Chuck Runyon And Bifurcation - You Gotta Love The Guy's Style

There are some leaders in the health club and fitness industry I really admire. The admiration might come from their accomplishments; who they are as people; or because of their generosity. Few stick out for all three reasons and that is why I was delighted to have some face time with Chuck Runyon, co-founder of Anytime Fitness, at IHRSA this year because he is someone I admire for all three.

Chuck Runyon has an almost "rebellion" like style . His active participation on twitter and of course his at times outspoken views are appealing to me. He's someone who likes to shake things up. Whether its been as part of the Public Policy Council of IHRSA or via his writings or tweets; you gotta love the guy's style.

It was a number of weeks ago while visiting the EU and in advance of IHRSA when Chuck addressed my “bi-furcation” trend via twitter  (see the exchange with Stuart Goldman below). Chuck tweeted “I disagree & the industry is experiencing segmentation in 4 distinct areas not 2 Call it quadfurcation.”

“Bi-furcation” is a well documented trend which author and consumer researcher Michael Silverstein defined and which a wide number of researchers have explored. Economic polarization of the market has been coined by Citigroup as the Consumer Hourglass Theory. For various economic reasons, the upper and lower classes bulge while the middle class is squeezed. The co-founder and former CEO of Planet Fitness, Mike Grondahl joked with me about the term at Club Industry a few years ago, since I attributed the success of Planet Fitness to the trend. Chuck obviously felt that it wasn’t the only driver of market changes for health clubs.

During IHRSA Chuck, along with my partner Robert Dyer, discussed the topic and I explained that “bifurcation” is a real consumer trend that is driving consumers up the value chain or down it. I also shared with Chuck my “S Curve” graphic showing how fragmentation is and will happen in response to this trend. However, as Chuck pointed out, there are other variables like convenience and economic dynamics that are creating different market responses. His case in point is my partners use of an Anytime Fitness outside of Fort Worth at $39 per month or the micro-gym / studio trend. He is right in that bifurcation alone is not the only driver to facility models. That is helping his company maintain higher membership rates than competing low cost chains, mostly because of the convenience factor.

Chuck took out a pad of paper and began segmenting the industry into four quadrants to include: High End Big Box, Low Cost, Convenience and Studio (see the original graph in the intro photo). He also drew the future of the industry into quadrants of Virtual, Nutrition (in home), Employer Medical (insurance) and Behavioral Motivation. I’ve included the drawings which I asked Chuck if I could post (notice the initials on the second drawing). He kindly agreed.

During my presentation at IHRSA on Trends Impacting The Health Club Industry I shared some graphics (not the originals) and mentioned Chuck’s views. I agree with many of them but maintain that bi-furcation is a trend driving consumption patterns of health clubs; but to Chuck’s point it isn’t the only one. Convenience is a big driver and part of Anytime’s secret sauce. After our meeting Chuck tweeted, “thx & next decade in fitness industry will b most competitive, most disruptive & most opportunistic! #IHRSA2013 “. On that thought we completely agree. Chuck thanks for sharing your views and taking time. I appreciate your helping to expand the dialogue on where the industry is headed  and yes Chuck 1 Bryan 0 is ok by me, although on our talk I wasn't keeping score ;).

So what do you think ? How do you see the health club industry growing ? Where are the greatest opportunities and do you agree with Chuck's views ? Please let me know !

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, shareholder and executive in several fitness companies. He works for Fitmarc, which delivers Les Mills programs to over 700 facilities in the US. He advises successful global brands, serves as a member of the GGFA Think Tank and serves as CEO of the Fitness Industry Technology Council. To learn more contact Bryan here today .

Five Days In Europe: The Fitness Industry Is Alive And Well Across The Globe

Yes that is me in a coffee shop in Amsterdam and no not one of THOSE Coffee Shops ;) . I love coffee and was in that business for six years running a chain of cafes and a full roasting operation. So heading to Amsterdam I always enjoy some great espresso, after all Amsterdam is where coffee was spread around the world from in the 17th and 18th centuries. But that's not why I went this time. It was for a more interesting reason.

When one of the biggest players in the global fitness business invites you to come along to Europe and lend a hand, well who's to say no ? Getting to meet executives from some of the leading clubs chains in the UK and EU in general as well as distributors for Star Trac in the EU, Middle East and Africa is a wonderful learning experience. The information gleaned tells you something about where the bricks and mortar fitness business is heading from a global perspective. That helps me keep a perspective on trends and enables us to serve our customers at Fitmarc, Integerus and Fitsomo even better. More than anything seeing the turnaround at Star Trac continue through the eyes of its owner, Michael Bruno, as I have over the past few years, continues to be a motivating experience. There is no one I've met or known, save a handful of people including my partner and friend Robert Dyer and my wife Maureen O'Rourke, who are as committed to success and the customer as Michael Bruno. That he invites me to contribute to his global business is an honor I relish.

What's On The Mind Of Club Owners and Operators

In the interest of confidentiality, I can't disclose who we met with exactly, but what I learned was that many clubs are focusing on i) elevating their group fitness and in particular indoor cycling studios and classes and ii) focusing on small group training. Sounds like the US a bit doesn't it ? There is also keen interest in alternative cardio, particularly around Star Trac's approaching launch of the Commercial Treadclimber, which is likely to be a significant home run for the Star Trac brand. As with most mature markets, the UK market is going through the bifurcation trend of consumers, with budget and niche studios taking larger share. This only serves to reemphasize the need for smart competitors to get very focused on their core business models.

