The Leisure Review: October 2008

John Stransky, president of Life Fitness, had travelled all the way from the company’s Chicago headquarters to Stanstead to introduce the new Elevation product range to the UK market. However, his colleagues had made it worth his while by laying on a full two-day conference for customers and staff to mark the occasion. John’s colleague, Dan Wille, had made a similar but rather more permanent journey four weeks earlier to install his family in the Cambridgeshire countryside and take up the top post at Life Fitness UK. Both were able to make time in their conference schedule to discuss the state of the fitness market with The Leisure Review and both were gracious enough to take their time over the conversation.

Given that the context of the conversation was a new product and that much of the conference topics had focused on business development, customer service and member retention, not to mention the apparently tortuous trading conditions and the mythic credit crunch, the first question was whether the product or the service was now more important within the fitness market. For a global company, Stransky explained, the answer rather depends on the specific market but, given that Life Fitness continues to grow apace, there are some general themes that one can detect.

“We think new products can really cause people to want to work out more frequently, which helps them reach their goals,” he said. “And the club or hotel that puts [equipment] in is in the same position to satisfy their members or guests. We still think there’s lots of opportunity as clubs that are in existence put in new equipment to satisfy their customer base. By the same token we are focusing seriously on how we can help our customers to offer their customers that much more from a service perspective.

“So I hate to be evasive about it but we’re focusing on both. In this market we see ourselves in a situation where there is definitely still opportunity. The reason that Dan Wille has taken the challenge of picking his family up and moving here is because we think there’s still opportunity.”

Showing no obvious sign of the culture shock that must come with the shift from Chicago, Illinois to Ely, Cambridgeshire, Wille echoed the point but stressed the need to listen to the market that they serve.

“Given my fourteen years with the company, my belief is that Life Fitness has always been a strong product company but we have recognised that you can offer something more than just a hunk of metal,” he said. “You can offer something more meaningful from a service standpoint, something that will help the club owner offer a better service to their members and help them run a better business. I believe that is what the market is looking for.”

It is a formula for customer service that Wille believes has served Brunswick, the parent company to Life Fitness, well in their other leisure divisions, notably bowling and billiards in the US, and one that will serve Life Fitness well in the UK and Europe. Picking up the theme, Stransky explained that getting feedback from customers is the key to developing both product and service.

“We really like to understand from our customers what their problems and needs are and work out if there are places in the world that have solved those or if we can figure it out,” he said. “If, for instance the club owner in the UK is trying to make more money – as all business people are – or trying to improve retention – as is always the case in this industry – then we’re trying to figure out what we can do to give them education that will allow them to try something different. Whether that’s club layout, putting in different pieces of equipment so that somebody who is coming to exercise for the first time will have a path that they can follow, something that is interesting so that they won’t quit

“It may also work out well for a club to be putting in new equipment so that its existing customers can see that there is something new to keep them engaged and interested. We think by offering certain services to the club to help with one segment it can also help us to sell some product to the club that will help them in other segments. It’s really trying to link the two to figure out what services and what products are good for the clubs and good for their members, which is good for us as well.”

Life Fitness puts great store by its access to user data from its equipment and the extensive customer research that allows the company to monitor how their equipment is used and what their users want to achieve and extensive research is scheduled to assess how product and facility design impact upon the fitness market. But does the quest for market information merely hide the uncomfortable fact that the fitness industry is driven by innovation, the next big thing in exercise to bring people through the doors? Stransky concedes that it is an important factor.

“Innovation is what’s exciting,” he said. “Innovation is what catches people’s attention, whether it be the club owner or their members. Innovation is very important. At Life Fitness I dare say we have the largest engineering staff in the industry and we’re likely to spend the most money in engineering each year. We’ve invested in new engineering labs in our headquarters in Chicago which we completed a year or so ago, all with the intent of coming up with products that would be great for exercisers to keep them engaged.”

One of the features of the new equipment range is a USB port, allowing users to programme the machines with their own exercise programmes and data. A new website offers a ‘virtual trainer’ service allowing users to monitor their progress, design their own workouts and plug their programmes straight into a machine at the gym.

“We see that sort of innovation as being very important,” Stransky said. “It’s something we spend a fair amount of time on, making sure we are getting feedback on what people want and how they feel about what we’ve delivered.”

But for all the innovation and technology, the research and feedback reveals that equipment users are essentially creatures of habit. Dan Wille explained: “We’ve always created programmes for our cardio products and we all know, and science has told us, that interval workouts are better than manual workouts at a certain steady rate. Yet 80% of all users on Life Fitness, and I would imagine this holds true across other brands, hit ‘manual’ or ‘quick start’ for a steady-state workout. Why do they do that? One of the theses we have is that people don’t want to look stupid in a club when they don’t know how to use something. With the virtual trainer feature you can conduct a workout, plug it straight in and hit ‘go’ but get a more productive workout.”

So the inference is that customers’ response to innovation is, to say the least, minimal?

“Innovation has solely been tied to product,” Wille said. “I worked in product management for ten years and it was always the Holy Grail to find the next new machine or the next new feature that nobody had so that you could be deemed ‘the most innovative’. We’ve matured as a company and innovation doesn’t just pertain to product. It pertains to services and new ways to go to market to provide a better experience of the club, of the club manager and the club user.”

Having only been a resident of the UK for a month, Wille was reluctant to offer definitive expert opinion on the UK market but he has gained enough information in recent weeks and from numerous visits over the years to understand some of the similarities and differences between the markets either side of the Atlantic.

“I think they do appreciate and recognise more here in the UK and Europe the innovation of services beyond the product,” Wille said. “Product is good but there’s a greater appreciation here than there is in the US of the things that separate you from the norm. You’ll see that in a US club in the way they buy their products. However, it’s evolving quickly in the US and they are starting to recognise that there are additives to the product that drive success.”

Outside the equipment market, the profile of fitness in the UK has rarely been higher but the government’s promotion of physical activity has not focused on gym membership and the use of equipment. What are the implications for the fitness sector of a national campaign to get people walking, cycling or running in the open air?

“I think that’s a good thing,” he said. “Take a look at it from a broader, more altruistic view: if people are exercising it’s good for them. And if people are exercising because the government is giving them a reason, through educating kids in school or by whatever means, that’s good for them. If from that point or later in life people want to go and join a gym, that’s good for us. If people run outside twelve months a year and that doesn’t bring us any more business, that’s still a good thing. It’s what’s right.”

Amid all the talk of markets, product and customer profiles, such certainty cut straight to the heart of the issue and the industry. If what is right is good for business the sector can only thrive.

The Leisure Review, October 2008