SHOW 140 Scott Gillespie
Chantal: Scott, thanks so much for joining me today.
Scott : Oh, thank you Chantal for hosting me. I’m glad to be here.
Chantal: Lets sort of set the scene, so that everyone has a better understanding about Saco Sport and Fitness. Can you give us a bit of an overview?
Scott : Sure, we’re a 25,000 square foot, multipurpose club. We, for our market, which is about an hour and a half north of Boston. We’re a pretty large club in the state of Maine, which is demographically really sparse. In our industry, we’re a medium to smaller sized club. We offer 75 group exercise classes, tribe, team training is our small group training product. We have daycare, kid’s club, outdoor pool, basketball court, three group exercise studios, a large fitness floor, café lounge. We’ve been in business now 25 years.
Chantal: Fabulous. And I might be a little bit biassed, but great choice of small group training solution by the way.
Scott : Thank you. We’ve only had it four months, I’m sorry, we launched in exactly November of last year, so 12 months now and the programme is growing rapidly.
Chantal: I am thrilled to hear that. That is brilliant. Now Scott, I asked you to tell me a little bit about the business and what it was, or what are some of the things that you do within the business that are quite unique. One of the things that came up was the 90 Day Commit to Get Fit challenge or programme. Do you want to tell us a little bit about that programme?
Scott : Yeah, and I’d like to start by giving the background as to why we chose to launch it. I was fortunate enough to serve on the [Ursa 00:01:35] board of directors where some of the data that we would see about club operations as a whole, as an industry, really led me to believe that we’re not serving many of our members as well as we could. We look at retention and the results people get. It really became clear that, I think we could do a better job helping people achieve the results they want. Through exercise alone, and in many cases, self-service exercise in our clubs through access to all the wonderful equipment we offer, we really went on a quest to do more. Certainly that leads to personal training, it leads to small group training, and it leads to group exercise.
But for us, we wanted to go even farther and down a wellness road and add a nutritional component. So we created, about five years ago, a programme called The Momentum Programme. What it really was, was taking four or five of our trainers who also had nutrition backgrounds, and combining nutrition, and stress management, and exercise instruction and adoption to a programme, and sold it as a programme instead of selling personal training, which has potentially no end point. We found that members received that really well. They like the combination of nutrition and exercise. They liked that it was for 90 days. Seemed to be long enough to see really measurable results, yet short enough that it wasn’t too intimidating to enter into. We sold that programme for almost 300 dollars a month, and would sell a dozen or so a month and it was growing rapidly.
Then a couples years, two, three years ago, I was approach by Rick [Caro 00:03:13], and another gentleman named Mike Benton about a company that was growing pretty rapidly called Genavix. Genavix had created a wellness programme that was classed based, not one-on-one based. The class is 13 weeks long. It meets one time a week for two hours. It’s got a very strict curriculum that was put together by registered dieticians that is predominantly nutritionally based, but also has behavioural change skills that we teach as part of the programme, exercise adoption skills, and stress management. It truly is a turnkey wellness programme. The second hour of class after they have met in a classroom setting is a group exercise experience.
A unique thing that happens in this class is, before it starts, and after is ends, all of the participants have a health-risk assessment, including blood work. We are now a licence laboratory and we do blood work, and we do full cholesterol workups, and fasting blood glucose to go along with BMI and body composition, and blood pressure, and heart rate response to exercise that we’d always done. Now we get a real clear picture after 90 days how these participants have evolved, and achieved many of their goals and seen great results. So we’re thrilled with this programme.
Chantal: Scott, a couple of quick questions for you. How many times is that blood work done throughout the 13 weeks?
Scott : Just twice. Once before the programme starts and once at the end.
Chantal: And who within the business does that for you?
Scott : Great question. When we went down this road, it was a bit intimidating for us. What we found is the training and licencing programme really is not as hard as we thought it would be. We put half of our personal training team through that programme as well as our registered dieticians and wellness coaches that were doing the class. On staff right now, we have about eighth different people who can do those tests.
Chantal: Really? That’s fascinating. Because I think you’re right, I think that is an area where a lot of owner’s would probably be a little bit nervous to go down that path. You’re saying it’s not as difficult as one might think?
