Welcome to The Experience Series! We are here to give the health and wellness industry a platform to learn and share strategies for member experience. In this two-part interview, we’ll be discussing how:

• Different Constituencies Require Different Value Propositions
• Building a Great Management Team Can Get You Through the Chaos
• Leaning on Your Network Can Give You an Edge
• Sales Departments Need to Think in Terms of Performance
• Building the Right Sales Team is Key
• Incentive Programs Drive Effective Sales Behavior
• Data Should Drive Your Strategy
• Your Team and Your Club’s Value Determine Your Member Experience

Daron Allen: Well hello, and welcome to The Experience podcast. We are really excited. Today we have Mr.Robert Brewster and Mr. Trent Bogh with the Alaska clubs. And guess what? Their clubs are in Alaska. Who knew? We’re really excited about having them. Nick Thornton is as always joining me here on our podcast.

In the last podcast, we talked quite a bit about some systems that are needed to be in place to really know whether your club is winning or losing. How do you keep your team motivated and producing at a high level? We thought, you know what, what better way to dive in a little bit deeper on that than to actually get some pros. [So, we brought in] some actual operators who are in the mix every day.

We’re so excited to have you guys on to talk a little bit about this today, so welcome.

Robert Brewster: Hey Daron, thanks a lot for having us on. Every time I talk with you, you’re so kind and just say wonderful things about us. It reminds me of what my dad used to say.He goes, “Always associate with people with low standards and you’ll always be successful.” So, thanks for making me successful.

Daron Allen: I knew that was coming. I knew it had to be coming, but we’re excited to be here and glad to elevate your game.

Robert Brewster: Well, our company attorney says I’m not supposed to tell people I love them anymore, butI do love you.

Daron Allen: I love you too, man. It’s so fun. So good. Nick, are you excited to have these guys on with us today?

Nick Thornton: I am. I guess to break this up a little bit, Daron and I were debating something before you guys jump on. We need to settle a quick debate before we move into talking about clubs. So, the bottom line is this: if you’re in Alaska, are you still considered the Pacific Northwest?

Robert Brewster: Well, we don’t think there is another Pacific Northwest other than us. The other guys are kind of vacant.

Nick Thornton: You claim it fully. Those others are fakers, is that what you’re trying to say?

Robert Brewster: Well, they’re a little confused. In Alaska, one of the negative things about living in Alaska is when you go to buy something and it says free shipping within the continental US, but you get charged. You’re like, we are attached to the continent. It is a little confusing too, but they’ve gotten smarter. Now they’re going with a contiguous 48.

Trent Bogh: Yeah, the contiguous 48.

Nick Thornton: Yeah, fair enough.Fair enough on that front.

Nick Thornton: To kick us off, for Trent and Robert, what are the things that you implemented coming out of the pandemic to really try to grow to where you’re at today. [How did you] get your clubs thriving again?

Robert Brewster: Well, I think the primary thing we understood in the throes of the pandemic was that a lot of people had left. You know, the effects of the pandemic on the athletic club industry were obviously different depending on where you were regionally and, in some cases, even city by city.

We didn’t know exactly where we were going to end up in that spectrum, but we knew one thing for sure. We were going to need more value to bring people back. There was going to have to be a value proposition that trumped whatever it is that they ended up doing after they left us. So, we were looking at our business and segmenting the club.

We’re in the multipurpose space generally, so there are a lot of different constituencies. I mean, what happened with our tennis members was completely different than what happened with our fitness members. Even within fitness, what happened with cardio users and strength users was significantly different.

I guess one takeaway that I came away from the pandemic with was that regardless of what kind of club you’re in, strength training is the foundation of your business (maybe other than in the studio business). That was very difficult to replicate, so we decided we were going to add more value.

We’ve gone 24 hours at all of our facilities during the pandemic. We wanted to spread people out, but we also discovered it was a very efficient way for us to operate. We have clubs over 100,000 square feet that are open 24 hours a day, unstaffed in many cases.

