Why Being Human Will Be A Big Differentiator For Health Club Brands In The Next Decade

In the health club industry technology has been a source of innovation for decades. From new equipment ideas like the Stairmaster to billing members via EFT and more recently from mobile fitness applications to heart rate group training solutions; fitness and health club innovation has changed and continues to change the way the industry delivers fitness services and creates member experiences. After all, the potential for the very automated, fully informative, and effortlessly enjoyable has led to a lot of inventions and innovations throughout human history. Yet, technology is only one part of the innovation equation. 

People have always been masters of technology innovation, but in the last decade, something happened. Many companies listed at the top of the Fortune 500 evaporated. Many business models that have survived more than 50 years are no longer competitive enough or relevant enough to win over customer attention. The 33-year average lifespan of businesses in 1964 narrowed to 24 years in 2016 and is expected to further decline by 50% in 2027. Now some fear that robots are going to take over their jobs, and they very well might one day.

How did we go from dreaming about the possibilities of technology to being concerned about its potential? The reason is simple: we’re letting technology reshape us, instead of commanding how it can further our member experiences and business models in ways that make the most business sense. Balancing technology's benefits with the real-world implications of being in a people business like the health club industry is an important consideration. As one of our ABC Financial colleagues wrote earlier this year, humanology, not technology alone, will become increasingly important in the health club business. She was right.

In general, humans sometimes can get caught up in the speed, volume, and variety of change in the world. No matter what technology we adopt, there will always be a newer, faster, and easier discovery that appears around the corner. Fitness and health club brands will continue to rethink, reimagine, and reset themselves as they find new ways to become more efficient and effective, but will they keep in mind that they serve human beings? They should and this will separate the outstanding from the mediocre in the future. 

Here are some interesting statistics, in recent years, health club brands have opened up a variety of new channels, like  chatbots, live chat and self-service options, through which they can engage with and support their members. For the most part, that's a good thing, giving customers more ways to communicate, and giving these companies more opportunities to provide their members with positive experiences. 

Given the amount of money and time companies have put into developing or buying these technology tools, some of the results of a recent survey from analytics software firm Calabriomay may come as a surprise. 

• About 79% of 3,000 consumers surveyed said interacting with a human instead of a chatbot or digital self-service channel is an important aspect of receiving good customer service from a business.
• 74% of those surveyed said they are more loyal to a business that provides them with the option to speak to a human, than those that only support customer service through digital or self-service channels.
• 54% of those surveyed said that they don't think companies are wasting their money when they invest in new technology intended to improve customer experience. 

It should be noted that consumers are not saying that new service technologies are a complete waste, or that they only want to engage with humans. Companies may not need to re-think their investments in these types of technologies more so than aiming to achieve a balance of technology and human touch. Perhaps more important, they need to make sure they give members some control and the ability to switch modes from digital to human at whatever point they wish.

If companies fail to give their members options and expect them simply to plug into a digital engagement option, they should expect to pay the price. About 43% of those surveyed said they would think about taking their business to a competitor if they were not given the option to speak with a human.

Some consumers will likely always want to speak one-on-one with a human representative. That's how they expect to do business and resolve problems, and health club brands shouldn't try too hard to discourage that. As the survey found, 24% of respondents actually do think companies are wasting their money investing in automated or digital customer service technologies. The reason they gave is that they "will always" want to speak to a human to resolve any issues they have. Health club operators will no doubt keep investing in technology for the majority who prefer it, but shouldn't forget about those who don't.

When it comes to fulfilling our business goals and sustaining our organizations, we sometimes let an endless wave of digital transformation happen to us, not for us. This passivity with respect to digital adoption is not always what our health club industry needs to grow sustainably.

Instead, we need to start considering technology as a tool to reframe our fitness businesses based on three universal truths about people and business:

1. Being human is a competitive advantage

The human touch is a real competitive advantage in the health club industry. When it comes to digital strategies, being human is and should always be a key big business opportunity to focus on. Think about it: technology exists because of our human nature and ingenuity. With or without it, people still need, for example, to collaborate and be taken care of by others who empathize and really care. Surveys show that automation of service is great, but when it matters, people still want to be taken care of by other people.

2. Purpose is an asset for every fitness brand

Most successful leaders in the fitness industry understand that their personal purpose drives decisions and actions. Every day, they live out authentic lives by using their passions as a guide. Great health club brands encompass everything they value, fight for, and stake their reputation on. It’s a purpose. It’s what makes you distinctively you. By knowing how technology can be used to clearly articulate and fulfill your mission, you can lean into your purpose and lead with it. The real purpose is human and never created from technology.

3. We have to always prepare for what comes next without losing sight of what is important

The convergence of digital technologies and physical workspaces is disrupting everyone from top executives to interns. And with up to 47% of jobs susceptible to digital replacement within the next decade, there’s no better time to future-proof yourself.

We should always prepare for what’s next in our fitness businesses, and so you should add two tasks to your to-do list:

First, become very fluent in technology. Do your research about emerging technology, especially if your organization is not using it yet. Take this opportunity to reshape your business experience based on your strengths and skills. Seek the advice of trusted companies, advisors, and leaders to guide you and inform you. Make lifelong learning, in general, a daily habit. Understand the latest technology and the best business and health club practices and skills needed to support it. This level of self-awareness can help defend the value of your business, help you find new ways to improve your fitness offerings and implement innovative processes that match implemented digital capabilities.

Second, listen to and understand your members’ needs. Invest in them and the people in your organization who serve them. The use of different measures like strategic vision, the ability to meet member needs in unique ways, and the people in an organization itself are being considered more and more as essentials to the value of fitness businesses. Today, value is increasingly being defined by these factors that used to be considered intangibles. But there is nothing in the end that is intangible about a great health club brand that puts people first.

As our CEO Bill Davis, myself, and our team at ABC Financial continue to work on helping health clubs successfully adopt technologies to improve their businesses, we are never going to lose sight of the fact that what is human is the most valuable and important thing. What do you think?

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Paul Schaller is Vice Chairman of ABC Financial Services, a premier provider of technology and related financial services for the health and fitness industry, renowned for exceptional client service for clubs and their members. Its market-leading billing and collections solutions automate the revenue cycle that enables owners and operators to achieve better financial performance, all in a Software-as-a-Service and cloud-based platform. ABC's comprehensive technology solutions include DataTrak advanced health club management and MYiCLUBonline extensible member engagement platforms that allow owners and operators to efficiently manage employees, members, resources, sales and drive improved member engagement. Founded in 1981, ABC helps more than 7,000 health clubs across the United States, Canada, Mexico, and Puerto Rico perform better and more profitably. ABC Financial is a Thoma Bravo portfolio company, a private equity firm based in San Francisco and Chicago (thomabravo.com). You can learn more by following Paul on Linkedin and Facebook.