Club Industry Consulting

Table of Contents

Introduction

Specialization

Tribalism

High Touch and Results-Driven Coaching

It’s All about Being Local

Real-Time Convenience

Iconic Leadership

Be Nimble, Be Quick

Intuitive and Fun

Asset Light

Consumer Friendly Pricing

Reflections

About ClubIntel

About ClubIntel Co-Founders

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ClubIntel.

“The process of creative destruction
is the essential fact of capitalism.”

Joseph Schumpeter

Introduction

The competitive landscape of the fitness industry, like the global business landscape, has

undergone a rapid change as a consequence of the various global forces associated with the 4

Industrial Revolution. The confluence of these forces, ranging from the Internet of Things (IoT)

to the sharing economy to tribal consumerism to

craft consumerism, have all exerted a never-before-

experienced level of business model disruption, or as

Joseph Schumpeter referred to, “creative destruction”. The fitness industry has not been immune

to these forces of creative destruction. Matter of fact, it has found itself weathering a series of

powerful storms, including budget clubs and boutique fitness studios.

In this report, we want to address what may be the most powerful of these destructive storms,

boutique fitness studios, and the powers we believe lay behind their destructive capabilities. In

2015, as reflected in Figure 1, 35% of consumers indicated they were members of a boutique

fitness studio; a significantly higher percentage than those who visit any of the more traditional

fitness business models (e.g.,

commercial fitness-only,

commercial multipurpose and

non-profits). Since 2013,

consumer participation in

boutique studios has grown by

over 70%, while at the same

time the percentage of

consumers who are members of

for-profit traditional fitness

clubs has grown by only 5%. In light of these dramatic shifts in fitness facility consumer

behaviour, it becomes imperative that fitness professionals understand the powers driving these

destructive storms. What follows is a condensed summary of each of these forces as first brought

forward in our presentation at the 2016 IHRSA International Convention.

22%

33%

16%

25%

35%

Figure 1

Consumer Fitness Facility Preferences

Percentage of Consumers Who are Members by Type of

Facility

Note that since a portion of consumers use more than one

facility the percentages do not add up to 100%

Commercial Multipurpose
Commercial Fitness-Only
YMCA/YWCA/JCC
Not for Profit
Corporate/Business
Boutiques Overall

“When you believe in a thing,
believe it all the way, implicitly and
unquestionable.”

Walt Disney

#1 – Specialization

In her book Riches in Niches, author Susan Freeman said, “No matter what or whom we’re

talking about, from movies to chiropractors to books to financial planners, the consumer hankers

after specialization.” Well, that hankering for specialization also extends to the world of fitness,

and is one of the forces fueling the appeal and growth of boutique fitness studios.

So why is specialization such a powerful and influential force?

For a fitness business it allows you to target specific customers, and just as importantly,

specific needs of different customers. By honing in on one product or experience, it

affords the operator the ability to do it better than anyone else. Walt Disney said,

“Whatever you do, do it well. Do it so well that when people see you do it they will want

to come back and see you do it again and they will want to bring others and show them

how well you do what you do.” Specialization speaks to doing it well, actually

phenomenally well!

For consumers they perceive specialization as a badge of expertise. Consumers regard

those who offer specialized experiences as having a level of knowledge and experience

that exceeds that of a business that does many things. They believe that with

specialization that talent is more focused and better qualified.

Consumers associate specialization with passion. Consumers perceive that the people

who offer specialized experiences love

what they do, and consequently it lends an

air of inspiration to the experience. This

implicit belief speaks to the passion that is

associated with specialization.

If you want to leverage the power of specialization, you first need to discover it. Kevin Stirtz,

author and strategy manager may have summed it up best when he said, “Know what your

customers want most and what your company does best. Focus on where those two meet.”

Finding this perfect junction of what the consumer wants most, and what your fitness business

“Smart organizations assemble
tribes.”

Seth Godin

does best is not easy. It requires an open mindedness about your businesses’ core capabilities,

and a willingness to use market research to explore what your customers want the most. The

failure to explore your customer’s desires, combined with a closed mind about your businesses’

core capabilities, is the surest way to failure when it comes to leveraging the market power of

specialization.

Tips for Leveraging the Power of Specialization

Use focus groups, surveys and performance data to research the behaviors and interests

of your members and prospects. Seek to understand what they want most, not just what

they want. There will always be one or two things that float to the top.

