As the global fitness industry continues to grow, there is an increasing number of competitors entering the field with various offerings catering to a wide range of customers. Each of these brands must find the right customer retention strategy in order to maintain a solid member base, which will vary depending on their offerings. One brand that has seen continued success in recent years is Planet Fitness, the low-cost franchise that has changed fitness forever.
With our Fitness Club Spotlight series, we take a look at exceptional fitness clubs in order to see what knowledge can be Gleaned from their success. Today, we will take a look at the history of Planet Fitness, what has set them apart, and what gym owners can learn to improve their own offerings from PF’s success. However, before we talk about their strategy, let’s go back to the beginning when Planet Fitness was just a struggling gym in Dover, New Hampshire.
Where it all began
Back in 1992, brothers Michael and Marc Grondahl acquired a fitness club on the edge of collapse. In order to save the gym and compete with better known brands, the pair reduced prices and decided to focus on occasional and first-time gym members, rather than more experienced fitness types. When this began to catch on, the Grondahl brothers and then front-desk worker Chris Rondeau recognized that there was a great opportunity to create a non-intimidating, low-cost model. The rest, as they say, is history.
In the 26 years since its founding, Planet Fitness has grown to 1500+ locations across the U.S. and Canada and changed the fitness industry forever. By focusing on the needs of customers and keeping costs low, PF has become one of the most recognizable names in Fitness and only continues to grow. And Chris Rondeau, the once front-desk worker, can now be found at the position of CEO. All of this began with a simple idea to create a new type of gym.
A new type of gym
Planet Fitness soon realized that there had been a need in the market for a new type of gym. As they began to cultivate a less judgmental company culture, Planet Fitness only continued to grow. There was something about the idea of keeping the gym to just the necessities that resonated with their audience and soon this focus on customer experience would pay off.
As this approach began to gain traction, larger brands would begin to take notice. After all, when Planet Fitness members can get the same workout at a lower cost without the expensive overhead of amenities like pools and basketball courts, you might begin to wonder if those are really necessary.
In fact, in order to keep costs low, this was the approach that the Grondahl brothers would take early on. Instead of investing in more gym equipment, that may or may not pay off, they were taking the money that would have been spent and putting it back into growing the business. This is something Chris Rondeau refers to as their ‘marketing machine,’ but more on that later.
Essentially, Planet Fitness has been able to secure themselves in the market as the low cost option by investing their extra cash flow into bringing in new customers. Then, they let their unique culture and fitness offering do the rest when it comes to customer retention marketing.
Meeting the needs of customers
For many gym owners, the question becomes ‘How do I increase gym memberships?’ A lesson that can be learned from Planet Fitness is that the best way to both gain new memberships and increase customer loyalty is by meeting the needs of customers. The original Planet Fitness team understood that there was a need to provide a low-cost, less intense option for fitness and 26 years later this still holds true.
When you are planning out your own marketing campaigns, it is worth remembering this simple lesson. While Planet Fitness has been able to make money off of their model, there may be a different model already out there that is yet to be taken advantage of. The best way to understand these needs is to ask your audience and then make the necessary changes. Sometimes it really is that simple.
Continued success and the ‘marketing machine’
Now, earlier we spoke about how Chris Rondeau refers to Planet Fitness’s approach as a marketing machine, but let’s talk about what that means. According to him, for every new member that joins, 9% of that revenue goes directly to marketing and fueling the next member join. Not only does this cut down on customer acquisition costs, but in an industry with such a high churn rate, bringing in new members is essential to staying relevant.
That being said, there comes a time where you hit the threshold of what you are capable of doing in regards to retention just based on your product or service offering. This is why marketers today, especially those in the fitness industry, are putting their focus into customer engagement and experience.
In today’s market, both current customers and potential prospects can benefit from customer engagement. With so many different digital marketing channels, brands can reach their customers like never before. However, there are countless other companies competing for the same online real estate, meaning that you need to be as engaging as possible to make it worth your while.
This is why Planet Fitness and others have sought out customer engagement platforms in order to better serve their customer base. Tools like SMS marketing can not only help customers remember to keep up with your brand, but can position your brand in their head as a trusted advisor. Like we mentioned earlier, one of the best ways to help customers is by providing them with value that can meet their needs. SMS and other engagement strategies can help here dramatically.
What we can learn from their success
By reviewing the history of Planet Fitness and the success they have had, it’s clear that they are doing something right. In order to better serve your own members, there are a few key takeaways that can be gathered from the success of PF, including:
Listen to your customer’s needs: Planet Fitness understood that customers wanted something different. They have been able to make a name for themselves by providing that exact thing.
Do more with less: There is a time and place for flashy, showy products, but that time is quickly become less often. Customers want a good experience from a brand they trust more than anything, so give it to them.
Invest in your customers: The best way to keep loyal customers around and attract new prospects is by investing in your customers. Don’t forget that they are the ones who got you where you are now.
If you are able to take these lessons from Planet Fitness and apply them to your own industry, brand, or business, you should have less issues with customer churn in the future and a loyal base on which to build your business. And don’t forget the ‘judgement free zone!’
Co-Founder, Gleantap & Mastera