Access FIT

Pareidolia… why you can’t always trust your brain

Pareidolia is the psychological tendency to perceive vague and/or random stimulus as significant.  For example, remember that grilled cheese sandwich that had a likeness of the Virgin Mary on it… I think it sold for something like $28,000 on eBay in 2004. Similarly, remember the supposed “hidden message” in certain songs when they are played backwards.

Psychologists explain this existence of this phenomenon in terms of our preference to find order in chaos (often necessary in ancient times for survival). 

It turns out that our brain doesn’t like randomness or chaos and therefore will work to ascribe some meaning to it… even if the result is completely nonsensical.  

So why the psychology lesson…

…well because I see owners and managers falling victim to pareidolia all the time.  One CEO that I know berated her health club manager because he didn’t implement spinning classes until a couple of months after a local competitor. 

Why all the angst? 

Well it turns out that the CEO’s club was struggling and she seemed to have formed the view that her much more successful competitor (who did have spinning classes) was actually much more successful because of those very spinning classes.

Of course, it wasn’t the case (it’s rarely about one thing and never about one class) and even when she did eventually get her spinning classes up and running her club was still unsuccessful… and her tenure, it turns out, was rightfully quite short.

Obviously, we have to make judgement calls every day but we have to be careful that the reality that we construct reflects reality as it is… or as business luminary Peter Drucker more eloquently put it, we must have ” …the ability to see the world as it is, not as we want it to be”.

Too much information…

…exactly how much information is too much information?

Sure we all live in the information age, sure we are all bombarded with all kinds of information every day (both commercial and non-commercial, solicited and non-solicited) and sure almost all the information we need is only a click away.

I’m concerned about both the quality and quantity of information that owners and managers are exposing themselves to.

The statistics are staggering… 1/3 of high school graduates never read another book for the rest of their lives… 42% of college graduates never read another book after college… 80% of US families did not buy or read a book last year (source Jenkins Group).

I know Thom Plummer is frequently imploring his tribe to read more (constantly recommending his favourite books…even mine) and I know that Michael Scott Scudder has personally cautioned me that owners and managers don’t want to read more than about 10 pages, or watch videos much longer than 20 minutes.

I recently gave a buddy of mine a copy of my latest report that runs just over 100 pages (free of charge) and his initial response was concern for the amount of reading he was going to have to do.

Obviously owners and managers are busy… I know I was.

The problem is you can’t grow your business on what you currently know… what you know got you this far but it won’t get you any further.

So, if you accept that you have to know better to do better… what can you hope to learn in 10 pages or 20 minutes?

The problem is that this industry has gotten used to what I call sound byte solutions… something that can easily be explained in 3-5 minutes. 

Of course, this level of actual understanding you get from sound byte solutions is pretty low… and the end result is a bunch of ad hoc tactics driving your business with no unifying strategy giving you direction.

A little knowledge really is a dangerous thing.

Fix the roof… while the sun shines

You might recall the parable of the old man with the leaky roof… he would curse and complain every time it rained because of his leaky roof, “If only I could get up there and fix those leaks… they’re driving me crazy!”

But when the rain eventually stopped and the sun came out the old man no longer felt the urgency or discomfort and so never bothered to fix the roof… but like clockwork the very next time it rained he was cursing and complaining again about his leaky roof.

As the New Year’s rush starts to die down and you are patting yourself on the back for all of your good work, remember that the sun is shining brightly right now… so there’s no better time to fix your marketing.

Don’t wait a few months when you are desperate for new members, it might be too late by then… the sun won’t shine forever.   

Sometimes you’ve got to choose

I was talking to a local health club owner recently when he revealed that he was advertising for a new manager.  After some further discussion I asked if I could see his ad.  It was fairly standard; there were a list of duties ranging from performing assessments, writing exercise prescriptions, sales, supervising staff… and business development.

While I applauded his inclusion of a business development function (which I have been recommending for years) the problem is these are two (at least two) separate people. 

The person who is highly competent at the technical skills (assessments, exercise prescription, exercise demonstration and supervision) is rarely highly competent at the business skills (sales, marketing, and business development)… these are two very different animals.

Of course, it would be good (especially for small businesses) if one person could fulfil all of these functions but it is rarely the case.

I suspect that the candidate that gets hired will be a serious compromise and the owners will be stuck with a mediocre technician with mediocre business skills… sometimes you’ve got to choose.

Business is not a success only journey

"Success consists of going from failure to failure without loss of enthusiasm." - Sir Winston Churchill

Advice for 2012…

My advice for 2011 was to become the best at something (…something that your members care about) in your local market. If you have done that my advice for this year will be so much easier to accomplish.

My advice for 2012… know where your new members are coming from (after all they don’t exist in a vacuum outside of your club).

Of course, if you are the best at something you’ll know why your new members are coming to you, you’ll know what they want, and so you’ll have a head start on understanding where they are coming from.

Here’s why it’s so important… the global financial situation will persist through 2012… consumer confidence will stay low… competition will remain tight… and traditional marketing will continue to produce a declining return on investment.

But… people will still pay for the best and if you know how to get your message to them effectively you will always outperform the competition.

So for 2012 understand that your prospective new members are real people, with real problems, looking for real solutions and they are out there looking for something… you’ve just got to convince them that it’s you.

P.S. If you need help getting you message in front of your best qualified prospects don’t forget you can still get a copy of The Lead Box Is Dead...Long Live iPOS: The Humble Lead Box Concept Reinvented for the Twenty-First Century for only $24.90.