Assess the organization’s capabilities and identify where your strengths are. Identify

what your staff and your members believe are your greatest strengths.

Find out where your greatest capabilities and members’ greatest interests lay and that is

where you place your focus for specialization.

#2 - Tribalism

Seth Godin, in his book entitled Tribes: We Need You to Lead Us, says, “Smart organizations

assemble tribes”. He later goes on to say, “And it turns out that tribes, not money, not factories,

that can change our world, that can change politics, that can align large numbers of people.”

His point, and one espoused by many others in the business world is, that in today’s highly

competitive and copycat business landscape, tribal-driven brands rule.

What is a tribe? A tribe is a community of people bonded by a deeply held sense of purpose, a

compelling ideology around a given topic or practice, and a shared belief in each other. Tribes

require leaders who talk and more importantly, walk

the ideology of the tribe. Tribes are enriched by rituals

and traditions that celebrate their achievements, but

more importantly, reinforce the common beliefs and

purpose of the tribe. Tribes will frequently defend their beliefs in the face of enormous

challenges, and are most often evangelical in sharing their love for everything tribe. The

philosophy of the tribe, and ultimately the brand, becomes the philosophy of the individual, and

ultimately, the ultimate expression of self.

Seth Godin has said tribes can change the world. Well, if tribes can change the world, just think

what they can do for a business. Apple knows the power that tribes wield, so do Harley

Davidson, Lulu Lemon and Nike. In the fitness industry, CrossFit and Soul Cycle are all about

the tribe. In fact, not having a brand that promulgates a tribe, clan or cult in today’s world of

karaoke brands is the surest way to achieve anonymity in the mind of consumers. As Jane

Howard stated, “Call it a clan, call it a network, call it a tribe, call it family. Whatever you call

it, whoever you are, you need one.”

So, when you think of your club, or your studio, ask your self -“Does my brand cultivate and/or

appeal to a specific tribe?” If not, maybe it’s time to begin!

Tips for Leveraging the Power of Tribalism

Conduct research to determine if an ideology or belief already exists among a community

of members and employees. Look for shared beliefs that bring out passionate discussion

and alignment.

Find a leader for this community, someone who is incredibly passionate in their belief

and ready to lead the charge.

Create a platform that will allow the members of this tribe to communicate between

themselves. The club needs to keep its distance; instead allow the tribe and its leader to

take charge.

Establish a few rituals specific to the tribe that will allow them to celebrate their

uniqueness.

#3 – High-Touch and Results-Driven Coaching

Why is high-touch and results-driven coaching such an influential force for boutiques? Well, it

speaks to two of the most important needs that consumers have when it comes to purchasing a

membership or access to a club or studio.

Research shows that one of the leading reasons people join a fitness facility is to achieve

an expressed fitness or health-related goal. In the experience surveys ClubIntel conducts

for clubs, one of the questions we always ask is, “Has the club helped you achieve at

least one of the goals you had when you joined?” Inexorably, those members who

indicate that the club helped them to achieve one of their health or fitness goals (score of

5 on a 5-point scale) are the members who also indicate they love the club and will

remain a member. Boutiques appear to fulfill this powerful need of consumers by making

sure that every client’s need is

understood, that a program is in place

for them to pursue it and that

inspiration and support is provided by

both coaches and fellow members. One

boutique studio operator we know

refers to his team as coaches and to

himself as the head coach. He says their primary job is to understand what their clients

want to achieve and then provide them the guidance, inspiration and support to get there.

Second, today’s consumers want to know you care. Damon Richards may have expressed

it best, “Your customer doesn’t care how much you know until they know how much you

care.” Two questions we ask members in our experience surveys are: 1) Do you feel

management cares about you, and 2) Do you feel the staff care about you? In both

instances, when the members indicate a high level of caring exists, it correlates highly

with their love for the club and their desire to spend more, remain longer and finally,

become an apostle for the club. In our work, caring constantly emerges as one of the most

important drivers of value for members and/or clients. One boutique operator, when

asked why he felt he was so successful despite the presence of several close by big box

players said, “Our customers know we care about them, and they also care about us.”

If you want to leverage this unique power of boutiques, first begin by demonstrating you really

care. Second, learn what each client seeks to achieve and provide a personal platform for them to

achieve it. Leaving members to wander on their own after they’ve made their purchase, failing to

check-in with them regularly during their journey, requiring them to “pay more” for help, and

failing to provide a caring touch are all what puts most fitness operators at a disadvantage and

concurrently empowers boutiques.

