In this interview, Jeff Skeen, CEO, Fitness Connection addresses:
- The implication for clubs surrounding the convergence of healthcare, wellness, and fitness
- Club management software selection criteria
- Using technology to engage members
- Training GM’s how to read a P&L
- Application programming interfaces (API’s)
- How to welcome and support gym members that are not like the physical specimens that appear in advertisements promoting club memberships.
Overview of the Fitness Technology Thought Leaders Series
In preparation for the 2017 Technology Summit, Motionsoft is expanding and evolving the Summit’s education mission with the launch of Fitness Technology Thought Leader interviews with CEO’s, CFO’s, and CTO’s in the health and fitness industry. The interview series will focus on business issues related to fitness technology planning, value drivers, budgeting and ROI, member adoption, innovation, and optimization. Interviews will be published every other week until the start of the 2017 Motionsoft Technology Summit.
The Motionsoft Technology Summit is a club-only event for executives in the health and fitness industry. The Summit helps educate club owners and operators by bringing together really smart people from amazing companies to discuss the challenges and opportunities of technology in the fitness industry.
Interested in attending the 2017 Summit? Please register now.
Todd Tweedy, the co-host and moderator of the Technology Summit, will lead interviews with industry thought leaders. If you have a question you’d like to ask, please email Todd
Fitness Connection Overview
Fitness Connection believes in offering great facilities that are fun and consider every need. Our facilities have state of the art equipment where we take pride in maintaining a clean and friendly workout atmosphere. We have 37 locations nationwide in three states and take pride in helping each one of our members on their way to their fitness goals.
For more information about Fitness Connection, visit fitnessconnection.com.
Fitness Technology Thought Leader Interview: Jeff Skeen, CEO, Fitness Connection
Todd Tweedy: Jeff thanks so much for joining us today for the Fitness Technology Thought Leaders Interview Series. It’s a pleasure to have you join us and from what I understand, you are a pretty busy man.
Jeff Skeen: Like most everyone. Busy, indeed.
Todd: Your team just opened a number of Fitness Connection clubs and I’m curious, where are you with your launch and what’s next in terms of how you plan to use technology to engage your members?
Jeff: We have really been working on with our social media team, reaching out through different electronic means to engage members and prospects especially buying memberships online with our $9.95 a month membership plan. It’s very easy to go online and purchase the products. It’s not like someone’s paying $80 a month. Our marketing team has done a great job of doing that.
The next step that we’re working on, is next year we’re hoping to have all of our locations on the Motionsoft platform that will allow us to move from supporting three different health club management systems. We currently don’t have unification of data, making it much more difficult to track our members and prospects, and ultimately being able to engage them.
Todd: Tell me more about your decision making process. What were some of the criteria that guided your club management software decision?
Jeff: One thing we do is that we don’t just evaluate the features and functionality of an application. We also look at the financial stability of the company. We evaluate the hosting facilities and capabilities, and we reach out to their clients. We look at a lot of different things. We’re backed by a large private equity fund and they want to make sure everything is safe as well.
We also look at uptime, we look at speed, and we do a lot of testing. We did testing with Motionsoft on the ability to handle large amounts of data. Because our locations are high volume facilities and we are opening four to six new clubs a year, we had to insure the system was capable of handling current as well as future needs. Essentially, our team looks at a lot of different things in making our decision, and it’s taken us about two-years to do our extensive due diligence review which I know your team has been appreciative of all that, I’m sure.
It’s a big decision for our company, and honestly it’s a big decision for any company. Moving forward we have to make sure this is not a decision we’re going to have to tear out a year later.
Todd: I want to take a step back for a moment. I’m curious you talked about digital platforms and electronic communications. What are the most important tools for you in terms of reaching prospects or even from the standpoint of continuing to engage members?
Jeff: I think the most important thing is being able to have disparate systems communicate with each other. There is not one company out there that handles everything. We’ve got our own website that we’ve built as well as a number of other systems we use to run the business so it’s really important that we have the ability to integrate these solutions. We’re creating a data warehouse so that we can link these different data sources. The real value of our digital platforms is linked to our data warehouse and that’s where Motionsoft comes into play with their APIs set they provide us, on an ongoing basis, an up-to-date API library that allows us to connect all types of other solutions that together make us more competitive so we not only need a profile of our prospects but also a profile of our members, and ultimately, being able to see very quickly what members are spending the most with us. The data warehouse will also provide us real-time reports to allow us to better run our company.
