Club Insider

About Stephen Tharrett

Stephen TharrettStephen Tharrett

Steve Tharrett and Mark Williamson are veteran club business executives and Co-Founders of ClubIntel, a consulting firm serving the industry worldwide.

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Email: stevet@clubintel.com

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"Insider Speaks"
The ClassPass Paradox: Partner or Competitor

July 2015 - Over the past year, ClassPass, an online subscription portal that extends consumers the opportunity to engage in unlimited fitness classes a week at over 3,000 studios, has gone viral, capturing the attention and engagement of numerous club/studio operators. With its announcement earlier in 2015 that it had raised $40 million in Series B funding, bringing its total raised to $52 million since launch, its Founder and CEO, Payal Kadakia, indicates the company now has a market cap of approximately $200 million and growing. Read Article...

An Enlightened Prophecy for the Health and Fitness Industry in 2016
December 2015 - Neils Bohr, a historical legend in physics, once said about prediction, "Prediction is very difficult, especially about the future." Yet, in today's universally and real-time connected environment, predictions and forecasts abound whether it's in economics, politics, sports or in the case of this paper, the fitness industry. We do not portend to see the future. Rather, we believe as Voltaire so eloquently stated in the Portable Voltaire, "It is said the present is pregnant with the future." Read Article...

Balancing What You Have the Right to Do With What is Right to Do
July 2018 - Achieving and sustaining business success in the fitness or private club business has never been more daunting. Today's competition is intense, with consumers and members having more choices than ever before. In this ocean of hyper-competition, it is understandable that owners and operators might misconstrue good business ethics in an effort to sustain membership sales, maximize share of member wallet and reduce the risk of member defection and resignation. While misconstruing good business ethics may not seem damaging, especially when the short-term outcomes of such behavior may generate temporary success, the long-term consequences could be devastating. The following quote frames it best, "Doing the right thing doesn't always bring success, but compromising ethics almost always leads to failure." Read Article...

Characteristics of Great Fitness Club Managers
February 2006 - Read Article...

Commit or Not Commit - Long-Term Contracts vs. Short-Term Contracts
November 2015 - The question of whether a health club operator should build his value proposition around offering long-term membership contracts (minimum of 12-month duration) or short-term contracts (month-to-month) has been around since the inception of the modern era in 1947 when Vic Tanny introduced the modern health club and the long-term contract. Early industry pioneers such as Vic Tanny and Ray Wilson, and later, their protégés and colleagues who operated U.S. Health and Tennis (later becoming Bally Total Fitness) and other regional firms, were strong proponents of long-term contracts. Read Article...

Competition: The Cutting Edge of Business
November 2016 - Henry Ford, Founder of Ford Motor Company, said that competition was the keen cutting edge of business. His interpretation was that competition drove businesses to improve their value proposition, enhance their business efficiencies, and ultimately, generate temporary business monopolies. Joseph Schumpeter, a 20th Century economist, saw competition as one of the storms of creative destruction, along with movements in the cultural and economic climate. Schumpeter saw these creative storms, competition being one of them, as essential to capitalism. Read Article...

Eleven Predictions for the Fitness Industry in 2018
Part I

February 2018 - On the eve of each New Year, industry experts and fortune tellers hunker down over their computers studying fitness industry benchmarks and trends, along with cultural and socioeconomic happenings to extrapolate pearls of wisdom in order to forecast, or at least predict, what may happen in the New Year. For these individuals, the goal is to be the voice of the future, an industry prophet of hope and to provide a degree of clarity on what might be expected in the upcoming year, or as T.S. Eliot so eloquently said, "For last year's words belong to last year's language, and next year's words await another voice." Read Article...

Eleven Predictions for the Fitness Industry in 2018
Part II

March 2018 - Last month, we presented the first five of eleven fitness industry predictions for 2018. They were: 1. Business Model Migration to the Poles Accelerates. 2. Cut Rate Clubs Get Cut Throat. 3. Mobile Apps become a Requirement. 4. Monetization and Engagement will be "CRISPRed" into the Industry Genome. 5. Social Fitness will become the Norm. This month, we will complete the article with predictions six through eleven... Read Article...