Scott : No it’s not. Certainly it was, it caused us to think and make some serious strategic decisions. Is this a road that we wanted to go down? We decided that, it’s a funny phrase, “What’s the definition of insanity? Continuing to do the same thing over and over again, and expecting different results.” We said if we want to see dramatically different results, well then we should do some things dramatically differently. So we chose to take the leap.
Chantal: Now I think it’s really interesting that you were saying it’s two hours per week that the participants get together. The first hour is the class, and the second hour is the group exercise class. Outside of that two hours a week, are there any other activities or, how do you keep them engaged outside that two hours per week?
Scott : A wonderful question, and we find that different participants in the programme are engaged at many different levels. The intent is to keep them fully engaged in the club. We offer opportunities for them to meet with personal trainers at the beginning of their programme, if they wish, and about 75% go ahead and do that. We also have them meet one-on-one with our registered dieticians, and in many cases, that evolves to more meetings with the dieticians in the club. We also, our programme coordinators when these people start will walk through all of our group exercise options, and choose the classes that are more appropriate for these folks, and create in essence an exercise programme that is group exercise based.
We give them full access to the club. Most utilise it, but we found that if we pushed too hard, too early, that it scares many people away. The reason they enjoy this programme as an alternative to joining a membership at a club is, it is supportive through the group. It does offer the education in the classroom setting, and it eases them in over this 90 period to become very comfortable in the club, so that when the programme is over, they are onboard and appropriately feel comfortable being members of the club.
Chantal: Now Scott you mentioned in there about the dieticians, and we touched on it earlier. Tell us about the involvement of dieticians in your business? Are they employees? Or are they contractors? And how are they involved, yeah, in the programme and in the club?
Scott : Yeah, so our dieticians are employees. The evolution of them in our club started with personal trainers who were acting as nutritionists. I know in different countries there are different standards and scopes of care. In the US, there’s a very big different between a dietician, which is a licenced medical professional who can bill insurance for their counselling services, and a nutritionist, which governed on a state-by-state basis. For example, in the state of Maine, Chantal, you and I are both nutritionists. In fact, anybody can be a nutritionist in the state of Maine. That doesn’t mean that there aren’t some very good nutritionists out there, but there is no standard for them to meet.
We decided to go down the road of the highest standard possible, and to employ registered dieticians. First, because of the quality of counselling they can offer, but more importantly, we’re finding because having gone through the process of applying to and being accepted as a preferred provider for the major insurance companies of the state, we are now able to bill our member’s insurance companies for most of the dietician counselling they’re receiving. They’re getting the best counselling possible, with no out-of-pocket cost. As you can imagine, that pretty dramatically increases the volume of people who want that service.
Chantal: That’s incredible. And I want to talk to you a bit more about that cost, because I think, given this is a 90 day programme, it’s obviously a long period of time. Can you give us a bit of a insight into how you do the billing for programme. Is it an upfront payment? Do you direct debit? Are your existing members paying a fee, I assume, over and above their normal membership fee? How do you actually go about that?
Scott : Well where we are today is very different than where we were. There’s been an evolution as we’ve learned about billing for the dietician services. I’ll start with how it began. It began as a roughly 600 dollar programme, which we would break up into three 200 dollar payments over the first three months of people’s membership at the club. That includes access to the club. As we found that we were able to bill for some of the programme through the dieticians and, it’s important I think to outline, what are the dieticians billing for. There are three main areas the dieticians can bill. The first and most prevalent in the world of dieticians is what’s called medical nutrition therapy. That’s what dieticians are billing for in clinics and in hospitals where people have a diagnosis of a disease, and one of the therapies is dietician counselling.
There are two other codes where we are doing a significant amount of work, which are preventative codes. One is a one-on-one code, and the other is a group preventative code. For the Commit to Get Fit programme, we are billing under the group preventative code, which pays, it’s very different from each insurance company to another, and even within a given insurance company, they may have three or four different plans, which may pay at different levels. The real challenge was learning, which insurance companies will reimburse for group preventative care, which will reimburse for individual preventative care, and almost all of them reimburse for medical nutritional therapy. It’s evolved to where we are now billing most of the members, just for the cost of the membership, and they are getting the programme through their medical billing.
