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Generalists Eat Last at the Table!
Originally Posted: 04/22/09

Generalists are people who provide the same services as other people and then try to compete on price.

Generalists are chosen by convenience. For example, if there are five training studios in my neighborhood all providing training designed for anyone who comes through the door, then the one closest to my house will win.

Specialists are people who possess specific skills and apply those skills to different segments of the population.

Specialists are sought out by consumers looking for a specific skill set or talent.

Specialists make more money than generalists.

Almost every business in the world, such as the auto industry or medicine, has progressed over time from generalists trying to please everyone to specialists who target varying segments of the population. Look at the typical Jetta and its under 30 market or your corporate attorney for validation.

This simple progression is a fact of business, yet we in the fitness business seem to be late to this dance. Many of us still fight to build the perfect club that has everything for everyone so no single member of the community feels excluded. The problem here is that the old adage applies: those who strive to be everything to everyone are usually nothing to anyone.

Even the ultimate perceived generalist Wal-Mart, who in reality is a targeted specialist seeking the low end bargain hunter more interested in price than quality, and who put most other generalists, such as Woolworth's, out of business, suffers from lost market share to the small specialists that surround the bigger stores. Gourmet food stores, shoe stores and lawn and garden stores all do well located near the giant boxes.

In our world, we are now seeing the first inkling of specialists emerging. Planet Fitness is looking for the buyer who wants minimal service and a clean club for about $10 a month. Anytime Fitness created a solid model for the secondary markets and can insert a financially successful model into a town of 25,000 people.

There are a few other exceptions but the bulk of our industry is still an ill-defined mess applying a generic model of fitness to an increasingly specialist world. Walk through almost any town in America and you will stumble into a 20,000 square foot box with a bunch of cardio too close together, too much fixed equipment few people use anymore, one or two badly decorated group rooms, poorly finished locker rooms and an ugly front counter that looks like it came out of a closeout sale for unsold Formica. All the same and all claiming to be the fitness answer for everyone in that community.

Learn this now and learn it well. You have to become a specialist in the coming years if you want to survive in this industry. And this just isn't limited to clubs either but pertains to everyone who works in the industry as well.

Trainers need to stop being the guy or girl that works with everyone and start specializing in something that excites them and where there is more money. Be a youth specialist, sports performance person or the one person in town that knows more about training women over 50 than any other trainer.
Find one thing you care about and then learn more about it than any other person and you will always make more money than the poor generalists. Kill the category and become the person who is known as the source for that information in your market.

Training clubs need to evolve. Mainstream fitness facilities need to declare and go after specific markets. Franchises need to carve out a niche and let it evolve instead of failing to reinvent the concept as time passes. Nothing is deader in this industry than an old franchise concept locked into the first year it opened and still using the same marketing tools and ideas. Everything changes and everything moves from large groups to smaller target groups.

The barrier to change is that this concept is so hard to understand for most novice owners. Let me get this right, you want me to turn away clients because they aren't my specialty? Won't I lose business, and decrease my potential market share, by eliminating large segments of the population as possible members?

As strange as it sounds, the narrower the niche the larger the market because likes attract likes. Upscale clubs attract upscale members because people with money hate to hang out with poor people.
Mixed martial arts centers will do better than generalist martial arts that teach adults and kids together. Trainers with a specialization in golf swing efficiency will draw golfers, and their friends, who want a trainer who does nothing but work with golf people. Remember, generalists are chosen for convenience, but specialists are sought out for their specific skills.

So where does this leave the fitness industry? Some theorists state that the industry will come down to nothing but a few large chains that dominate all the level one markets. Eventually, they claim, everything will be like the drug store business that has seen the end of the family owned store and the evolution of the chain takeover during the last 10 years.

Not in this industry. Even the super franchises, such as Gold's and Anytime, still allow the local guys to make many of their own decisions as how to operate in their markets. They make their own choices about pricing, offerings and marketing. The true chains, such as 24 Hour (company stores) or Planet Fitness (franchise), exert more control over their clubs but out of all of the chain strategies, only PF shows sign of life a progression in the marketplace. Most other groups, no matter how large the reputation or number of clubs, reach a point of no return where the ability to develop new clubs and profit from the ones already opened stalls.

The question for all owners in the field is who specifically is your target market and how do you go after those people. By using generic ads with stock photos? By running 1980's price specials? By trying to house 20 or so unfinished parts of your business under one roof because you try to offer everything but really finish nothing?

Choose a specific target market and master that segment. Advertise to them. Talk to them. Design your facility to meet their needs. Evolve, grow and specialize and the future will be yours in this industry.

Hot topic: One of the hot topics popping up through emails right now is the $1 down special that Planet Fitness ran this winter with such strong results. We ran $1 a number of years ago in about 300 martial arts schools, and in about 70 fitness centers, and we put big numbers on the board. In fact, it was probably the single most effective promotion we ever ran during our years as consultants for that group.
And then reality hit the proverbial fan. During the next 120 days, the losses for those memberships were staggering often exceeding over 60 percent in many of the facilities. We wrote a lot of paper but it turned out to be extremely difficult to collect.

Memberships are only as good as what the person has invested up front. If you have little invested, the perceived value, and ultimate personal loss if you don't pay, is small. Most memberships gain collectability when the buyer puts at least the equivalent of 10 percent down of the total value of the membership when he buys.

Planet Fitness is getting a buck down and $10 to join. The volume is there but the losses over the next six months on that paper will be interesting to track.

Could we do this in the mainstream world? You could try the $1 but make sure you get the first month's payment as well or you will be writing a lot of lost opportunity in the future.

Think Chicago: We are having our advanced workshop in Chicago again this year. We sold out last year and will do so again this year. This is our owner and manager's retreat for three days to discuss topics related to owners trying to get new ideas to keep their business vital and growing in the future. We also have great guest speakers at these events as well. For this year we already have Alwyn and Rachel Cosgrove, the functional training gurus and successful training club operators as well as Dana Anspach, an investment brain who talked last year about building wealth in your life. If you want in for this book soon and check the website for additional speakers as we add them.

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