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Let me preface this by saying, I like Equinox.

Every morning at 6am, I head into the Downtown Los Angeles location and am greeted by smiling, familiar faces. I get my workout in and the equipment is always clean — there are Kiehl’s products in the locker rooms, and fridges full of cold eucalyptus towels all around. I willingly spend my hard-earned dollars there because they provide a great experience. Equinox is the first to grow a luxury health club brand to such a scale, and for that, I admire them.

This piece is by no means a dismissive critique, or any attempt to undermine the success of Equinox.

This is me, as an outsider, looking at a successful business and trying to find ways to make it even better. As someone who has devoted my entire career to bringing dysfunctional businesses out of the red, I can’t help but run through the same process when looking at any business I engage with — even the well-oiled machine that is Equinox.

In my twenty years of work, the biggest mistake I see most businesses make is being laser-focused on getting more customers. Yes, more paying customers = more money, but that old saying we’ve all heard, “quality over quantity,” could not be more applicable in a case like this. The real focus should be on how to make the absolute most from the customer base that already exists. There are hundreds, if not thousands of members walking through the door of each club every day. How can Equinox increase the lifetime customer value of these existing patrons? Well, here’s the answer…

Let me take you back to my first days at Equinox.

As a new member, I was given a free body analysis and workout with one of the personal trainers. The body analysis wasn’t anything overly-scientific — a BMI calculator and body fat test with a plastic handheld gadget known as a caliper. This was followed by a quick lap around the gym with the trainer as he watched and critiqued my form throughout my usual routine. There was nothing overwhelmingly negative about this free experience, but there was also definitely nothing memorable about it. We’ll jump back to this day in a minute.

So, I went through this new member routine, but the first issue with this process is that most people don’t. Through some friendly conversations with club employees, I was given the figure that around 30% of new customers take advantage of the free training offer. Of those members, only 30% end up buying training packages. Based on these rates, for every hundred new signups, nine will purchase personal training. This is simply not enough for a high-end club like Equinox.

With all this money being left on the table, here is how I would adjust the model.

Initially, I would change the customer on-boarding experience. Currently, there is a gap between sign up and when the training session actually takes place. The training session should be mandatory and take place right off the bat, as part of the club orientation experience. I would tell new customers to bring workout clothes when signing up, explaining that all new members must be ‘certified’ to use the club, or to prepare to spend their first visit with one of the trainers for a one-on-one experience.

The customer understanding is that the membership can’t be activated until a needs analysis has been done. In my opinion, a new member would not see this as any detriment. Rather, they would feel like they have finally found a gym that actually cares about personal interaction, and wants to learn what their member’s lifestyle goals truly are. With the annual fees priced at a few thousand dollars per year, should an Equinox customer expect anything less?

On the business side, the conversion rate will drastically increase because of this forced transaction. With that initial participation shooting up to nearly, or exactly 100%, the potential personal training customer base has just tripled in size, while also giving customers a taste of the personalized health club experience. With this process not to be taken lightly, an experienced trainer, a closer, must be running the show.

Back to my experience with the free training session…it wasn’t special. The body composition part of took place in an office, and the workout offered nothing groundbreaking. This is not to say that the training staff of Equinox provides no value — I know many individuals who work with trainers and absolutely love it. I am just being honest when I say that the new member consultation was underwhelming. In my Equinox, the experience would be very different.