Tips for Leveraging the Power of High-Touch and Results-Driven Coaching

Make sure that whatever you decide to specialize in that there is always a staff person

engaging with the tribe when they are in the club.

Provide a platform that allows everyone to identify their goals, track their progress and

results, and finally, recognizes them when they get there.

Make sure every touch point of interaction is personalized.

#4 – It’s All about Being Local

Buying local has emerged as a powerful consumer-

purchasing trend toward the end of the last decade

when consumers began to frequent retailers who had

a community-centric focus. Whether it was grocery

stores offering locally grown fruit and vegetables or

a locally operated book store that allows its

customers to sit down, have a coffee and browse till the sun goes down, being local became the

in thing, and it continues to evolve. Why is being local such an influential force for boutiques?

Being local speaks to two very important drivers of today’s consumers’ purchasing decision

hierarchy.

First, consumers want and expect authenticity from the businesses they buy from. They

expect the items, or experiences they purchase to be real, not fabricated. They also expect

the people and businesses they buy from to be genuine, not phony. Authenticity is

inexorably linked to trust. Trust in the business you are buying from, and trust in the

people who are delivering the offering. According to Joseph Pine and James Gilmore,

authors of the book Authenticity, when customers are deciding to buy, they judge an

offering’s and company’s authenticity as much as, if not more than price, quality and

availability. Being local speaks to authenticity, and even more so to the trust that can be

built from being authentic. Consumers feel that when the business is local, it is more

likely to know and understand them. This heightened sense of authenticity and trust is at

the heart of being local. It fuels the success of many craft products such as beers, hotels,

fitness studios and hotels.

Second, today’s consumers have a heightened desire to buy local, because it speaks to

supporting the local community. Consumers today want to support those who live and

work in the community rather than sending their money outside the community. When

consumers purchase locally they feel they are giving back to their community and

consequently, supporting those who make the community their home. Lastly, when

purchasing locally, consumers feel they are less likely to be taken advantage of, since

everyone has to live together in the same community. It follows the principle of

“everyone needs to have skin in the game”. When it comes to buying from your business,

they prefer your business be invested (e.g., similar values or charitable involvement) in

the community.

Just because your business is physically located in the community, does not mean it will be

perceived as local. There are lots of big box and small box businesses created and managed

elsewhere that do business in a community. Only when consumers see you as being authentically

local, trustworthy and most importantly, feel your heart is in the local community, will your

business be able to leverage the power of being local. As one studio operator we interviewed

said, “They know us because we experience what they do on a daily basis.”

“It’s about convenience and
maximizing customer’s time.”

Maria Brous

Tips for Leveraging the Power of Being Local

Get visibly involved in charitable activities that are important to the community.

Demonstrate that you are giving back.

Make your communications to the members and prospects community-centric.

Get to know your members intimately, which is what local businesses do.

#5 – Real-Time Convenience

In today’s world, where the Internet of Things dictates nearly every aspect of our lives,

convenience has become an imperative of the consumer experience. Ari Weissman of UX

Magazine said this of consumers’ lust for convenience, “In crafting customer experiences, the

perception of convenience is as important as the actual benefits of saved time and effort.” So not

only is an actual reduction in the time and effort of a

consumer’s experience with your brand vital, so is their

perception of how you will save them time and effort.

It is in here, in the world between actual and perceived

convenience, that boutique studios have a distinct competitive advantage over their more

traditional competitors.

In our experience, boutiques have three elements that contribute to their real-time convenience.

First, because of their specialization they are able to offer what consumer’s want multiple

times a day, every day of the week. While the client of a traditional fitness club might

have to reorganize their schedule to take an 11 a.m. class they want, for example aerial

yoga, the client of a boutique knows that if they miss the 11 a.m. class, they can take the

same class at 1 p.m., 3 p.m., 5 p.m., or 7 p.m. The fact that boutiques offer classes on a

schedule that fits the client’s lifestyle, rather than requiring the client to alter their

schedule, is a significant convenience. Not only is this convenience real, it is a perceived

one as well whenever a new client can check the schedule and see their favorite class is

offered six times a day, 30 times a week.

