Opinion
The perfect gym Oxygen Consulting’s Ray Algar lives the dream of the ‘perfect’ club
Probably the best health club in the world? I was recently talking with Richard Duvall, the founder of Egg, the online bank, about his compelling vision to ‘re-invent’ banking. He knew that people were ready for a radically new banking proposition. Eight years later, and Egg is quickly moving towards acquiring its four millionth customer. It really made me think that the health club proposition needs a similar degree of reinvention if it is to become a significant contributor to the country’s long-term health and well-being as we move towards 2010. I have been through my fair share of health clubs over the years, lurching from one to another; surprised that reception staff never remember my name and wondering why my weight remains the same even though I religiously follow my ‘personalised exercise programme’. After a while, I get bored and resign, only to sheepishly return a few months later and so the cycle continues. Often, I am unsure of the return on investment, but it feels right. On the last occasion of this love/hate affair, I vowed to find something better, and better I most definitely found. Just under nine months ago, I joined the Health Hub™ and it is unlike any other fitness club I have ever experienced.
A healthy building One of its many advantages is that it is a new build, developed as part of a public, private partnership (PPP) with a local school. The starting philosophy was that a health club should be ‘healthy’ in its own right. Consequently, the building has incredibly strong environmental credentials. The main structure uses a mass of glass and sustainable wood and is naturally ventilated to reduce energy costs. Natural ventilation also helps to ‘reconnect’ members with the outdoors and counters the time spent in stale and unhealthy, climate controlled work spaces. All facilities have been designed with a broad cross-section of member needs in mind, including enlarged shower cubicles for people that are above their ideal weight, and non-toxic paints throughout (who wants to breathe in nasty chemicals when you are supposedly there to become healthier?). The Health Hub ™ also ‘harvests’ rain-water which is then used for the centre’s toilets. The ultra violet treated swimming pool water reduces the club’s dependence on chemicals. I also like the ‘outdoor gym’ where a motorised wall peels back to allow the sun in during the summer. Over three quarters of the exercise machines are ‘self powered’, to reduce energy use. The club has even struck a deal with Toyota, which has sponsored three of its Prius hybrid cars to members of the senior management team - a small detail, perhaps, but indicative of the overall approach.
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Judgement day - end of the road for mediocre staff?
Revolutionary community-centric operating philosophy One of the features I really like about the Health Hub™ is the pivotal lead it takes in building a deep rooted place in the community. This starts with its educational setting, but continues with four very unusual features. 1. 7.5% of the centre’s pre-tax profits are donated to an adopted local charity. 2. 2.5% of annual profits are invested in five ‘Young Achiever’ awards in recognition of outstanding community endeavours by young people. 3. The centre donates one staff hour to community initiatives for every member that joins the centre. Presently, they have 2,746 members, so the equivalent number of hours is focused into local projects. 4. 75 ‘good neighbour’ memberships are offered free of charge to people over the age of 65 living within five minutes drive of the centre. These are ‘capped’ and replenished when someone’s attendance drops below 20 visits in any three-month period – ‘use it or lose it’ is the well-meaning motto here.
A centre without walls Given that a typical member may normally spend only about 100 hours a year actually inside a club (about 1% of annual hours), the centre has designed its systems to extend services beyond the confines of the building and to ‘connect’ members when not physically present. Its ‘Health Club in Motion’™, an adapted trailer developed in partnership with Portakabin® moves around the community providing well-being advice, and services such as weight management plans, cholesterol, diabetes and blood pressure testing. This is also used to inform local residents of new services such as their ‘Kick the Sticks’ ™ smoking cessation course and their ‘Power to the Parents’™ workshop on parenting teenagers.
it really captivates members. They have installed FitLinxx®, which allows members to view all their personal exercise data on any home or office PC with an internet connection and communicate with their lifestyle coach. GPs can log onto the FitLinxx® system from their surgery to monitor patients who have been prescribed exercise, view real-time progress and leave useful comments. Webcams situated throughout the centre allow members to see what they are missing, whenever they are online. This is also useful if you want to check the café bar for a free table. Members can book most facilities (crèche, classes, tennis etc.) on-line and as far as I am aware, they are one of the few centres that offer a ‘cashless’ environment, where services can be charged to your membership card (secondary spend has risen 9% since it was introduced). The card is embedded with a Radio Frequency Identification (RFID) tag which allows members to use one of the ‘Blink’ terminals to book and pay for courses. These really come into their own when reception staff are busy. The centre is constantly on the look out for what it describes as ‘friendly and intelligent’ technology. Presently, it is trialling the Bodybugg®, the world’s first wearable monitor that calculates daily energy expenditure. Used as part of their ‘Live Once, Live Well™’ lifestyle programme, it automatically calculates how many calories you have expended throughout the course of the day. The normal daily intake for a man is 2,500 – 3,000 calories, so if your Bodybugg® is reporting 799 calories expended and it is now 6:30 in the evening, you have a compelling reason to visit the centre, or politely decline those profiteroles with double cream during dinner. I’ve heard they will soon to be trialling the Honda Asimo robot that will be able to bring water to exercising members and welcome guests by name at reception (when was the last time health club staff remembered your name?).
