When it comes to managing facility finances, few investment decisions are more important than your purchase of cardio equipment. On average, health clubs pay 45.9% of their total spending allocation on cardio equipment, according to The IHRSA Health Club Equipment Report: Spending, Utilization & Programming Trends (hereinafter ‘Report’). With research showing that training on cardio units is still the top member activity, you need to choose wisely!
“How you stock your gym is a crucial component of your club’s identity and success,” says IHRSA’s e-book, Buying Exercise Equipment for Your Health Club: A Purchasing Strategy. “According to The IHRSA Health Club Consumer Report, eight of the top 10 club attractions cited by members are equipment-related.”
But just as important as making purchasing decisions for brand-new facilities, club operators of existing facilities need to know when to invest in an equipment upgrade. That decision is a bit more complicated, and one that can often be put it off.
First and foremost, reinvestment is a retention strategy. The Report found that 73.2% of club owners say that their equipment purchasing decision is based on retaining existing members. The good news is that the average ROI industry-wide supports the decision to invest in equipment upgrades. The Report found that some clubs enjoy revenue growth as high as 33% after investing 13.4% of revenue into new equipment.
But even if the raw numbers add up, that doesn’t tell you which equipment you should rely on in your upgrading strategy. You need to know what gives you the best investment to revenue return ratio.
Here are some suggestions to help make the best choices when it comes to upgrading your cardio floor:
- 1. Your members now expect the latest technology.
Consumers of all ages expect upgraded technology in the products and services they use, and that includes cardio equipment. Newer machines that integrate with wearables and “talk” to smartphones are becoming more important than ever. According to analyst CCS Insight, the wearable market will double by 2022 to become a $27 billion industry. Your members will make up a healthy percentage of that market. Make sure you’re keeping them connected to your equipment and not your competitor’s.
- 2. New cardio equipment can increase non-dues revenue.
Marketing to existing customers is a proven money maker. Research by Frederick Reichheld of Bain & Company asserts that it’s more profitable to upsell current customers than to acquire new ones. It also improves customer retention and loyalty.
Upgrading a product is synonymous with upselling, and newer equipment models can help you market more services to existing members. One reason is that newer cardio units are designed to work with group X, boot camp, heart rate, and HIIT circuit training classes. These are effective workouts that are in high demand by younger demographics. (Group training also helps boost retention, according to the 2018 IHRSA Health Club Consumer Report.) You need cardio machines that can satisfy these demands.
- 3. You’ll increase your accumulation of actionable data.
New cardio models with cloud-connected sensors will increase your member data collection and asset management statistics. Most newer units track usage of members through personalized codes, helping customers keep track of their fitness activity while keeping them loyal to a machine that “knows” them. You’ll also be able to keep track of maintenance needs with more efficiency due to increased data tracking. A popular example of this is the Apple GymKit app which is found on all Star Trac Cardio consoles, including the revolutionary FreeRunner treadmill.
- 4. You need to keep up with the latest fitness trends.
Training systems and consumer tastes change more quickly than ever these days. As mentioned, the popularity of HIIT, boot camp, heart-zone training, and group exercise is still growing. More to the point, the type of cardio units your members prefer have also changed over the years.
A great example of this is stair climbing machines, such as the StairMaster 10G. Climbers have undergone a resurgence in popularity over the last three years, while treadmills, elliptical machines, and stationary bicycles have lost some influence. According to the latest IHRSA research, the use of stair climbing machines has recently grown by 27%, the highest increase of any equipment usage.
As an owner or manager of a fitness facility, member retention and ROI are two of the prime measures of success. An updated, technologically driven collection of Cardio equipment on your floor will ensure you are planning for a prosperous year to come.