Second, boutiques have leveraged mobile, which today represents how the majority of

consumers, in particular the Millennial generation (the traditional core consumer base of

the fitness industry), seek out information and make a purchase. When consumers can go

to their phone, find their favorite class, book it and then pay for it, well what could be

more convenient?

Third, because of their smaller footprint (the average boutique is 1/8 to 1/10 the size of a

traditional club), boutiques can strategically locate themselves near where their clients

live and/or work. With the world becoming more urbanized (in the U.S. alone 81% of

people live in urban markets, a 12% surge in just the past decade) and Millennials in

particular, who prefer to live in an urban environment and take a subway instead of

commuting in a car, boutiques have a competitive advantage due to their small footprint

and ease of locating along urban commutes.

While it may be impossible for more traditional fitness businesses to replicate all three of these

attributes, they can definitely up it a notch when it comes to the use of technology, and the art of

scheduling to generate a higher degree of perceived and real-time convenience for consumers.

Tips for Leveraging the Power of Real-Time Convenience

Mobile-enable your members by making sure they can find, reserve and pay for the

classes and services they want, when they want.

Build your program schedules around what the members and prospects say fits their

schedule, not what works best for your staff.

Consider limiting what you offer so you can offer what members and prospects want

more often.

“Leaders lead when they take
positions, when they connect with
their tribe, and when they help the
tribe connect to itself.”

Seth Godin

#6 - Iconic Leadership

John Quincy Adams said of leadership, “If your actions inspire others to dream more, learn

more, do more and become more, you’re a leader.” His perspective holds as true today in the

fitness industry as it did nearly 200 years ago when this statement was first made. According to

Webster’s Dictionary, iconic references being widely recognized and well established for

distinctive excellence. Consequently, an iconic leader is someone well recognized for their

excellence, someone who through their actions provides the vision and inspiration to engage the

passions of their followers, and by doing so they are able to connect with their followers, and

more importantly, help their followers connect with each other. Seth Godin may have described

the influence of an iconic leader in the following quote, “Leaders lead when they take positions,

when they connect with their tribe, and when they help the tribe connect to itself.”

In our experience, not all boutiques have iconic leaders or founders, but those that do are able to

thrive in the midst of marketplace turmoil. Examples of iconic leaders in the fitness industry

(boutiques and traditional clubs), individuals who through the sheer force of their aura and

actions have enabled a passionate tribe include

luminaries such as Red Lerille of Red’s in Lafayette,

Louisiana; Joe Cirulli of Gainesville Health and

Fitness Centers, Gainesville, Florida; David Patchell

Evans, Goodlife Fitness, Canada; Greg Glassman,

Crossfit; Elizabeth Cutler and Julie Rice of Soul Cycle, and Todd Durkin of Fit Quest 10 in San

Diego. While each of these leaders is different in both style and substance, what they have

accomplished speaks to the attributes of an iconic leader, three of which are:

They believe strongly in something. In the case of the aforementioned leaders, they

believe strongly in the brand of fitness they espouse, whether it’s lifting weights,

functional training or group cycling.

They practice what they believe. They don’t just preach their ideology; they are out there

every day acting passionately on their belief.

“The enterprise that does not
innovate inevitably ages and
declines. And in a period of rapid
change such as the present…the
decline is fast”

Peter Drucker

They connect the members of their tribe with each other. They do this by embodying the

ideology and providing a platform that allows members of the tribe to connect with each

other. This might involve being seen in their facilities working with staff and clients,

writing a blog that is distributed to their followers, or regularly posting on social media

(for example Todd Durkin has over 22,000 followers on Twitter).

They construct rituals and traditions that help the tribe celebrate who they are and cement

the culture of the brand (e.g., Crossfit Games).

A great boutique fitness studio or any great brand needs to have an iconic leader. Sometimes that

leader can be more than one individual, as reflected in this anonymous quote, “When people

really participate, the trigger is not the cause, but a micro-community – the group of people they

already care about.”

Tips for Leveraging the Power of Iconic Leadership

Identify a leader, or leaders who are highly respected and sought after for their

knowledge and passion around the specialized offering.

Give the leader(s) you select skin in the game. Empower them with a sense of ownership

using accountability, responsibility, flexibility, and reward. Make it about them; give

them the freedom to make it happen.