Like in Vegas, hotel casinos keep a very close eye on those who spend money and they treat them like royalty. Right now because we have so many different systems, we really can’t reward and engage our customers as effectively as we’d like to. That’s about to change.
Todd: How many systems have you cut out of the equation and, how many now remain?
Jeff: We cut three health club management systems consolidating them into one solution.
Todd: I’m curious for the general managers that are running individual locations, what’s the benefit to them, from your perspective?
Jeff: Real-time data. Right now we have a lot of different reports, we don’t have the reports that we really need to run our business as effectively as we want. We haven’t been able to help our general managers in real-time see how their specific location are performing and how to make corrections that are necessary. That’s really important to our general managers and us because their paycheck depend on them being able to increase revenues for each of their locations. We also require them to keep an eye on member retention.
We really had been flying a little blind. In the past, we’ve relied a lot on manual reporting. We’ve wanted to give our GM’s information on their top customers so that they are able to engage them more effectively. Today, one of the systems that we have is Medallia, MXM, which has really been a big help to the company, from the standpoint of significantly increasing how we engage new members so that helps our GM’s greatly but we also see how we’re doing at the national level.
Todd: We were honored to have Medallia, MXM sponsor the Motionsoft Technology Summit and they’ve done an incredible job in the industry and, very proud to have them partner with us. I’m curious as we shift gears and talk about how we support club operators who are trying to be like a Fitness Connection, and create a growth company in the fitness industry, what in your opinion should those club operators be telling their general managers as it relates reporting and data?
Jeff: First, I think most importantly they need to be looking at the data. I believe one of the things that we do well as a national operators is to teach and train our business leaders on how to read the reports. For example, in our locations, our fitness managers are responsible for profit/loss statements of their division. Not many fitness organizations that I’ve run into have fitness managers running a business unit as a business unit, and looking at financials. And that is something over the years that we’ve had to train them on so that they can run their division profitability.
For most of us at the national level, that seems very rudimentary, but for someone that’s used to just selling personal training and handling customers, looking at a P&L can be intimidating. So it’s teaching our management how to read the reports and also showing them the benefits of the reports. One of the things in our company we say is “We hate meetings and we hate phone calls.” Unless the meeting, phone call, or report helps make money, we cut it out.
One of the things really helping our leaders is teaching them to ask the question “how does this report or information benefit our business unit?” A lot of times they don’t see it so we have to help them think critically about why their business is performing a certain way so both the leader and our company can make money together.
Todd: How did you go about training your GMs to understand a P&L statement and how to leverage that P&L information to make informed business decisions?
Jeff: A couple ways. We have calls on a weekly basis, we also are in the field. I personally visit our locations throughout the year and will personally meet with leaders as well, just to give them insight as well as my other four business partners that I work with. I know why a lot of national leaders don’t take the time, because this can be exhausting, it can be very frustrating. But we’ve seen the fruits of our labor rewarded by meeting with them and teaching them, training them which makes them better leaders and business operators.
One of the things that I will say to a leader is “We hire you to leave us.” And what I mean by that is we want to train them so well that if they outgrow us, it’s easy for them to get their next job. I think they appreciate our company from the fact that they know we’re looking out for them professionally as well as personally.
When we train our leaders to interpret P&L statements and other reports, we have to show what it’s in it for them. If they can’t see how it benefits them and they only think it benefits us, we have a problem. So we show them the numbers and we show them how it impacts their paycheck.
Todd: I’m trying to share some of the learning that you may be taking for granted. Your team has done just an incredible job growing fitness companies and expanding them nationally. I’m curious is there a common theme you come across as you’ve travelled across the country during your meetings with your GM’s and FM’s to engage them to continue support the growth and expansion of an individual facility?
Jeff: Well the main theme is, for them and us, is first of all to understand what their career objectives are, and that in many cases we’ve found that if someone is a fitness, membership or general manager, their career objective is to grow and, that career objective is often to be promoted. Promotion in some instances means that they may own their own facility. So what we do is to clearly communicate and demonstrate to them that we view their career objectives as a win-win situation for both of us so that when we are sitting down with them to help them grow our business it gives them the skill sets to eventually grow their own business because as a growing company, one of the biggest challenges we face is talent, and we want to find smart and talented individuals who want to grow and learn with us because we prefer to hire within. With this line of thinking, if my business partner as I are doing our jobs correctly, the leader will want to grow with us instead of going somewhere else or opening their own facility.