Chantal: That’s phenomenal. I mean you obviously you’ve put a lot of work into getting to that point. So I really appreciate you sharing those insights with us Scott. Now I’m very keen to understand how you go about promoting and advertising the challenge. Can you tell us a little bit about that?
Scott : Sure. It’s multi-pronged. There is no one way. One of the insights we gained through the Momentum Programme was when we looked at how personal training in our industry is sold, we found that it really is a one path, or what we consider, a train tracks method of sales process. Where people would join a club, and then they would meet with a trainer, or a consultant, or an assessor. They’d have a meeting and the outcome of that meeting was an attempt at onboarding a personal training.
It works very well, but when we add additional programmes, like the Commit to Get Fit programme, or the Momentum programme, or registered dietician counselling, now that process becomes a little bit more complicated and sophisticated. I studied many sales training processes. I have acted as a sales trainer for many years, and looked at other industries to how they might onboard customers when they have multiple programme offerings. And we created a different sales process here that allows us to guide the new member into the correct programme, instead of only one programme. We’re finding now, and this is through the sales process at point of sale, and in a moment I’ll talk about the other avenues, but in the sales process at point of sale, we’re now guiding about 20% of new members who are coming in to join the club, into a paid programme. Some of those are going into personal training, some of those are going into the Commit to Get Fit programme, some are going into the Momentum programme, and some are going to dietician counselling.
We then have a second and tertiary step in the sales process, because not everybody’s ready to buy a programme when they come to join the club, they just wanted to join the club. Through those secondary steps, we are now onboarding an additional 30% of new members, into our various programmes. We’re now putting 50% of all new members into some kind of paid programme. That’s one avenue for onboarding folks.
The other ways, which are exciting, are through the corporate market. The Affordable Care Act, like it or not, has done one thing really well. It has shared the responsibility of employee health between employer and employee. Many employers are looking to invest dollars in preventative care to keep their staff healthy to reduce dramatically the sick care dollars, which are very expensive for people as they have issues like heart attacks, or strokes, or cholesterol, hypertension issues that cost so many dollars. We’re finding that corporations are very willing to entertain investing in their employees to keep them healthy, and that has become about 30% of the draw of the Commit to Get Fit programme.
The last one of course is members. As we advertise to members, who want to increase their results, and they hear about how to programme works, we’re onboarding a large number of people from our existing membership base.
Chantal: Scott, you have such an immense amount of experience, and I can tell that you’ve gotten to this place because of all of those learnings that you’ve gained over a long period of time. So thank you so much for going into that level of detail, and sharing your experience with all of the FBP family. I have just one question that I’d loved to finish up on today, and that is, if you had any advice for other fitness business owners, who wanted to go down the path of doing a programme, whether it be a 30, 60, 90 day, whatever the case may be, what advice would you give to those people?
Before we hear that advice from Scott, here’s a message from one of our podcast partners.
Andy Pickett: Hi, this is Andy Pickett from Precor. We deliver premium products and industry leading service to over 90 countries across the world. If you have a club in Europe, Middle East, or Africa, then I would love to help you with your equipment needs. You can contact me at www.precor.com, or email me at firstname.lastname@example.org. That’s A-N-D-Y dot P-I-C-K-E-T-T at precor.com. Thank you very much.
Scott : Oh wow, get ready. It’s a very different path than the traditional club path. It is incredibly rewarding to hear the stories of success, the life changing evolutions that our members go through. It is worth all of the hard work. But the advice would be, to be sure that you want to go down that road for the right reasons. This is not a turnkey, new profit centre. This requires a complete engagement of the entire leadership team, and a long-term commitment to gradual growth, to build this annuity and this new reputation of wellness offerings and preventative care, versus strictly fitness. As more and more clubs do this, the resources to help clubs overcome the challenges that we had to learn on our own will grown, and it will become easier. But more than anything, it’s something the club has to want to add to its strategic menu of services, and make sure it is truly committed to it long-term.
Chantal: Scott, I want to thank you so much. I feel like it was absolute fate that we ran into each other at club industries. I’m absolutely thrilled that you’re able to come onto the show, because I really feel like this topic that we’ve spoken about today, and the information that you have shared today is something that a lot of our listeners will value. They will get a lot out of that information that you’ve shared. So thank you so much for taking the time and joining us today on the show.
Scott : Oh Chantal, thank you for having me. I truly enjoyed being here.
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