#7 – Be Nimble, Be Quick

Today, because of technology and shifting generational values, what consumers want and what

they use can change in a blink of an eye. Trends that used to take years to evolve and garner

traction can now immerge quickly, and if your

business doesn’t respond quickly, then any potential

competitive advantage that could be gained by

leveraging the trend may be lost. Consequently,

today’s great businesses must be able to adapt like a

chameleon if they want to stay ahead of the crowd.

Jeremy Stoppelman, CEO of Yelp, said of this need to rapidly adapt, “You have to be very

nimble and very open minded. Your success is going to be very dependent on how you adapt.”

Our work with boutiques has shown us that they, more than traditional fitness facilities, and

especially those that operate multiple facilities, are significantly more nimble and quick in how

they respond to and leverage consumer trends. So what does it take to be nimble and quick?

Be open-minded, almost to a fault. Complacency and believing that what you have

always done will continue to work going forward is the first barrier to nimbleness. Open-

mindedness doesn’t mean you have to adapt, but it does mean you have to assess the

landscape, determine if adaption is required, and then act quickly on your decision. As

Albert Einstein so eloquently stated, “We cannot solve our problems with the same

thinking we used when we created them.”

Decide nimbly. The first challenge to acting nimbly is reaching a decision quickly and

then committing your resources to acting on that decision. Nimble decision making may

require creating a decision making process that allows you to use your experience (e.g.,

intuition) in combination with some hard facts. What it also means is cutting through the

bureaucracy that often stagnates decision-making. It is not about having unanimous

agreement on the decision; instead it’s about quickly building consensus with the caveat

that the leader should be able to override that consensus when it slows the process down.

Act nimbly. In Silicon Valley they talk about failing fast. Others might say succeed fast.

What would be more appropriate is to act quickly, assess quickly and then act

accordingly, again quickly.

Great boutique fitness studios, due to many factors, have the ability to see the business climate

more open mindedly than their larger more entrenched competitors, and furthermore, they have

far fewer bureaucratic processes to deal with to make a decision and act on it. As Peter Drucker

stated, “The enterprise that does not innovate inevitably ages and declines. And in a period of

“We aren’t in the information age;
we are in an entertainment age.
Tony Robbins

rapid change such as the present…the decline will be fast.” Rapid innovation is nothing more,

but also nothing less, than being nimble and quick.

Tips for Leveraging the Power of Nimbleness

Empower your team to constantly be on the lookout for trends. Provide a means for them

to explore, bring back what they find, and discuss it among the team in an open-minded

forum.

Consider establishing an internal innovation group that is responsible for seeking out

trends and innovations and then empower them to test these ideas unencumbered by red

tape and the fear of failure.

Incorporate change and innovation into your organization’s cultural fabric.

#8 – Intuitive and Fun

Intuitive design has become an integral part of how businesses look at designing and delivering

their products to consumers, particularly online experiences where consumers expect whatever

they do to be simple and self-explanatory. An intuitively designed experience directs people’s

attention, and therefore effort, toward tasks that are important. An intuitively designed

experience, such as a boutique fitness studio, is one that people immediately know how to do

once they see it. You could say that an intuitive

experience is one that requires little-to-no thinking,

only action. Boutiques do an outstanding job

leveraging this element of the fitness experience. Boutique users don’t have to create their fitness

regimen, they don’t have to build in progressions, and they don’t have to think what to do next;

all they do is follow the coach and off they go. Whether it’s the workout for that day, or for the

next eight weeks; boutique users only have to focus their attention on what’s important, and that

is giving their all to the workout. Jared Spool, a renowned lecturer and expert on usability,

software and design said, “Intuitive design is how we give the user new superpowers.” While he

was speaking of technology, it also applies to physical experiences such as working out at a

fitness facility. If all you have to do is do it, not think it, then you are likely to feel much better

about yourself and what you’ve accomplished; you’ll feel like you have superpowers.

Fun, takes intuitive to another level; it makes it entertaining and rewarding, as well as simple and

easy. Tony Robbins said about businesses and fun, “We aren’t in an information age we are in

an entertainment age.” Using a takeoff from a Cyndi Lauper song that said, “Girls just want to

have fun”; today’s consumers, especially fitness enthusiasts, just want to have fun. Fun, in this

case entertainment, can take many forms when it comes to boutique fitness studios.

