Is Your Gym's Equipment Killing Member Retention?

Whether you're stocking your first club or rethinking your current inventory, your equipment is your destiny. Here's how to get the decision right.

It’s one of the first things your members notice after they walk through the doors of your club—the equipment: cardio units, free weights, resistance machines, and functional gear. Beyond location and membership dues, it’s why consumers choose your facility.

Club operators have never had more options when buying health club equipment. That’s a blessing and a curse. Just browse through F.I.T. 2018: IHRSA’s Commercial Fitness Guide and you’ll be impressed—and perhaps a little overwhelmed—by the range of tech-savvy hardware available. Sometimes abundance causes anxiety.

No matter what type of club you have, equipment is always a significant capital outlay. All in all, clubs spent an average of $84,172 on new equipment in 2015, according to The IHRSA Health Club Equipment Report: Spending, Utilization & Programming Trends. Nearly half of that yearly equipment spending (45.9%) was devoted to cardio machines.

Club operators have numerous factors to consider when purchasing equipment: leasing terms, member demographics, digital capabilities, durability, etc. Estimating ROI can be tricky, but at some point, you’re going to have to do it.

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Reinvestment Is Inevitable

“Member demands shift with the times,” says fitness consultant Brent Darden. Reinvestment in equipment and facilities is an absolute necessity in the health and fitness business. The exercise environment we live in continues to be so dynamic and fluid that productive changes have to be taking place constantly.”

Darden, a highly regarded authority in the industry, suggests that you ask yourself the following questions:

  • “When did the most recent significant investment in new exercise equipment—not just a few replacement pieces—take place?”
  • “Would a walk-through of all exercise equipment areas reveal any noticeably outdated equipment?
  • Cost/financing. Is the supplier willing to work with you and your budget constraints? What about direct and indirect operating costs? Is the machine a power hog with a huge footprint?
  • Reliability. Machines that often break down cost you in repair fees and brand erosion. Equipment downtime is a retention killer.
  • Ease of use. If using the machine dashboard is as complicated as flying a Boing 747, you may want to take a pass.
  • Technological functions. Though you want intuitive controls, you also want machines that satisfy consumer demands for entertainment options, as well as connectivity with smartphone and fitness wearables/apps.
  • Longevity. Is the machine durable enough and technologically advanced to stay on your floor for a number of years?

If you consistently have a few “out of order” signs marring your floor space, you need to act: “Adopting a strategy of replacing a few pieces of exercise equipment at a time—usually cardio selections—is important to ongoing customer satisfaction and member retention,” notes Darden.

That’s smart advice, and most club operators have taken it to heart. According to The IHRSA Health Club Equipment Report, 73.2% of club owners say that their equipment purchasing decision is based on retaining existing members.

Once you’ve made the decision that you need to reinvest, Darden says this is when the real homework begins. “Clubs need to understand how equipment servicing and upgrades impact their ROI,” he says.

“Clubs spent an average of $84,172 on new equipment in 2015, according to The IHRSA Health Club Equipment Report.”

The 5 Factors of Equipment ROI

Darden notes the distinction between piecemeal replacement versus wholesale upgrades, since many clubs don’t have the margins to jump into a complete equipment makeover. But whatever investment commitment you make, you should keep these factors in mind before choosing an equipment line.

Sanjiv K. Chopra knows the economics of health club equipment as well as anyone. As CEO of Fitness Evolution, Chopra oversees 61 Fit Republic health clubs in California and Washington State. Fit Republic caters to a general gym audience, putting pressure on Chopra to stock his clubs with durable machines that cater to a wide demo. He says equipment purchase is a decision you can’t take lightly. It’s a lesson he learned when he opened his first club in 2008.

“You don't get a lot of second chances in our business,” says Chopra. “It's very important to make the best choice right out the gate.”

He lists product reliability and cost as the most important factors—mainly because you’re going to have to replace some machines sooner than you think.

“Generally, you have to replace your cardio every three to five years, because technology is increasing so fast,” he says. “Buying a cardio machine these days is a little bit like buying a laptop.”

Ease of use is also a big factor for Chopra. “We cater to young, old, everybody,” he says. “Many of our members are new to gyms, and they may be embarrassed to ask, ‘How do you turn on a treadmill?’ You need to have equipment that’s intuitive for somebody who may not be used to new technology.”

The Power of Partnership

Like many club owners, Chopra relied on an assortment of different brands in his early years, with negative results.

“A lot of companies offer only certain pieces, and so you have to buy five or six different brands to fill a gym,” he says. This leads to an overly complicated process of relying on multiple financing contracts and maintenance agreements. And quality of the products themselves weren’t consistent across different brands, he adds.

Chopra learned that your equipment supplier needs to do more than just deliver good products; they need to be good partners. If you want to increase your chances for success, go with a company that works with you on a growth mindset. Chopra found that company in Matrix Fitness.

“Matrix has helped me grow my business,” says Chopra. “I use Matrix equipment in 60 of my 61 health clubs. We have almost 400,000 members, and a lot of that growth has been based on my relationship with Matrix.”

Chopra cites three key areas where Matrix has given him an advantage “First, the product line covers a wide range. With Matrix, you can basically fill the whole gym with one brand. Number two, their service is consistent, and I deal with several different markets and market reps. Third, their products last, and their ease of use is great for my members.”

In The IHRSA Health Club Equipment Report, those responding to a survey said footprint, design appeal, and equipment brand were important criteria when purchasing equipment. But when it came to the number-one reason a club owner chose a specific equipment company, the highest priority was “business terms (including financing/leasing).”

Chopra says this is where Matrix has really helped him. “Their finance team is amazing. They ask the right questions, fight the good fight. They actually care, and they make sure the customer gets what they need.”

Matrix has also created digital tools, called Connected Solutions, that are designed to increase retention levels. These include:

  • Personal Training Portal: a web-based platform for trainers to communicate directly with members;
  • Workout Tracking Network: software that syncs apps, wearables, cloud platforms, and club programs to keep members engaged with all of their fitness data.

To discuss your equipment needs with Matrix, visit their website. And if you’re attending IHRSA 2018 in San Diego, CA on March 21-24, stop by their trade show booth to check out their equipment display and chat with a representative.

Jim Schmaltz

Jim Schmaltz is a contributor to IHRSA.org