The Disruptive Low Cost Health Club - Thoughts On Ray Algar's Global Report

At IHRSA and via Skype calls during the past year or more, I've had the chance to collaborate with colleague Ray Algar , principal of the firm Oxygen Consulting, about the changing health club market. I first mentioned Ray's research in December of 2009 and have subsequently shared my views on the changing marketplace and club business models since. I'm a fan of Ray's work and his report is included above. Many thanks to him for his kind acknowledgements of my contributions throughout. Visit his web site to share your views on the report here.
So what are gym or health club competitors to do as a result of the trends Ray's report and my research have outlined ? While many things can be identified, I am advising operators to focus on two key issues. The first I borrowed from leading marketing expert Denise Lee Yohn who says "Customer Experience Is Marketing". When it comes to how health clubs are going to survive the disruption of Low Cost High Value competitors, operators better get their hands around creating differentiating experiences or as Denise puts it "Operationalizing the Brand." The reason that low cost models are increasingly taking market share is that the general experiences members receive are not special or memorable and therefore price is becoming an overriding driver of choice.
The second thing to focus on is innovation. Health club brands desperately need to innovate by blending the digital and physical customer experience simply and seemlessly. Our culture is becoming digital and members seek experiences digitally and physically 24/7. The era of Digital Darwinism, when evolving consumer behavior resulting from advancing technology and a changing society are moving faster than competitors can adapt to it, is here today. The term was coined by author Brian Solis and is a concept health cub and gym executives should pay close attention to. Competitors that can figure out ways to elegantly blend personal and digital experiences well will create a competitive advantage.
So what do you think about Ray Algar's research report and the disruptive nature of the low cost high value health club and gym market ? Please share your thoughts with me, Bryan O'Rourke. Thanks again Ray for another great piece of research.
About the author Bryan O’Rourke:

Bryan O’Rourke is a health club industry expert, technologist, financier, shareholder and executive in several fitness and health club business service companies. He is also a partner in The Health Club For Women and Chairman of the Medical Fitness Association’s Education Committee. To learn more contact Bryan here today .

Planet Fitness - Why The Health Club Industry Should Pay Close Attention

Change is painful, ask any retailer or grocer that faced the onslaught of WalMart’s expansion in the past few decades. New business models emerge when there is a market opportunity and it isn’t very comfortable for any business owner to face the fact that they will have to deal with new progressive competition or go broke.

Enter Planet Fitness. I had been skeptical about the press and buzz I've heard on this low cost health club concept but recently took the time to acquire their latest 2011 Franchise Disclosure Document [FDD].

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