We put the technology and resources in place where we could operate those less expensively. So, the value came in the form of not only providing more features for them to participate in, but in a lot of cases actually resulted in lower operating costs for us.

But to get back to your original question, every constituency was different. How we were going to address the substitutes that people had put in place — whether it be home fitness equipment or running around on the local trails, whatever methodology — which unfortunately I think generally revolved around the couch for most people. We put in different marketing tactics and value propositions for each one of those.

Daron Allen: That’s amazing. I love to hear that.

Daron Allen: One of the questions [we had] was is there something that you guys really implemented that you obviously with going forward?

Obviously 24 hours. That’s a very significant move for big multipurpose. Trent, in terms of how you were having to deal with this in your staffing, your sales, and marketing, was there anything that really stood out to you that has helped make the difference in delivering that message of added value that Robert’s talking about?

Trent Bogh: Yeah. I think to start with Robert’s sentiment of leaning in versus pulling back during the pandemic, of course during shutdowns we pulled back on virtually everything we could. But the moment we opened, I think it was the determination that we were going to be efficient in spending, but we were going to lean in.

I think the first place we did it was with the management –ensuring that we had the right managers, from Regional Director down through general management and our sales management. So, I think it was leaning into the foundation of employing managers that are fully capable. To be honest, they’re doing a little bit more themselves these days.

Number two, I think knowing that we had to get out there digitally. I think, just like everyone, we pivoted. We went to a digital fitness platform that allowed us to deliver content from wherever you’re at in the world to the Alaska Club and vice versa.

We also, in some ways, opened up our transparency model on our pricing a little bit. VFP was a big piece of that because when we talk about registering for our clubs, it’s so imperative that we know every name, every number, and every email that walked in our clubs. I think that’s very similar to most people in the industry.

If you don’t start there and you don’t have that, what are you going to do to be able to convert? So, we were able to confirm virtually every person that walked in our club. That starts the whole process.

In addition to that, we implemented transparency and pricing. We really started to deliver on our online sales model. I think this has been very key for us. Not only getting our past members to re-enroll, but now it’s serving as a huge tool for us in our new member acquisition.

When we started, new members enrolling at our online enrollment site was anywhere from 3-5%. Some of our clubs are hitting 25-30% a month now through our online enrollment link. So, I think those kind of combined[to make a difference], but we always started leaning in with the management.

And I think Robert’s done a great job. We’ve engaged the management in a way that I think makes us a little bit closer. When you go through that chaotic moment, you understand how important it is to have a good foundation in a team.

Robert Brewster: The pandemic was obviously an unprecedented event, and there were very few people who had a good idea of what was going to transpire and how they were going to address the challenges associated with everything that was going on.

One of the things that was really helpful was to be able to reach out and talk to club owners from around the country and compare experiences to understand what was happening. Because there’s a different reaction if what’s going on is just happening to you as opposed to if it’s happening to everybody else.

You know, if it’s happening just to you, maybe you’re doing something wrong or there’s something you need to do very specifically to address that, as opposed to something that’s happening universally or across the country. That may be more difficult to address, but maybe other people have found solutions for that.

So, I think whenever you have a crisis like this, the relationships you put in place and the amount of effort you put into the industry to network is really going to pay off. We were really fortunate to have a lot of those resources that we could use. We leaned on other people to help us.

Robert Brewster: And to Trent’s point, there were phases. You had this crisis phase. The number of people pouring out of the clubs was unprecedented. It was one of the most difficult challenges we had. You know, a lot of people don’t like to admit that they lost a lot of members or that people left, but I think it’s almost ubiquitous that it happened everywhere. I’m not afraid to admit it.

One of our biggest challenges was how to address all the people that were trying to cancel in a way that was going to leave them comfortable coming back. They had this experience on the way out. How was that going to affect their willingness to rejoin when the time comes? So, we really focused on that during the pandemic.

