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Surviving the Competition

For the owner of a small fitness center, one of the scariest scenarios imaginable is having a "big box," national health club chain move into your market. A well-financed, national health chain can wreak havoc on most small clubs. So, what would you do if this happened in your market?

For the owner of a small fitness center, one of the scariest scenarios imaginable is having a "big box," national health club chain move into your market. A well-financed, national health chain can wreak havoc on most small clubs. So, what would you do if this happened in your market?
If you don't have at least a thumbnail answer, then you've got a problem. A marketing consultant might say you don't have a niche. I'd say it's more than that. As the owner of your facility, you need to know who you are, why your club is unique and why you are in business in the first place.

A unique identity

Many small fitness center owners start their clubs because they are fitness enthusiasts. There's nothing wrong with that; but, you owe it to yourself to create a unique identity for your facility. That identity must reflect itself in how you run the business on a daily basis, and how you defend and grow your business on a yearly basis. Then, when the competition arrives, you will be ready for it. That competitor might not even be the dreaded big-box health club - it might simply be a plethora of fitness centers that, on the surface, look just like yours. When your prospects and members view your fitness center through the lens of your competitors, what will they see? I once met a couple that owned a 30-minute women's-only franchise. They were competing against another 30-minute women's-only franchise, and there were actually several such locations within an easy drive of each other. They were trying to compete in two areas: being cheaper and having different equipment. It did not go well. At the same time, in a nearby market, a national chain opened in a highly visible location, and was sucking the life out of every fitness center in its gravitational pull. One of those facilities was an inner-city location with a long history, but a new owner. This facility had amazing character in its industrial look and back-to-basics atmosphere, but the owner chose to compete with the new national chain by dropping prices to rock-bottom levels. It did not go well.

What would you do?

Many professionals in the industry might argue that "you can't compete on price." I disagree with that - you can compete on price. But, you can do so only if you have already structured your business to be the low-price provider in your market, no matter how low prices might go. If you have already done that, then competition based on price will fall right into your hands, and you'll likely be grateful to your new competitors for highlighting your strength. Can you compete on "more and better equipment"? Maybe. But again, only if that is truly a clear and sustainable advantage for you. Most small facilities don't have the luxury or financial model to carry multiple lines of equipment. Additionally, most members of the general public are not sophisticated enough to identify small nuances in exercise equipment features. So, what would you do? You need to know the answer to this question well before you are backed into making such a decision. Before the new competition arrives or your market's circumstances change, you need to understand who you are, what you are capable of with your business, and what makes you and your offering unique and defensible in your market. The changing competitive landscape should only make you more of what you already are. Naturally, what you "already are" could be dead wrong, and, if you are in a failing position, then you'd better get back to square one and find a unique, defensible identity. What will you do if a fitness center just like yours, or maybe even better and less expensive than yours, opens up next door? Why would prospects that used to walk into your door still do so? Why would your existing members stay? Can you quantify what makes your fitness center unique, and uniquely you? Can you express it? Can you defend it?
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