| CBI Interview |
are free, but most of them, including STOTT PILATES, cost extra, as do the tennis programs. Members can freeze their memberships for up to three months, and still receive three free assessments per year. Our clubs are open to the public, and nonmembers can purchase passes to classes and other activities, but our members enjoy reduced rates.
CBI: The great recession and lingering economic downturn have proven trying for many clubs. How have yours fared during this difficult period?
TB: In 2010, we gained members, over- all; however, some people cut back on the length of the memberships they purchased. We sold more passes to nonmembers, and we scheduled more personal training sessions. Our tennis lessons were up by 20%—with just one less tennis pro—and our adult leagues and children’s clinics were also well- received. As a result, our profitability actually rose for the year.
CBI: How have you coped—both in terms of trimming expenses, as well as keeping your members interested?
TB: We watch every expense closely, including that of payroll, and have made a point of holding onto employees who can wear more than one hat. In terms of customers, we create new classes and clinics on a monthly basis to attract prospects—we just added badminton, for instance, and four people joined immediately. We’ve created a local annual triathlon and a mountain-biking competition, the Ford Focus Crybaby Classic, that’s attracted major spon- sors. And we make use of Facebook to keep our members aware of these and other events.
CBI: Industry observers suggest that, given the current economy, large chains are relatively secure; small low-cost and niche clubs represent the new growth sector;
34 Club Business Internat ional | MAY 2011 |
and clubs in the middle, such as your own, face the greatest pres- sure. Do you agree? What do you regard as the greatest threat facing independent clubs today?
TB: Generally speaking, I think they’re quite right. However, Bay Tennis & Fitness is the largest club in the area, the only one with five indoor tennis courts within 90 miles, and the only one running classes and programs six days a week. In addition, we help several private country clubs run their programs during their busy seasons. As for chal- lenges, I see several—the struggling economy, of course, and keeping staff enthusiastic and energized during this slump. The growth of franchises is also a challenge, but, I think, only for the short haul.
CBI: Much of Michigan has experi- enced a severe and prolonged economic downturn—much longer than in most other places— because of its connections with the auto industry. When do you see a turnaround happening?
TB: Yes, we have been hit particularly hard. The larger banks, which have long supported this area, have greatly reduced their exposure, which has hurt small companies dramatically. The construction trades are far off their normal business, so Northern Michigan will probably continue to struggle for at least two more years.
CBI: Consumers have certainly become more price-conscious, and many clubs have resorted to discounting initiation fees or dues. Your thoughts on that?
TB: Yes, you’re right about that, and we have lost some members going through this tough time. In a few cases, we’ve offered people a free membership for several months to help out—but on a selective, confidential basis… Other- wise, we might offer a one-month special with the occasional free training session as an enticement; however, with the exception of corporate sales,
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we never discount dues. Clients want to know that, based on their choice of memberships, they’re all paying the same price. In fact, we just quietly raised our dues between 3% and 9%— and no complaints yet.
CBI: Enough about the economy: what’s the most difficult other problem you’ve had to deal with?
TB: Nothing very dramatic, I’m afraid. We rely on wells for our water, and, last March, our main well failed. It’s not easy to drill new wells here in the winter—it could have taken two weeks—so we coped by bringing in bottled water and high-end portable toilets, and we man- aged to complete the new well in just three days. Two years ago, when our septic system failed because both backup pumps burned out, we were able to fix that situation overnight.
CBI: What sort of a competitive situation do you face in your market? Do nonprofits enter into the equation?
TB: One of the budget-brand providers recently opened a facility here, but, because of their business model, they can’t possibly offer the amenities that we can. With respect to nonprofits, the local community college makes use of tax dollars to offer low-cost fitness classes, but we estimate that, in doing so, they’re losing hundreds of thousands of dollars a year. At some point, when voters become aware of this, I think that arrangement will be challenged.
CBI: If you had to identify the factors that have contributed most to your success, what would they be?
TB: Again, nothing very dramatic— the sort of basics that you’d probably expect: a clean club; equipment that always works; systems that always function; exciting programming: those sorts of things! People love a clean club, and, something I’ve discovered, if you keep your facility clean, the other areas of your business tend to remain in good
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