There weren’t a lot of sales to be made in the early stages of the pandemic. Then, I think the next phase was critical where we weren’t really able to make quite as many sales as we were making before. We had a lot of ground to make up.

I think it would’ve been very easy to just write that off to some extent and not really push through. But we kept our sales goals high and our expectations very, very high. We were employing the same kind of ground tactics that we used prior to the pandemic. They weren’t really as successful as they were prior to the pandemic.

I think the fact that we didn’t lower our standards or our expectations set us up for the timeframe where people started to become more open to rejoining. For that reason, we were able to hit the ground running.

I really have to praise Trent and his team for this. I mean, they pushed through the pandemic where I think it would’ve been pretty easy for people to say, “There’s not a lot of fertile ground here. We’re not going to be successful, so let’s not put the money into marketing.

We did cut our marketing back a little bit because it didn’t make quite as much sense to spend that.

We were obviously being very cost conscious, although we were still pounding the phones. We were still trying to get people back like nothing had happened.

I think salespeople are like athletes. If you don’t train them, they’re going to get out of shape. So, I think sales departments need to think in the context of performance and apply a lot of the same principles that we put into athletic development.

Nick Thornton: Don’t miss part one of our discussion with Robert and Trent in episode eight of The Experience. Now on to part two.

Daron Allen: So, Trent, let’s think about some of the things that you did to really motivate and engage the salespeople. Robert’s like, “Man, we’re putting in the work, coach. We’re putting in the work and the ball’s just not going in the hoop. We’re just not getting it in the end zone.”Whatever the sport is.

Is there anything that comes to mind that worked? Where the team melded together, or you found this to be successful and this to be motivating? Are there any things that stick out to you?

Trent Bogh: Yeah. I think number one, it was always starting with the interview process. The right person always does the right thing, or most of the time does it right. They make your job so much easier.

I think sometimes we look so much at the managers or the executive leadership to motivate the leadership, but in turn we actually need those managers to motivate us at times. I think it goes back and forth. So, I think finding the right person is always number one.

Number two, we believe that our process was still the foundation of our success. We tweaked some of our steps inside of a guest coming into the club. [We had a] digital guest register, but we ensured that we were still focused there.

Like Robert said, I think sales in health clubs has morphed in my 20 years. I’ve seen it go full circle and then backwards again. I think it’s so imperative for a high-end location like us to lean into our sales force in the sense of onboarding, training, and developing.

Trent Bogh: Number three, Robert and I really talked about creating incentives that keep people moving. When you have a sales goal and you’re hitting 80% of that sales goal, we were pretty aggressive during that time. How do you keep someone motivated in the pocket?

We created a budget that stuck and it will be there ongoing. It’s in incentives budget that is not connected to commission or bonus. They’re incentives that are connected to contests, whether it’s a closeout or a weekly content. I think we underestimate how important those are for our sales team and our sales management teams.

Then lastly, we call them driver reviews. What’s driving our business? Always going back to the fundamentals of coaching: coaching in private and recognizing in public. I think I’m not sharing anything revolutionary, but I think we forget the fundamentals of coaching sometimes. Understanding that when you’re in a room with someone and you’re giving them direct feedback, it does help them move forward long term.

So, I think those are a few of the pieces that really helped move us forward after we opened back up.

Robert Brewster: You know, incentives work. One of the things to keep in mind is you usually get what you ask for when you set up your incentive programs. You have to really be careful when you’re crafting those to make sure that they’re going to incentivize people to do the things that are going to benefit you the way you think they are. We have tinkered with that over time to make sure that the incentive is aligned with what our ultimate goals are.

It’s so funny. I started reading an article in the paper yesterday, but I was laughing so hard I couldn’t finish it. The heading was, “Study Finds Incentives Might Cause People to Cheat at Work.” I’m hoping they didn’t spend a lot of money on that, you know? Although, I’m sure the government was involved.

That’s something that over time we’ve moved. We’ve moved our incentive programs around to get the types of behavior and the focus where we really needed it to be.