Health and Fitness Facility Certification - What's the Real Story?
Stephen Tharrett, CEO, Russian Fitness Group and President, Club Industry Consulting

April 2009 - Over the past several months, health and fitness club operators have been introduced to a new and exciting initiative that is being facilitated by NSF International (NSF). This initiative involves the development of standards --collectively, a process that has been designed to lead to a voluntary health and fitness facility certification process. Regrettably, most of the information concerning this NSF-facilitated effort that is currently being disseminated to the industry has come from a single source, IHRSA. Read Article...

Health Club Consumer Behavior Sheds Light On Industry's Future
The 2013 IHRSA Health Club Consumer Report

November 2013 - IHRSA, with analysis and insights provided by ClubIntel, recently finalized the 2013 Health Club Consumer Report (to be released by IHRSA at the end of November and can be acquired at www.ihrsa.org/research-reports). The 2013 Health Club Consumer Report, like its predecessors, delves into the attitudes and behaviors of health club consumers, seeking to understand the impact these current practices might have on how club operators shape their business in the future. In 1919, Marcel Proust, in his book, A L'ombre Des Jeunesfilles En Fleurs, was quoted as saying, "What we call our future is the shadow that our past projects in front of us." Read Article...

Health Club Consumer Behavior Sheds Light On Industry's Future
The 2014 IHRSA Health Club Consumer Report

September 2014 - IHRSA, with analysis and insights provided by ClubIntel, recently finalized the 2014 Health Club Consumer Report. The 2014 Health Club Consumer Report, like its predecessors, delves into the attitudes and behaviors of health club consumers, seeking to understand the impact these current practices might have on how club operators shape their business in the future. This year's report took a deeper dive into consumer behaviors and choices not mined in previous reports. Consequently, the data and insights from the 2014 report provide some new and exciting insights into how consumers and members use health clubs. Read Article...

Internet Middlemen and the Fitness Industry
Part I

January 2016 - Today's business world has been turned on its head by the newest capitalistic storm: digital middlemen. From food delivery (e.g., GrubHub, U.S. and Just Eat, U.K.) to dining (e.g., Open Table) to lodging (e.g., Airbnb) to massage (e.g., Soothe and Zeel) to ride sharing (e.g., Uber and Lyft) to fast cash delivery (e.g., Nimbl) and now fitness facility access (e.g., ClassPass and Fit Reserve), digital middlemen, or as they are more commonly referred to, Internet Middlemen, have changed the way consumers shop and buyers sell. It's a storm that is driving many Read Article...

Internet Middlemen and the Fitness Industry
Part II

February 2016 - In Part I, Stephen and Mark explained the relatively new category of Internet Middlemen and the different kinds of relationships being seen through their utilization. These relationship types include: Symbiotic, Parasitic and Cannibalistic. They also introduced two of the four major U.S. brands in this category. In Part II, they will introduce the other two major U.S. brands, as well as offer some comparisons to be aware of if deciding to use one of these services. Read Article...

Internet Middlemen and the Fitness Industry
Part III

March 2016 - In Part I of this series, we highlighted a quote from famous economist Joseph Schumpeter, which said, "Situations emerge in the process of creative destruction in which many firms have to perish that nevertheless would be able to live on vigorously and usefully if they could weather a particular storm." Well, in this final part of our 3-part series, our overarching goal is to offer up some strategies that will allow your business to weather the present storm so that, instead of perishing, your business lives on vigorously. Read Article...

Internet Middlemen and the Fitness Industry
Bonus Article: ClassPass

May 2016 - ClassPass has a dual brand promise. The first is the consumer promise built around offering incredible convenience, the flexibility to work out at a host of great studios or clubs and do so at below market pricing. The second is the promise promoted to club and studio owners (partners) that involve increased brand presence and brand recognition, increased consumer traffic, potential to garner high quality regular clients, incremental revenue growth, and finally, professional development for studio leadership. So, let's take a look at how well ClassPass delivers on its promises to consumers and studios. Read Article...

Out of the Darkness and Into the Light
The Shining Beacon of Market Research

August 2016 - Renowned market researcher and the Founder of AC Nielsen, Arthur C. Nielsen, when asked of the value of research said, "The price of light is less than the cost of darkness." His quote encapsulates the true value of market research and the understanding it can bring to bear for those who seek it out. Market research offers industry players valuable information that can literally change the trajectory of their business. Research can provide thoughtful and impactful insights into a multitude of critical elements that influence how a business performs, among them... Read Article...