Intelligent use of technology The way they use technology is very interesting and
Big Brother? The Bodybugg is monitoring you...
February 2006
Fully member-driven operating guidelines The long-term needs of members have clearly been well considered. How do most health clubs presently reward their most loyal, long-standing members? Normally, by writing to them at the beginning of the year to inform them of a price rise. At the Health Hub™, the price you pay on joining, is the price you pay during the lifetime of your membership. The longer your relationship, the less you pay. It also makes members really think before they leave, because they would have to re-join at a higher rate. They call it ‘memberised’ pricing. Suddenly made redundant? Bring some evidence to the club, and they reduce your monthly membership fee by 50% for four months, while you find your feet again. Not in the market for a long-term membership? Then buy a club course instead. I have recently joined the Wok cooking and table tennis clubs. I am also trying to persuade my ten-year old son to enrol in the gym/maths combo’ club (exercise fuels academic achievement), but I cannot get him out of the centre’s internet lab. No need to wait and queue for machines during busy times here as they operate a very novel ‘appointment-driven gym’. Book a 45-minute slot on Monday at 5:45pm through the web site and you are guaranteed all the machines for your programme. The only trade-off is that you stick to your programme and finish by 6:30. Sceptics said it was unworkable and that mem-
Hydration, Will Robinson
bers would not like it, but members love it. Want a twelve-month contract with a three-month notice period? No thanks. At the Health Hub™, when it is time to move on, you simply e-mail the manager and receive a Jamie Oliver cookbook or mini MP3 player, if you complete the exit questionnaire. I could go on, but membership policies like these create fans for life.
with its local Primary Care Trust, sale of specialised courses and the franchising of its systems to a new club operator in Estonia. Why Estonia? They have a unique tie-in with the University of Tallinn where Business Studies students shadow Health Hub™ staff for three months, funded by a European Union knowledge transfer programme.
Innovation is everywhere I think the Health Hub™ is different and successful because the team live and breathe by one of their values known as ‘always looking for a better way’. They are inquisitive, critical of the status quo and always scanning other businesses for ideas. They apply the principles of the business innovation circle:
Real time, real benefits - the Fitlinxx interface
Members for life
At any point in time, 30% of the service proposition is being scrutinised for enhancement, while 20% is in the actual process of being changed. It is the health club equivalent of Tchibo, a Eu3bn company that changes its product offering every week of the year. It was this constant quest to improve the member experience that led to the introduction of the appointment-driven gym. It is also the reason the centre receives 64% of annual income from ‘non subscription’ sources, through its partnership
The Health Hub™ has an almost evangelical following. For many members it has quickly become the second most important place in their lives. Could this club, with its socially inclusive business model become a catalyst for the future development of health and fitness clubs? I hope so, because up until now, club operators have done an excellent job in creating millions of former members who have returned to their sofa and TV’s saying ‘It wasn’t for me.” Ray Algar, MBA is managing director of Oxygen Consulting (www.oxygen-consulting.co.uk), which provides strategic and profitable insights to sports and leisure organisations. Ray can be contacted on 01273 885 998 or ray@oxygen-consulting.co.uk. The Health Hub is a conceptual gym, and does not exist, at least at the time of writing. However, the technologies profiled are widely available.
OPINION by Michael Miller Brave new world beckons in 2006 for fitness sector The New Year brings with it a renewed sense of optimism in the fitness and leisure sector. A number of high profile transactions and rumours of others to follow has re-injected vigour and excitement, from the leotard-clad members on club floors to the suited City marketmakers. Investors are becoming increasingly enthused, not merely because recent returns have been impressive but also because, to their credit, many operators have embraced the need to adjust their business models to cater to an increasingly sophisticated client base and tap into previously unexploited markets. So what is 2006 likely to hold in store? In an industry which moves so fast this is
February 2006
impossible to predict, but there are some signposts to future trends. First, while the geographical reach of the industry continues to enlarge, encompassing emerging markets of enormous potential, consolidation will provide greater access to funding and enhanced offerings. Secondly, state initiatives to encourage club usage and thereby reduce burden on the health system will provide new opportunities capable of being converted into substantial revenue generators, it seems increasingly likely.. As a result, there will be greater dialogue between the sector and the state that can only be beneficial to its future success. Thirdly, as the traditional health club offering continues to evolve into a multi-faceted facility
encompassing new activities, compliance will be of increased importance to clubs and operators, particularly in light of new corporate responsibility legislation (see article above). 2006 therefore heralds a paradigm shift. A shift away from fitness and lifestyle to a model focused on health and wellbeing, to a place where facilities are optimally utilised and member value purchased can finally equal member value received. As this paradigm shift takes effect, the most successful operators will be those who understand at the outset the benefits of this new environment and leverage them accordingly. For those operators, the future is indeed bright. Michael Miller is a partner in the corporate practice at national law firm Halliwells and a specialist in the fitness sector
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