During the pandemic, that was one of the really tough things about staying focused on driving sales. We had a situation where we both had to set goals and drive the behaviors that would help us to meet those goals. But the reality was that we were falling short for many months.

We also needed to make sure that we didn’t lose those people because their income wasn’t enough or we got in the habit of losing. I’ve seen this sort of behavior on teams before where you get used to losing and then it becomes okay. So, there was a lot going on there.

We sometimes violated our normal time policies of not giving people a break on their incentives. We had to find innovative ways to come up with reasons why they got some other bonus that they didn’t know was coming just simply to keep them focused on making sales. [They needed to go] through the process we expected, but at the same time we realized they needed to be compensated. So, there was a lot going on there.

Fortunately, we’ve come out of that timeframe and we’re expecting to win now. I think the reason we have been able to get back there is in part due to never deviating from that expectation.

Daron Allen: Yeah, that’s interesting. I think on one of the podcasts that we had, Nick spent a pretty good amount of time talking about how much time he had to invest in overall the overall systematic approach, the systematic strategy.

Robert, it sounds to me like you guys invested a lot of time in that. So, Nick, I’d love to hear your thoughts or comments on how much time they invested in those strategies.

Nick Thornton: Well, Robert and Trent, I want to just commend you. I’ve been leading sales for 20+ years and the key thing – Robert, you said it – the inventive is going to motivate a behavior. [The question is]is that behavior in alignment with the goals?

Number two is [making sure you’re] in alignment with the team member that you’re trying to motivate. If those things get out of whack, it doesn’t work. To hear you guys say that you found that alignment and kept them motivated both for the company and the team member is brilliant. It’s hard to do.

I would say also one thing that I’ve learned throughout my career– and it sounds like you guys are on it – is that it changes. What was good today may not be good tomorrow. You have got to be willing to take a hard look at what you are facing then realign some things. Tweak it and keep going forward.

I’ll tell you, the better organizations do that in such a good way. It’s just so encouraging to hear that from others. Trent and Robert, I’m sure maybe you’ll get some phone calls from some other teams out there in the country trying to do similar things because gaining those incentives and alignment is so critical.

The other piece is (and I’ve referenced this multiple times)I’ll quote Jeff VanDixhorn. He’s probably stolen it from somebody else. I’ll tell you people are key. It is a whole lot harder to motivate somebody than to maybe have to manage them. So, hire the right people, like athletes that are driven. Maybe you have to point them and rearrange their direction a little bit because they’re so ambitious.

They may run off the tracks. Get them pointed in the right direction. It’s a whole lot hard to have to motivate them to wake up every day and do the work. If you find the right people, you win.

Robert Brewster: Well, I don’t want to embarrass Trent here, but I do very little. The reality is that almost all of this comes from Trent, and you’re absolutely right.

Robert Brewster: Oftentimes, it’s difficult to compare to other organizations. I can’t say how effectively other organizations do this or not. We like to think that we’re very data driven and we are measuring every day. If I had to say there was one thing that drives performance and has the most effect on our bottom line (and Trent’s going to know what I’m going to say next) it’s the daily sales report.

Every morning we get a daily sales report that tells us various metrics of sales performance at every location that we have. We know every day whether we’re on track to meet our goals for the month or whether we’re not on track to meet those goals.

I think it’s that kind of compass. There’s a sense of urgency that’s driven from that on a club-by-club level that really makes the whole thing work out. The other thing that we have done over the years is be really strong on keeping information available so we can go back and see how we’re doing historically, relative to our performance of the direction that we’re hoping to go.

I don’t know how many folks were able to do this, but as I mentioned earlier there were a lot of constituencies out there. There were different segments of our business and we really started drilling into that: how it had been, finding a base case.

[We looked at] what new sales were coming back. For example, young men were the quickest to come back. In fact, we’re still lagging significantly [in women members]. That’s one of the most major changes we’ve seen in our demographics: the number of women that are using the facility.

