Being the cheapest or the closest club may not be enough to ensure long term prosperity. Signs point to customer experience being the key to sustained success.
In an increasingly crowded fitness marketplace of both online and offline offerings, one-on-one and group options, and full service clubs and CrossFit boxes, one clear way to make your business stand out is through the experience you deliver your members and clients every visit.
The term ‘experience economy’ was first coined by Joseph Pine and James Gilmore in an article they wrote back in 1998. The core concept is that businesses must orchestrate memorable events for their customers, and that memory itself becomes the product — the ‘experience’.
While their thought process has been criticised, there is plenty of logic to what they say. Owing to technology, increasing competition, and the ever higher expectations of consumers, fitness services today are starting to look like a ‘commodity.’ Your fitness service can be placed on a continuum from undifferentiated (a commodity) to highly differentiated (an experience).
Here’s an example from the generally unexciting world of insurance. A friend who had parked on the street while she was at a hairdressing appointment returned to her car to find that the rear bumper had been seriously smashed up. Fortunately a witness had noted details of a reckless driver, so the ensuing insurance claim went smoothly. A few weeks after everything was wrapped up my friend received an unexpected gift basket in the post. The insurance company had sent a ‘care package’ of hair products with a handwritten note saying ‘We were sorry to hear of your bad experience when you last visited the hairdressers – we hope you enjoy this gift.’ Was it necessary? No, the efficient and friendly handling of the insurance claim had been enough to keep my friend happy. But it created a memorable experience that has stuck with her (and she’s stuck with her insurer).
Interestingly, the American Customer Satisfaction Index (ACSI), a private company behind the only national cross-industry customer satisfaction benchmarking used by corporations, universities, and government agencies, in its ‘Customers 2020’ report found that 86 per cent of buyers will pay more for better customer experiences.
Further, they discovered that in five short years customer experience will overtake price and product as the key to brand differentiation.
In fact, this report showed that 62 per cent of global consumers switched service providers due to poor customer service experience.
What does this tell us?
Simple: in order to enhance your business you must elevate your service levels above and beyond not only those offered by your competitors, but those expected by your customer. If you can consistently deliver amazing service and positively memorable experiences, your fitness business will cease to be a commodity – as described by Pine and Gilmore – and will become a great retention tool.
The ACSI report went on to say that a 2 per cent increase in customer retention could have the same effect as decreasing costs by 10 per cent. To put it another way, looking after your customers can have a huge impact on your bottom line.
To download the infographic about trends in global customer satisfaction and its impact on business, click here.
For strategies to improve your retention and create a ‘knock your socks off’ service culture in your fitness business, get along to a FitnessBiz Brunch over the next couple of months where you will learn 31.5 strategies that will have a positive impact on your business success and profitability.Click HERE to find an event nearest to you.
Justin Tamsett, BEd is an internationally recognised thought leader who challenges the status quo of the fitness industry. His company, Active Management, has hundreds of clubs as members, all of which receive monthly education to improve their businesses.activemgmt.com.au