of product-oriented. “It is constant watchfulness for opportunities to apply their technical know-how to the creation of customer-satisfying uses that accounts for their prodigious output of successful new products.”
Business must be defined by the value it delivers, not the thing it produces.
So I ask, is the fitness club industry in the fitness club business or are we in a business that has broader appeal and deeper meaning? Are we trying to increase memberships, or are we trying to grow people’s interest in fitness? Do we build physical locations that people go to exercise, or do we provide venues where people learn about and practice healthier lifestyles?
Rethinking what business you’re in would be a helpful exercise (pardon the pun!) for other currently stagnating or declining categories.
- Are fast food restaurants in the drive-through business or are they in the good food fast business?
- Are airlines in the transit business or are they in the business productivity business?
- Is the U.S. postal service in the mail and ship business or are they in the connected-communities business?
- Who is our enemy?
While it’s tempting to view competition as the business down the street, the reality is that the real threat to companies is usually far less obvious. In another classic resource, Eating the Big Fish, brand strategist Adam Morgan explains that the real challenge is “the central issue facing the growth, transformation, or survival of any given brand: the one critical point of focus.”
The “Big Fish” can, of course, be “the superior competitive position or overt aggression of a larger, better placed competitor” – but it can also be:
- the social context or popular opinion – e.g., soda in an anti- high-fructose corn syrup world
- the rules of the category rapidly changing — e.g., video games in the shift from online to console and back again
- new kinds of competition – e.g., retailers competing with mobile shopping and collective buying
- category commoditization – e.g., private label brand surge
As such, the real enemy in the case of fitness clubs isn’t simply the local gym with the better location or the emerging low-cost, high convenience facility concepts like Snap or Anytime. More likely it’s the computer (Nike Plus and Map My Fitness are just two of the many growing online fitness resources which meet many exercisers needs for tips, tracking, and community) – or perhaps it’s the couch (a body at rest tends to stay at rest!)
Every business needs clarity about who they’re challenging. And in some cases, Morgan points out, the real enemy is ourselves – our attitude, conservatism, structure. He explains, “comfort and protection lead to stagnation.” For market leaders especially, “the apparent security and real profitability lent by being number one in the market makes us loss-averse and protective.”
Although the Club Industry article addresses the fitness club industry specifically, I believe it provides insights for all organizations. After all, change is the only constant in business, and the best way to understand and determine how to leverage the power of change is to “think different.”