It is not that boutiques are the only fitness facilities that can offer fun or intuitive experiences,

but by the nature of their size, there tribal proclivity, specialization and leadership, they are far

more likely to be able to leverage the entertainment element. It’s a distinctive edge to have in a

highly competitive marketplace.

Tips for Leveraging the Power of Intuitive and Fun

Create interpersonal competitions. This could involve weekly or monthly competitions,

or annual events such as the Reebok Games. It could also involve scoreboards that let

individuals know how their performance stands against others, such as amount of weight

lost, watts generated on the bike, amount of repetitions performed, etc.

Develop intrapersonal competition. This involves giving individuals the chance to

measure their present performance against past performance and specific goals. For

example measuring how their HR may have declined over time for a specific workload,

or possibly being able to do an asana they could never do before.

Create games people can play. This might involve conducting games of skill or games of

enjoyment, such as who has the most unusual workout attire or having client’s bring their

own playlist for class and selecting the best one.

Get involved in community activities. This could involve the members of the studio (tribe)

doing a habitat for humanity project together, or doing a team cycle ride to raise money

for breast cancer research.

Sponsor adventure outings. This might involve members of the studio getting together for

a weekend hike, or doing a white water rafting trip together.

#9 – Asset Light

Asset light refers to the principle and practice of not tying up significant amounts of capital

(cash) in depreciable assets, such as facility improvements and equipment or fixed operating

liabilities such as rent. Asset light businesses offer entrepreneurs and investors a lower barrier to

entry (lower capital investment costs), better return on their assets, lower profit volatility, greater

flexibility, and when scaled, additional cost savings. The two most significant attributes of

boutiques that contribute to their asset light competitive advantage are:

Smaller physical footprint. The average boutique fitness studio according to the

Association of Fitness Studios (AFS) research is 3,700 square feet with nearly 75%

occupying less than 3,000 square feet. On average, this is anywhere from 5x to 10x

smaller than the average traditional fitness facility. This significantly smaller footprint

results in lower build out costs (design and construction) and lower overall rent costs.

Less equipment intensive. The vast majority of boutique fitness studios don’t require

significant investment. A barre or yoga studio may spend less than $25,000 on fitness

accessories; a cycling or rowing studio between $25,000 and $75,000 for equipment; a

HIIT studio, if they use treadmills maybe up to $100,000, and personal training studio

probably less than $100,000. When you compare this to the $250,000 to $1,000,000 that

some big box clubs spend on equipment, it’s a pittance. The result is less fixed costs, less

debt and a financial operating advantage.

Associated with this lower investment in depreciable hard assets and fixed operating expenses is

a greater investment in human capital. While the fitness industry in general has moved away

from business models that leverage human capital, in particular intellectual and emotional

capital, boutique studios see them as a far more significant differentiator than the hard assets of

facilities and equipment.

Tips for Leveraging the Power of being Asset Light

Invest in your talent like you presently do your hard assets. If you allocate a percentage

of revenues to capital replacement, consider allocating a percentage of revenues to

education as an investment in the team’s human capital.

Shift your investment paradigm. Stop thinking of equipment as the engine that drives the

business. Make people the engine and equipment just a tool they can use to provide a

better experience.

#10 – Consumer-Friendly Pricing

The Internet of Things, in particular ecommerce and the emergence of mobile as a discovery and

purchase platform, has changed the consumer mindset when it comes to pricing. Today’s

consumer, especially those of the Millennial Generation, expects to find the price of everything

online. Just as importantly as finding the price of everything online, they also expect to be able to

purchase it how they want and when they want it. One outgrowth of this trend for consumer

friendly pricing has been the growth of price comparison sites, such as Price Grabber,

Shopping.com, TheFind and Kayak. Another outgrowth of this phenomenon has been the rapid

evolution of “pay as you go” business models and the decline in subscription-based offerings.

Mobile games, online games, and cell phone services have all seen their business model shift

from subscription to “pay as you go”.

The boutique fitness studio segment does an outstanding job leveraging these two aspects of

consumer friendly pricing; price comparison shopping and “pay as you go”.

Pay as you go. The vast majority of boutique fitness studios offer consumers a host of

pay and use options from single sessions to five packs to 20 packs to unlimited monthly

usage. No annual contracts, and in most instances, no agreements of any kind. Just

purchase a single session or package of ten and off you go. It is the perfect blend of pay

for what you want to use when you use it rather than subscribe to something you may or

may not use. In a survey of boutique operators conducted by AFS in 2015, it showed that

the average boutique fitness studio offered a variety of purchase options, most of which

are “pay as you go” models or more appropriately maybe, “pay for what you plan to use”

models.