Remaining Relevant Requires Change
October 2014 - George Bernard Shaw said, "Progress is impossible without change," to which he added, "those who cannot change their minds cannot change anything." The moral of this quote is that progress, and possibly equally importantly, the avoidance of extinction and obsolescence requires cultures, organizations and individuals to change. Today, more than any other time in the health and fitness club industry's lifecycle, club operators are faced with a socioeconomic and cultural environment where consumers dictate what businesses need to do to remain relevant and where those proclamations can swing overnight. The marketplace for health and fitness continues to evolve, driven by a variety of cultural, demographic and psychographic variables. Read Article...

The Boutique Storm is Cresting
What's the Play for Traditional Clubs?

May 2018 - In the 1940s, economist Joseph Schumpeter coined the term "creative destruction" that spoke to the peril and promise inherent in capitalistic innovation. He said, "Situations emerge in the process of creative destruction in which many firms have to perish that nevertheless would be able to live on vigorously if they could weather a particular storm." If one didn't know better, you would presume he was speaking about today's fitness industry, where boutique fitness studios have become that particular storm of creative destruction. Read Article...

The Commodity Trap and How to Escape It!
January 2006 - Read Article...

The Connection Between Employee Love and Profitability
June 2014 - In the quest for sustained business profitability, employee empowerment has become a topic of significant discussion and commentary from some of the brightest minds in the business world. Employee empowerment has been a foundational block of business success that has been espoused by leading business minds for decades. Not until recently has it garnered such luminary status and become a form of "Holy Grail" for businesses desirous of distinguishing themselves in the vast karaoke business environment of the 21st century. Read Article...

The Customer Experience
The New Competitive Battleground

May 2017 - According to research conducted by Gartner, the world's leading information technology research company, 64% of consumers indicate that the customer experience is more important than price when it comes to the brand they choose. Hence the quote from Jerry Gregoire of Dell that says, "The customer experience is the next competitive battleground." To further drive home the point that it's the customer experience, not the tangibles of the offering, that provide brands a competitive advantage is data from another Gartner study conducted in 2016 that shows 87% of firms in the future expect to compete on the basis of the customer experience. Read Article...

The Fate and Fortune of the Health and Fitness Industry
Part I

April 2015 - The health and fitness facility industry is an evolving entity, both domestically and internationally. While it is more of an accepted part of the American culture and lifestyle than it was 40 years ago or even a decade ago, the industry remains somewhat susceptible to the whims of evolving global demographics, trendy popular culture and macroeconomic conditions. The fate and fortune, or destiny if you like, of the health and fitness facility industry is now being influenced by these evolving cultural, demographic and economic forces. Read Article...

The Fate and Fortune of the Health and Fitness Industry
Part II

May 2015 - The health and fitness facility industry is an evolving entity, both domestically and internationally. While it is more of an accepted part of the American culture and lifestyle than it was 40 years ago or even a decade ago, the industry remains somewhat susceptible to the whims of evolving global demographics, trendy popular culture and macroeconomic conditions. The fate and fortune --or destiny if you like-- of the health and fitness facility industry, is now being influenced by these evolving cultural, demographic and economic forces. Read Article...

The Fate and Fortune of the Health and Fitness Industry
Part III

June 2015 - The health and fitness facility industry is an evolving entity, both domestically and internationally. While it is more of an accepted part of the American culture and lifestyle than it was 40 years ago, or even a decade ago, the industry remains somewhat susceptible to the whims of evolving global demographics, trendy popular culture and macroeconomic conditions. The fate and fortune, or destiny if you like, of the health and fitness facility industry, is now being influenced by these evolving cultural, demographic and economic forces. Read Article...

The Financial Power of The Crowd
Part I

August 2015 - Raising capital has never been an easy task for entrepreneurs, and for most entrepreneurs, launching a business raising capital can be the "straw" that often breaks the camel's back, the challenge most likely to derail their business vision. Until recently, raising equity for a business venture, be it start-up capital or growth capital, was comparable to a soldier navigating a minefield without a mine detector. Read Article...

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