Health Clubs

Animate your health club with a new strategy

From 36 percent to 89 percent. According to Gartner Research, 36 percent of enterprise CEOs in 2011 said customer experience is the dimension on which they are now competing. That number jumped to 89 percent in 2016.

These CEOs of major companies are saying that customer experience is the battlefield, and having a strategy to win on that battlefield is imperative. I suspect that in the next three years, the percentage of CEOs who say that customer experience is their differentiator will rise to 95 percent. But why, and why now? What is happening that providing a customer experience has become so imperative for so many companies? Haven’t they always focused on customer service? Yes, they have. So when they talk about a customer experience strategy as a new competitive dimension, they are talking about embedding the customer perspective into every cell of the company and creating a unified (i.e. whole company) approach to understanding the customer.

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The very nature of strategy is that it animates an organization. When you have a unifying vision and strategy and electrify it with the right customer information, your decisions will be different. That sounds simple, but it is where differentiation begins. Your decisions will be different than they would have been had you not adopted the strategy. In other words, if you have not created a unifying customer experience vision and strategy, and you have not adopted the discipline to track and manage its progress, you are getting left behind. You become the guy or gal who is in a highly competitive race but is unaware whether you are running first, last or somewhere in between.

When you consider why there is such a massive push on customer experience, you might come to the conclusion that it is because of the proliferation of social media in all its forms — Yelp, Snapchat, Facebook, Instagram. Pinterest, Google+, etc. — and that these companies want to make sure they look good. Although improving social commentary is a nice outcome, it isn’t the main driver. The drivers are market share, revenue growth, same-store sales, share of wallet, margin and all of the usual suspects. In fact, I would sum up many of these companies’ approaches to social media as “Be a great company on the inside, and it will show on the outside.” Looking good on social media isn’t a driver; it is an outcome.

What business owners are recognizing is the parity in the normal business functions among their competitive set. You better be good at marketing, finance, human resources, etc. You probably wouldn’t be around if you were not good in those areas.

Moreover, all of these normal business functions are operational. This means that they have numbers and metrics that guide the day-to-day and give goals for the future. Someone at the top of the food chain takes ownership of these functions and ensures their success. This is simply the ante to being a good company.

Managing the customer experience is the ante to being a great company, and someone has to decide to make customer experience a strategic objective. That person is the CEO, president or owner in the case of many smaller companies.

Once that decision is made, aggressive action should be taken to break existing inertia. Set big goals — net promoter score (NPS) is a good one — measure and monitor all of the NPS key driver metrics on a day-to-day basis, respond to every single customer that provides feedback, get multiple people involved, establish a company-wide vision with hard edges on understanding when and how you will reach it.

The worst mistake I see is when company leaders take a tactical approach to customer experience. This usually takes the form of testing whether one’s teams are willing to adopt and execute the new operational disciplines that it takes to make a strategy work. If their teams lack the interest in adopting the day-to-day disciplines, then these leaders capitulate. Strategy is not a trial balloon. Strategy is not decided at the front line. It is executed at the front line.

If you are a CEO, president or owner, if you own one club or 100 clubs,you are the strategist, and it is you who will determine whether your strategy gets adopted or fizzles.

There is a race going on. We are all in it, and there is a tremendous opportunity to differentiate your company. We estimate that only 2 to 3 percent of fitness companies are ramped up in their customer experience management discipline.

I had a fantasy while flying to Orlando…

Alaska Airlines flight 16, seat 8F.  Heading to Orlando.  Medallia’s annual event is always incredibly stimulating and fun.   But right now I am waiting for someone to pick up the remains of my small “Tapas” snack to allow me a little more room to type.  If only my forearms were 3 inches shorter I could type without deforming my hands.   It seems that every flight in the last few years has been 100% booked.  This must be very good as far as I can tell for the airlines.

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But let’s forget about what is good for the airlines for a minute and just think about the experience of flying and how one might design a far better flying experience.  There are 178 seats on this flight, 12 of them in first class.  I wonder what the math looks like if instead of every coach row having 6 seats, every row had 4.  And instead of 27 coach rows they were reduced to 24.  Removing some 66 seats or 37% of the capacity.  How much more would the airline need to charge per ticket in order to have higher margin than they have now?  How much more would the customer be willing to pay?  How many of these customers are out there?   Would the price of a seat need to be the same as it currently is for a first class ticket?   It doesn’t seem so.  First class tickets (of course I am not talking about free upgrades) are priced 2-4 times a coach ticket.  I have no idea what the calculus is for determining all of the different fares but they seem quite varied.

With the removal of 37% of the seats could the airline charge 50-60% more for the ticket?  It sure seems like there would be a market for this.  At least the math works if the customers are there.  GOOD LORD I would buy that deal all damn day even if it didn’t come with free food and beverage!  It seems it would AT LEAST be worth an experiment.  Every airline seems to be chasing the exact same space – make more money by crowding more people in.   This assumes that what people value is simply cheaper fares and moderate service. I wonder what would happen if an airline decided to attract people who value SPACE and excellent service.

Here is what the boarding experience might sound like:

“Hello folks, this is a completely full flight today but no worries, you are flying our new ‘Respect Class’ and there is no need to be anxious about overhead space as you are guaranteed to have your very own space over your designated seat!”   

“You will also enjoy 7 inch wider seats, 7 degrees more recline and 4 inches more leg room than our standard flight.  The center isle is 24 inches instead of 18 inches so you can avoid those awkward moments to and from the lavatory when you must decide which side of your body you will thrust into the face of the poor bastard in the isle seat in order that another passenger may pass.”   

“Speaking of lavatories! Ours are occupied on average 37% less and are 6 inches wider than standard in order to prevent those painful shoulder dislocations required in most airplane lavatories.” 

“Your Internet connection will be 37% better and we predict you are 37% more likely to have an outstanding experience. If you do, please don’t be shy about posting comments out there!”

“Also, since there are far fewer of you, boarding and deplaning takes about half the time as our standard flights.”    

Okay, that’s my fantasy and if you have flown much lately you know why this is my fantasy!  There are certainly exceptions to the “always bad to mediocre experience” and they seem to occur when I fly Virgin America, or I buy (or get upgraded) to first class.  It is amazing how much better the flying experience can actually be.

Now think about your health club.   People experience the same anxieties in overly crowded clubs as one does on overly crowded flights.  Things like attending a class, getting into Team Training, having an open treadmill, finding a vacant locker, taking a shower, having kids get the attention needed in the Kids Club, all of these things have increased value when a club is not over-crowded.  My hunch is that with the proliferation of high-volume/low-price clubs, there may be an opportunity for growth in the higher-price and more-space model.  How might you capitalize on having all your members fly “Respect Class” instead of what coach class is becoming?   Look, I sure don’t have the answer here.  I am just positing the question.  But I do know that I’d pay for this flying experience every time.