Price comparison shopping. Boutique fitness studios are transparent in their pricing. Visit

any boutique fitness studio site and you can see what they charge for a single class, five

pack, etc. A shopper can simply price compare across boutiques because they can easily

find the programs they want, and the prices associated with those programs based on

varying levels of planned usage. Recently a price comparison site for gyms, including

personal training studios, has emerged called Gym Snoop. It probably won’t be long

before other sites emerge that leverage the transparency of boutique fitness studio pricing

and offer comparisons similar to Kayak. The point is that by making the pricing and

packages transparent, boutique fitness studios make it easier for consumers to price

compare.

Nearly 150 years ago Oscar Wilde said, “Nowadays people know the price of everything and the

value of nothing.” Well today, consumers expect to find the price of everything, and boutique

fitness studios make it much easier for them than the more traditional clubs that still require

consumers to come in and barter. On top of that, boutiques don’t require a subscription; you can

pay for what you want when you want.

Tips for Leveraging the Power of Consumer-Friendly Pricing

Make all your pricing 100% transparent. Don’t hide prices and don’t make people have

to ask or guess what something costs. Get it out in front of them.

Get your prices online and mobile. Everything you charge for needs to be conveniently

accessible online, including being optimized for mobile.

Build in a “pay as you go” structure. You can still offer a subscription-based purchase

model, but give members and prospects who want to purchase what they want, how they

want to, and when they want to.

Reflections

The boutique fitness studio business model is an entrepreneurial outgrowth of the forces of

creative destruction that are sweeping the business world as a result of a confluence of economic,

social and cultural changes. These powers of boutiques are not to be trifled with, as they reflect

value-drivers that nearly any fitness business can leverage to thrive in the future.

Photo courtesy of the Edge, a boutique fitness studio owned and operated by Atlantic Coast

Athletic Clubs, Charlottesville, Virginia.

About Club Intel

ClubIntel is the club industry’s leading consumer, member and brand insights firm. Using a

unique approach to understanding the club consumer, we help associations; clubs and equipment

manufacturers understand, appreciate and leverage consumers’ needs, wants, and personal

journeys, leading to a more loyal member base, happier employees, and long-lasting profitability.

Everything we do is driven by our belief that human connections are the longest lasting and most

profitable. Our services are designed to help you uncover and capitalize on the most powerful

drivers of brand loyalty and the member experience. Our approach, which is uniquely human-

focused are built around:

Insight

Data can tell you a lot, but it can’t speak to you. We have the instinct and experience to decode

the numbers and tell you what your members and employees are really saying.

Inspiration

Finding the intangible qualities that turn members into brand fanatics, and employees into

apostles, takes an empathy and passion you can only find here.

Impact

Our unique, human-focused approach has helped clubs and manufacturers across the globe reap

the benefits of increased member loyalty, higher employee retention and productivity and greater

business profitability.

About ClubIntel’s Co-Founders

Stephen Tharrett, Co-founder and Principal

Stephen has worked domestically and internationally across nearly every segment, including

health, fitness, golf and country clubs both public and private. From

2008 to 2010 Stephen served as the Chief Executive Officer for the

Russian Fitness Group, a privately held health/fitness club company that

was at the time the largest in Russia. He spent 20 years with ClubCorp, a

billion dollar private club company based in Dallas, Texas, where he

served in several roles ranging from director of athletics to senior vice

president for operations. He is a former president of the International

Health, Racquet and Sportclub Association, having served as president of the international

association from 1996-1997. Stephen currently serves on the advisory board for Club Industry

Magazine and the Association of Fitness Studios.

Mark Williamson, Co-founder and Principal

Mark has more than 20 years’ experience in market research, and consumer insights, including

17 years within the club and hospitality industry at ClubCorp USA,

which comprises an elite collection of private golf, country, business,

sports and alumni clubs. He also lead Consumer Insights teams for

industry-leading restaurant brands such as Applebee’s, Chili’s,

Maggiano’s, On The Border, Romano’s Macaroni Grill, and Corner

Bakery. Outside of the hospitality industry, Mark led the consumer

insights team at match.com and owns his own small research consulting

business, Retention Measurement