The free analysis and workout is perfectly set up to provide a big show — an emotional experience. To put it bluntly, the analysis they do is not nearly humiliating enough…

I am not advocating for staff to mock or degrade the new members, but it at least needs to be something that the customer will remember. The fact is, the bigger the show, the more training that will be sold. Get emotions involved, and make the members realize and believe that they are embarking on a life-changing journey. Take before pictures. Get measurements on the wall. Don’t pinch their waist with a caliper and show them a new machine. Get them in a hydrostatic body fat testing tank and put them through a physical stress test. Establish a true baseline starting point, get real about it, and give these customers a reason to come back for training session after training session. This needs analysis, likely the first one they have ever experienced, should end with them realizing, to get where I really want to be, I can’t do this alone. And, guess what? They shouldn’t have to…

It’s at this point where they have embarked on a journey to get better. It works because people buy transformation. By taking the time to do a deep dive into what the client’s needs are, the path to help them meet their goals becomes clear. The importance of health must be elevated. Giving new clients a dedicated trainer who will treat this orientation like a serious health appointment will make all the difference. The process may be no more than an hour, but if this hour is spent guiding them through a physical and emotional intrapersonal journey, the impact is inevitable, and eventually timeless.

Finally, with the performance of the greater company and customer satisfaction in mind, leads should be given to the better trainers who simply convert more. It may sound harsh, but never give the orientation opportunity to a lower-performing trainer who hasn’t built their clientele themselves. As long as there is time in their schedule, give it to the ones who have tenure and can convert. This should be a system where trainers make their own luck. If they can’t close deals by proving value in these trial runs, the under-performing trainers should not be spoon fed leads until the better one’s schedule has been filled. It may not sound nice, but this is a business, and it’s currently leaving money on the table.

So we’ve gone through the on-boarding process and I’ve presented my case. Clearly, my mind wanders quite a bit in between sets on the bench, because I have a more. Let’s power through the rest…

We can call this section easy money with minimal human capital. It all has to do with the availability of products for sale, and the current lack thereof. Reminder here that in my Equinox, we are seeking to define and improve the lifestyle of our members because 1) we care about the customers, and 2) it pays.

Meal planning. Don’t reinvent the wheel here, partner with a company that already does it. This service should be discussed and offered in the initial health and wellness consultation, and it will require little work from Equinox beyond that point. Allow members to have food delivered to their home, their office, or be picked up from the club each day or week. With an engaged trainer tracking a client’s progress, suggestions can constantly be made on whether to use a meal plan or not, as well as the contents of the plan. The customer is getting the attention they deserve from the trainer, and the company scores a bit of profit from each meal sold.

Supplements. Right now it’s all ordered from the internet. We read a few reviews (who knows if they’re real) and then we order it. I don’t want to be sold a miracle product in a strip mall vitamin shop. I want to speak to a trainer, or someone with real knowledge, about these products because most of us are totally unqualified to pick them out on our own. We’re buying all this stuff online because it has a 5-star rating, and we really could be consuming nuclear waste. At times, it feels like it.

As I wrap it up here, my Equinox would have one more simple rule: If the gym is open, the shake bar and clothes shop will be too. If I can go get in a full workout in first thing in the morning, and the shake bar still isn’t open when I’m done, that is an issue. Also, I can’t tell you how many times I’ve rushed to pack my gym bag and once arrived to the club, I find myself desperate buy the $12 pair of socks if the place was just open.

Don’t force members, paying $300 a month, to make a watered-down protein shake in their car, or wear a piece of office attire through a workout because they incorrectly packed. Be the elite destination for fitness and health that has everything covered. No socks? No problem. Greet your training clients with their supplements ready to go, and send them out the door with a prepared protein shake in-hand.

Get them addicted to this level of service, and they will become a great customer for life.

In summary, more customers is not always the answer. Maximizing on the ones that you have, is. Change the system. Give members a taste of the premium offering. Give leads to the people most likely to convert and reward the ones who do. Create a big show. Take customers on an emotional journey, and encourage them to commit. You’re doing them a favor. Provide members with the opportunity to buy what they need, when they need it. Put in the extra effort to create the best health club experience money can buy, and watch the sales soar.

To hear our full profit workout plan for Equinox, listen to episode four of our new podcast, Chris Collins Unleashed, on Apple PodcastsStitcherGoogle Play, or YouTube.

Think I’m onto something? Disagree entirely? Reach out to me on Twitter at @bulldogcollins. I’d love to know what you think.

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