We used to be slightly skewed towards female use and now we’re at 40/60. It’s good that we have such strong male participation, but we also think it’s potentially detrimental to getting other segments of our membership back, like some of our older clients and maybe some of our female clients.

We are actively looking at each one of those sections and saying, “What do we need to do to bring those people back, to get them back stronger? How do we have to modify the facilities, set our membership policies, or just simply attack those from a marketing standpoint and a sales tactics perspective?”

There’s a lot to think about right now, and I think very few clubs in the upper segments were the other price points. Our average price point is over $120 a month. I think clubs in our segment have had a harder time getting people back.

There was really good information about this in the latest IHRSA consumer report that just came out. It was very interesting to see that the wealthier clients, who have been fairly strong constituents for membership in the type of clubs we have, have been slower to come back. I worry that that’s a function of substitutes. These are people that could afford good home fitness equipment, maybe had the space to put it in, and are having a hard time diverging from that.

So, there’s just a lot to look at.

It was interesting for me to see that IHRSA’s statistics are varying a little bit from what ours did in terms of female participation. Although, in talking to most of the club owners that I know, that’s still a segment of the market that has grown more slowly than young males. In fact, we have more young males in the club now than we did before the pandemic. We certainly can’t say that for female participation.

Nick Thornton: Well, we’ll close this out in one quick phrase from each of you. When we share the word “experience,” what does that mean to you when you think about members in your club?

Trent Bogh: I’ll start. For me, I think the experience starts with the employees: making sure that they’re engaged, that they’re excited, that they’re aligned. That always connects right with the member.

I had a leader early on as a personal trainer at a 24-HourFitness that said attitude was everything. The reality is, sometimes it gets rough and it’s been rough. But that optimistic behavior from leadership down is so important to really connect with the member base.

So, I think for me, the existing member base’s experience is connected to how the team members feel and how we feel about our organization and our clubs. I think it starts there.

Nick Thornton: Yeah, I could not agree more, Trent.

Robert Brewster: I think that fitness is hard and sticking with a fitness program is harder. I talked earlier about substitutes.We tend to think that each product stands alone. When I engage in one activity, it’s at the expense of another, whether it’s my family, whether it’s my TV time, whether it’s my time at the bar with my buddies, or whatever it might be.

So, we have to become competitive as an option for people.One way that we can do that effectively is to become more seamless in how we provide our experience. That’s something that we’re working on that’s really helped: the VFP product. In terms of how we’re signing people up, we’re trying to make that easier and more seamless.

How they check into the club, how convenient it is for people to use our product – it does not take much of a hurdle to stop people from exercising. If you’re going to try to keep me from my vacation, that hurdle better be really high because I’m getting a pole and I’m vaulting over that sucker.

If it’s about substituting for something that I may not enjoy as much (and I think unfortunately that’s the case for a lot of people and exercise) it doesn’t take but a curb to stop people from going and heading to the bar instead. We have to find a way to make fitness convenient, seamless, and as emotionally painless as possible.

Nick Thornton: No, that’s great. Thank you both for sharing this time. This was really useful. I like to reflect back and talk about [things I’ve done]. It gives us energy as leaders and I hope others are inspired by what you guys shared today. Thank you very much. Have a great afternoon.

Robert Brewster: It’s our pleasure. Thank you.

Daron Allen: Yeah, thanks guys. I appreciate it. Have an awesome one, take care.

Thank you for joining us for The Experience. Check back next time for another episode on how to take your club to the next level. For more content and to stay up to date with The Experience, follow Club Automation, VFPnext, and Motionsoft onLinkedIn, Facebook, and Instagram. We’ll see you next time.

The Experience Series is produced by Kevin Mulligan, Nick Thornton, and Daron Allen. Sound production and story editing by KevinMulligan. Creative and graphic design by Jenny Miller. Special thanks to KaylaCanon and Marissa Meyers for logistical coordination.