You don’t’ always win, I wish I could say we have 100% success rate, and everyone is doing great and we’ve never had to let anyone go, because that’s not quite the case. Because to be a leader in this industry a lot of general managers are treated like sales manager, they’re not truly general managers, they’re not truly a business unit leader. That creates some difficulty because when they come to us they may not be use to the language of “You’re responsible for this unit.” And you’re responsible for the profitably, and you’ll be responsible for the success of the business.”
And that’s not a common language within the fitness industry. The good news is people hear we train like that and that we look at our teammates that way, so we have people that come to us looking for jobs. We’re really proud of that.
Todd: How does that change how a GM manages a facility?
Jeff: Great question because our business leaders make our business their own business. We try to help them see the value if it was their own company. Think about this: what if a GM ran a facility as if they were about to lose their home? In that sense, you’ve got to make your mortgage payments, your rent payments. Your wife, your children, everyone is depending on you to make this happen. That’s what we do with them and show them a lot of the information so that they can manage this or any other business.
Todd: It sounds like we need a lot more captains of the ship in our industry.
Todd: Let me shift gears, I want to talk about your participation at the Motionsoft Technology Summit, specifically on a very pivotal topic that initially started with a keynote from Julia Huggins, who as you know is the president of the Mid-Atlantic group for Cigna Insurance. You joined us as part of the round table with Julia and some other companies, you had some very interesting insights in terms of where we are with wellness and the direction of convergence in terms of healthcare, wellness, and fitness.
Where is the industry, what’s next, and how is that convergence a priority for your companies?
Jeff: I’ve been in this industry for over 25 years, and I’ve been very disappointed in the industry, and a part of my disappointment is if you look at IHRSA stats approximately 18% of Americans have a health club membership which is a very low number in my mind. Then you also just see the healthcare crisis, you see obesity, you see all these other issues and I scratch my head and I think about all the conversations that the white house is having, and everyone is talking about Obamacare and healthcare, but no one has really reached out to our industry, which should be a major part of the solution to the healthcare crisis. We need to find a way to engage more people.
At first glance, as an industry, we feel like we are doing everything right; however, when you have conversations with medical professionals like Dr. Geib, who was on our panel, she explains “It’s obvious why you’re not engaged, your industry is not engaged. It’s because you don’t speak our language.” Most of the time we hear about the size of our biceps, how ripped are our abs, getting ready for swimsuit season and getting ready for a wedding. That is the language of our industry, it’s about beauty. If you look a lot at all the advertisements that are out there, for all of our different groups, it’s really promoting that kind of beautification, so that’s why we have been avoided.
The great news is, we are hearing a lot of leaders in industry starting to get it, and they’re starting to see they need to be part of the solution by changing our language about fitness. The thing that’s awesome about it is, as I’ve told friends, it’s one of the few things that I look at and say, “I can make a tremendous amount of money for investors and make a huge difference in the American population.” How many industries do you know where you can change so many lives and create wealth at the same time? It’s really an incredible opportunity. Especially now when you take a look at the competitive horizon, where studios are opening left and right and Planet Fitness has gone public and private equity firms are investing in Planet’s franchisees to allow them to grow faster.
Competitive pressure is getting enormous right now. Some other peers we were talking about how, in the 25 years I’ve never seen as much pressure on this industry from a competitive perspective, and I think for leaders that are willing to get into the healthcare and wellness world, willing to reach across that aisle to the medical community, willing to reach out to insurance players like Cigna, who have reached out to us and partner. I see a whole another world of profitability and growth for the industry.
As a company, we are attracting customers that have never been a member of a health club. And one of those reasons is because we’re not a high price club operator, so we get a lot of people who come in from an affordability perspective, and they’re the ones, the lower income ones, that are really making the biggest impact in healthcare crisis, and so now they’re in our facility. It’s very important to us to engage them and the standard one on one personal training package at $160 to $200 a month is nothing they can afford. So as an organization, we’re looking at that responsibility and that opportunity and asking ourselves “How do we make our products and service more affordable to engage those customers?”
That’s where technology is really going to come into play. Not only by helping us evaluate the data, how to make core services more affordable so that we can engage those individuals with diabetes or battling obesity. Technology that can tap into medical community data sets so that we have more informed information that we can use to provide better services to our members. We are looking at a whole other world when it comes to technology, obviously not trying to plug Motionsoft, but that was one of the things that we were very impressed with Motionsoft is how they’re aligned with us and their desire to support that perspective. As a technology company, they understand the mission that we’re all looking towards with fitness, healthcare, and wellness, and their technology is advanced enough that it can interact with companies such as h2 wellness, which is one of our partners that we’re working with in medical arena.
