Reposted from www.abcfinancial.com
Sometimes the best lessons I’ve learned about business come from seeing how others face growth, opportunities, failures, and challenges. Enter the mega consumer coffee brand Starbucks. Last year Starbucks surpassed McDonald’s in terms of U.S. location count, at more than 14,000. Since 2013, according to Technomic data, the chain grew locations by an aggressive 22%. Consider the sheer volume of customer interactions: In the U.S. alone Starbucks serves 38 million consumers every 30 days and on average those customers visit stores 6 times each month. The brand handles 3 trillion customer transactions per year globally.
Despite their great success, Starbucks is facing a lot of challenges, but it is still one of the greatest successful global consumer brand stories of our time. What can health clubs, gyms, and fitness facilities learn from this behemoth? Well first let’s reflect on a prior article I shared recognizing that the age of the consumer controlled fitness industry is here. Here’s a quote from that post:
“Customer centricity is a mindset that companies must adopt throughout the entire organization to thrive in the digital world.”
Starbucks has certainly attempted to be a consumer-centric business and one mindful of the implications of a digital world. What Starbucks is doing to win the customer and overcome its challenges can serve as a good road map for what fitness brands should be thinking about when it comes to winning over the modern fitness customer. While there are unique ills and challenges for large scale global brands that might seem irrelevant to a single, regional, or national health club, gym or fitness brand, truthfully when it comes to the customer they don’t care what your business problems or size is. In the age of the customer, customers just want what they want and businesses will either figure that out and win or fail to do so and die. While this is true for Starbucks and other global brands like Apple or Samsung, it is also true for fitness brands no matter their size, shape, or business model.
Four Lessons For Fitness Customer Success From Starbucks
As successful as Starbucks is, the business has experienced a lot of trouble during various phases of its life cycle. Many experts think Howard Schultz, the face of the brand and its primary archetype for nearly four decades, has saved the company three times during its history. So there is a lot to learn from the business. Here are the four lessons I think we can learn in the fitness industry from the Starbucks story.
1. Differentiate To Compete
In a highly competitive market, it is imperative brands remain differentiated from the market as a whole. Few competitors succeed in developing a business model that beats Starbucks in all four advantages: beverage, store setting, service, and culture. They also continue to innovate and stay on top of differentiation with their creating an experiential “roastery” concept, watch the video here. Michael Porter was correct, “A company can outperform rivals only if it can establish a difference that it can preserve.” In the fitness industry competition has soared in the past decade so this is more important than ever.
Growth in fitness has come mainly in two distinct arenas: fitness and boutique studios and low-cost budget models. Programming, convenience, unique services, and experiences are separating competitors. Having a clear differentiation strategy to be competitive, like Starbucks has, is key to winning the customer. Watch this video about 1Rebel in London to get an idea of how some fitness concepts are differentiating.
2. Customer Experience Really Matters
Experience is created through an obsession with ‘Attention To Details’. The Starbucks team carefully designs every store to enhance the quality of everything the customers sees, touches, hears, smells and tastes. Particular attention is paid to ‘Aroma’ as it plays a vital role in cafe experience. The smell of brewing is designed to linger around to welcome consumers. Associates are not allowed to use perfumes as the beans would absorb the order. Baristas are trained about the art of having happy conversations with the customers so they can build personal relationships with them.
Executing unique experiences in fitness businesses, like with Starbucks and its new “Roastery” locations, is absolutely a must to win the customer. Ambiance, great employees, outstanding programming, omnichannel services, and more than anything “Attention To Detail” is essential to winning the fitness consumer today.
3. Culture Is A Key To Execution
Starbucks has a clear vision, mission, and values which it works hard on communicating and embedding in how it conducts its business around customer happiness. Check this out to see what I mean. This focus has a direct impact on customer experience and loyalty of consumers. When it comes to Net Promoter Score “NPS”, for example, Starbucks applies tactics to deliver customer satisfaction and loyalty at a high level, contributing to Starbucks’ NPS of 77 in 2017. It’s culture has a lot to do with this high score. The organizational culture is based on belonging, inclusion, and diversity. The internal cultural situation is reflected through the company’s human resource development programs and baristas’ interactions with customers.
Great fitness brands, like Starbucks, focus on creating wonderful cultures to attract fantastic people who are a central part of delivering experiences that customers love.
4. Using Technology Wisely Is Smart
Delivering great experiences requires great people, a great business model strategy, and the smart use of technology with the right technology partner. Starbucks was an innovator in the adoption of mobile apps for ordering and payment for example. Starbucks drives their technology to “power moments of connection.” In other words, they understand applying technology contextually around the customer experience, aka “moments of connection”. They continue to innovate and are, for example, experimenting with home delivery. Starbucks’ approach confirms the findings and thoughts addressed in Kelly Card’s recent article Why Data Is Going To Become A Big Differentiator For Health Club, Gym, and Fitness Studio Businesses; they use analytics in their business to gain consumer insights, enable hyper-personalization, and automate key processes. These are all very wise moves and fitness business operators should learn from this and do the same to win the customer today.
The best fitness, gym, and health club operators are focusing on this approach as well. The smart use of technology in the context of thoughtful customer experience is an underpinning of great operators and competitors in the fitness space today.
I think we can learn a lot about successful brands and competitors in other industries when considering how to compete for the modern fitness consumer. If you want to learn more about Starbucks’ secrets pertaining to how it operates and what its strategies are check these out.
So what do you think about the four lessons we can learn from Starbucks for the fitness industry and how they apply to gym, health club, and fitness businesses in general? I’d love to hear your thoughts and the team at ABC would be delighted to help you with your plans and strategies around your fitness business.
An Outsourced CEO, Jim Thomas is the founder and president of Fitness Management USA Inc., a management consulting, turnaround and brokerage firm specializing in the gym and sports industry. With more than 25 years of experience owning, operating and managing clubs of all sizes, Thomas lectures and delivers seminars, webinars and workshops across the globe on the practical skills required to successfully to overcome obscurity, improve sales, build teamwork and market fitness programs and products. In addition, his company will buy gym equipment from gyms liquidating or closing. Visit his Web site at:www.fmconsulting.net orwww.jimthomasondemand.com.