In 2010 IHRSA's Alison O'Kane has this to say about the European market in the Reuter's article Tighter Belts Shape Health Club Industry:

"Clubs doing well in Europe and the United States are either high end or budget clubs, because people want to cut back while still keeping gym memberships," said IHRSA spokesperson Alison O'Kane. "It's squeezing the middle market a lot...."Europe and the United States are the most advanced markets, so the trends will start there," O'Kane said. "There are more clubs open in Europe but America has more club members on average."

According to the European Health and Fitness Associations Annual Report the EU marketplace generates 22 Million Euros in annual revenues with 40,000 public and private facilities that serve 44 million members. This is of comparable size to the US market. Despite recent economic struggles things are looking up. There is a lot we can learn by paying attention to the European marketplace.

What do you think about the health club industry in Europe ? Do you see a similar focus on group fitness and small group training in the states ? I think there are many similarities and some differences but I'd love to hear your point of view.

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, shareholder and executive in several fitness companies. He works for Fitmarc, which delivers Les Mills programs to over 700 facilities in the US. He advises successful global brands, serves as a member of the GGFA Think Tank and serves as CEO of the Fitness Industry Technology Council. To learn more contact Bryan here today .

Trends Transforming The Health Club Industry #IHRSA2013

Macro trends are reinventing the health club industry. This is the subject of my presentation at IHRSA2013 this year. Its always exciting to attend and present at IHRSA. I am so very honored and thankful to the professionals with IHRSA for giving me the chance to contribute.

When I say that the health club industry is being transformed, what I mean is that the same trends which have impacted retail, restaurants, transportation, hospitality and others are having very similar impacts on the club business. First, demographics are shifting; aging boomers and rising millennials are combining to impact consumer tastes and needs. Second, technology is creating the ability to perform services and deliver goods in ways that were unavailable only a few years ago. Third, the world is shrinking and global ism is creating a new realm of competition and opportunity. The convergence of these forces is reshaping our businesses and will for years to come.

What is the end result ? Who knows exactly, but during my talk on Thursday March 21st from 1:30 - 3:00 I'll share what I see the future as being. Hopefully you can attend. If you can't I'll be sharing the content here and via my slideshare account.

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, shareholder and executive in several fitness companies. He works for Fitmarc, which delivers Les Mills programs to over 700 facilities in the US. He advises successful global brands, serves as a member of the GGFA Think Tank and serves as CEO of the Fitness Industry Technology Council. To learn more contact Bryan here today .

IHRSA 2013 Attracting, Selling and Retaining The Connected Health Club Consumer

There are many views one can take on business in general. I like Drucker's saying "Business has only two basic functions-marketing and innovation". Today Drucker's thinking must be put in the context of the connected consumer, because marketing has fundamentally changed so much since Drucker's time. Nowhere is that more true than in the Health Club Industry. There is a new digital landscape that is a big part of consumers lives and practices. When contemplating how to attract, sell and retain members, digital engagement must be part of the equation. 

That's why I am looking forward to being on a panel with a group of well respected health club industry leaders during #IHRSA2013. Bill McBride, Patch Evans, and Blair McHaney are all very forward thinking, smart and accomplished. Discussing how to attract, sell and retain members in today's changing world, where there are often more questions than answers, will be very refreshing with this group. I hope you will try and attend on Tuesday March 19th between 2:00 - 3:30 . In my view, what marketing, selling and retaining health club members was in the past isn't going to work very well anymore because the consumer has changed. We've got to try some new things.

You might find interesting the recent Hangout with Brian Solis in advance of his upcoming book What's the Future Of Business . During this talk Brian explores the new paradigm of digital engagement. Here's a quote: " The Live web is the future: it's bigger than social media...."You have to be present on every front, every day."  -@briansolis . Check out the entire hangout below to learn more.

What do you think about attracting, selling and retaining health club members ? I'd love your point of view. Hope to see you at #IHRSA2013 .

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, shareholder and executive in several fitness companies. He works for Fitmarc, which delivers Les Mills programs to over 700 facilities in the US. He advises successful global brands, serves as a member of the GGFA Think Tank and serves as CEO of the Fitness Industry Technology Council. To learn more contact Bryan here today .

Why Quality Group Fitness Programming Is So Important To Facilities In 2013

Well its 2013, and the rush for health club memberships is on (see Regulars Bemoan Influx Of New Members) as people embrace their new years resolutions to keep fit and be healthy. With annual membership attrition rates exceeding 40% for most fitness facility operators, however, the question I have is, "what do you do when the membership rush is over?".

With any business, keeping a close eye on industry trends is a good idea to be competitive in the long term. IHRSA's recent 2012 Health Club Consumer Report provides some interesting information on key trends. I suggest you get your hands on a copy.

Most notable in the report are the fitness classes and group fitness trends . Did you know the most affluent health club members are those that participate in group fitness classes ? From 2009 - 2011, growth in fitness programs set to music soared over 15% and mind body and yoga classes grew 17%. There are a number of other interesting trends, including the growth of small group training formats.

With the market increasingly going through a "consumer hour glass" or "bifurcation" trend, if you are not either a low cost or key club competitor, offering very compelling group programming that addresses overall trends is very important to your success as a health club or as any fitness facility.

If you'd like to learn more about how you can enhance your group program offerings at your facility please let me know. We'd be happy to help. Keep an eye out for my upcoming report on Group Trends as well to learn more.

What do you think about these group fitness trends and the 2012 IHRSA Report ? Let me know your thoughts and happy new year !

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, shareholder and executive in several fitness companies. He works for Fitmarc, which delivers Les Mills programs to over 700 facilities in the US. He advises successful global brands, serves as a member of the GGFA Think Tank and serves as CEO of the Fitness Industry Technology Council. To learn more contact Bryan here today .