So to be able to get in to that community, you’ve got to have technology, and you have to have technologists that understand what that takes.
Todd: Very honored to have h2 wellness as part of partner platform and API integration within Motionsoft. I want to be cognizant of your time and have two more questions for you.
Number one, Julia Huggins from Cigna noted that the challenge with working with the fitness industry was their inflexibility. Can you talk a little bit more about that?
Jeff: Yes. In a call with Julia that we had before the conference, it sounds like she had a poor experience with a single operator, and that is where I assured her that that shouldn’t be her perspective of the entire industry, and that most of the executives in the room that were at your summit, I know many of them well, and are willing to be flexible. Who wouldn’t when it’s comes to changing lives and make more money, it’s a great opportunity.
I think her statement is not necessarily an untrue one for many operators in the industry where there’s this narrow focus on “How many memberships did I sell? How many drinks did I sell? How many services did I sell?” Really focusing on just those things limits how clubs can work with other industries like health insurance providers. For us, we approach the opportunity a bit differently like “Wow you know what?” we have insurance on our personal trainers, we can take them into the community. There’s no reason that we need members to come into our gym or even make them have gym memberships, they can leave their office during lunch or after work, and engage in some personal training or fitness programming.
We can go outside the four walls. I think that’s going to be something that’s going to be critical is to share with everyone outside the four walls, and that’s including insurance companies that we are willing to be flexible with and that we’re looking forward to being partners with them.
Todd: How do we need to be more flexible in terms of technology as it relates to working with third parties like insurance carriers?
Jeff: It seems like the ability to get data out of a system nowadays should just be the norm. Unfortunately, we run in to technologies and companies that still don’t have the ability or the flexibility to get the data out of the system. I believe by having the flexibility through API’s, such as the API set Motionsoft provides, is critical to us being able to be a partner to other companies so we can provide goods and services to impact healthcare.
Todd: Certainly. Having an extensible, flexible data schema gives our clients’ the flexibility to create customized data fields on demand so that they can gain insights on their members, monthly draft and accounts receivables. That’s a great observation, Jeff. Let me ask a final question to wrap up this session of your Fitness Technology Thought Leader interview and, it doesn’t have anything to do with technology. You noted that only 18% of American’s have a gym membership. How do we welcome individuals that aren’t the physical specimens that appear in all advertisements promoting club memberships?
Jeff: That’s a great question and I mentioned that point as a panelist during the Technology Summit Wellness Leadership Roundtable with Pam Kufahl from Club Industry who moderated the session. My point is that we need to become more caring when supporting our customers who have never worked out in their life. For many of us in this industry, we are former athletes and we’ve never had a day in our life where we’ve had to experience the difficulty of getting up a flight of stairs because we had a problem with our weight.
I think we have to be willing to train our teams’ to look at our members through their eyes and knowing that everyone is dealing with something. Having awareness that some challenges are more visible than others is a level of awareness we’re working to support across all of our teams. We can’t just continue to approach our industry in the same way we have in the past. It really has to change to compassion and empathy. One thing that’s really helped me personally is being involved with our obesity program that we’ve been very proud of that started about 24 months ago. Listening to our health coaches share stories about the struggles and, ultimately, the accomplishments of our members is something our industry can be proud of. I’ve attended one of our women’s clothes fitting events. These brave women that had struggled with their weight were re-learning that they didn’t need to fear that their clothes were revealing their weight struggles.
I am so grateful to these brave women. They allowed me to be a part of their journey as they were seeing themselves again for the first time wearing clothes that made them feel beautiful. It was amazing how they changed, I think we need to focus on human kindness, and I think we’ve learned that the first step for these woman is to start with a program that may feel a little uncomfortable at first but where it’s not just about losing pounds, but it’s about supporting someone who’s dealing with emotional pain, either a divorce, or a loss of a child, or whatever it may be. The psychological element of health and wellness has been overlooked as well and that’s why Fitness Connection is focused on health coaching. I think that’s one of the most important things that we can start doing as an industry.
Todd: Jeff it’s been an absolute pleasure, thank you for joining us today for the fitness technology thought leader interview series. I hope we can corral you again to join us for another session.
Jeff: Thank you very much Todd.