Market hard… sell easy

Business luminary Peter Drucker famously said, “…the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.”

He’s 100% right.

A lot of people will tell you that your marketing isn’t intended to sell but only to get the prospect to call, visit your website, or come in for a tour… where your sales team can convert their interest into a sale.

I think that these people have set the bar too low based on years of mediocre marketing efforts that have gotten little or no response.

When Apple releases a new product (or even a new version of an existing product) people aren’t calling, visiting their website, or coming in to ask questions… they are lining up around the block to pay a premium.

The right marketing sells there is no question about it.

Of course, a lot of Apple’s marketing is in the product itself… elegance, innovation, user friendliness, community… what’s in your products and services?

Has the month-to-month contract been a success or a failure?

Michael Scott Scudder recently wrote in his Fitness Industry Group newsletter that the “value play” of the last decade, open-ended memberships have by far the worst retention of any type (45% or higher)… plus a very short “shelf life” (average 7 months).

When month-to-month contracts first came on the market many industry experts and pundits were heralding them as the saviour of the industry. It made sense of course… remove the long-term commitment and hefty price tag and “cha ching”.

Month-to-month contracts continue to be a popular option with consumers so why the apparently poor performance?

Actually, it makes perfect sense… month-to-month contracts remove some of the risk for consumers (price and long-term commitment)… those consumers most interested in reducing those risks are going to be beginners… and beginners are going to have the highest attrition rates.

The fact is that month-to-month contracts often aren’t a “value play” as Michael describes them as much as they are a “low risk” play (month-to-month contracts are often priced higher per month than term contracts).

What month-to-month contracts don’t do is improve the member experience or improve their chances of success in the club… beginners simply fail a month at a time.

Not invented here bias

People tend to fall in love with their own ideas… even dumb people with dumb ideas (especially dumb people with dumb ideas).

Of course, it actually makes sense if you consider that everyone has their own unique worldview and that our ideas will be consistent with our particular worldview. Prominent behavioural economist Dan Ariely refers to this as an idiosyncratic fit.

Basically, our ideas inherently accommodate our own idiosyncrasies and therefore we tend to prefer them over the ideas of others that don’t accommodate our particular idiosyncrasies.

For example, a friend of mine owns a health club in a smallish rural town. He was a previous state bodybuilding champion (about a decade ago) and his wife was also a reasonably successful regional bodybuilder and so, perhaps not too surprisingly, his website has images of himself and his wife in their “bodybuilding” prime.

The problem, for me, is that this is a small town without a big “bodybuilding” population and typical hardcore bodybuilding images can be intimidating to non-bodybuilders. Obviously, the concern is that people visiting the website will see these images and form the view that they aren’t a good fit for the club.

Dr Ariely, in a number of experiments, demonstrated that the Not Invented Here bias actually extends beyond idiosyncratic fit… it turns out that we love our own ideas simply because they are ours.

Of course, no matter how big or successful we are no one (person or company) has a monopoly on good ideas… witness the failure of Microsoft’s Zune, Apple’s Newton, and Tower Records.

It’s natural for owners and managers to want to run their businesses in a way that is consistent with their own worldview… just leave room for the possibility that “your ideas” might be hindering, not helping, your business.

So where are you getting your ideas?

You choose your members…

…long before they choose you.

Most owners and managers have a “take all comers” attitude to member acquisition. But the fact is that you actually choose your members whether you realize it or not.

You choose with your marketing… you choose with your staff… you choose with your sales approach… you choose with the size, look, layout, and upkeep of your club… you choose with your programs and equipment… you choose with your pricing… you choose with your location… you choose with the members you sign up…

With everything you do you choose your members (by the way you choose your competition too)… so in the end we get the members we deserve.

If you want better members make better choices.

The old saying goes that beggars can’t be choosers… so stop begging and start choosing.

The law of supply and demand

The law of supply and demand is an economic theory that states that, all things being equal, an increase in supply will lower prices and an increase in demand will raise prices.

Makes sense of course… as more competitors move into a given market (increasing supply) prices for memberships tend to fall as owners and managers compete for a limited membership base.

Interestingly, the diversity of offerings and lower prices in the marketplace can actually stimulate additional demand and prices will settle at a new equilibrium point... although usually lower than the initial market price.

Why then do owners and managers discount their memberships during the New Year period… when demand for memberships is supposedly at its highest?

If the law of supply and demand holds true shouldn’t we be charging a premium, or at the very least not discounting our prices, during the New Year rush?

I recall one manager who recently boasted to me that he was discounting his memberships by a full 30 percent during the New Year rush but his competitor could only offer a miserly 20 percent discount.

Of course, many owners and managers today rely on the cash flow generated by the New Year rush… in fact without it many would not survive.

And because most of these New Year’s resolution members are not profitably retained owners and managers are forced to participate in the annual cash grab, and competing means discounting… and most often the biggest discount wins.

When you don’t know where your next member is coming from the pressure to compete, even when demand is high, is always present… and competing in our industry almost always means discounting.

You’re not as strategic as you think you are

I’ve been involved with more than a few “strategy” meetings in my time and they all tend to go the same way… owners and managers trying to figure out how they can improve their business by doing exactly what they are doing right now (or some slight variation of it).

At a stretch they might swap one underperforming tactic for another… direct mail isn't doing so well for us anymore, I know lets run a radio ad.

Here’s the problem… if you knew how to improve your business wouldn’t you have done it already? As Arthur W Jones famously said, “All organizations are perfectly aligned to get the results they get.”

Everything you are doing now is perfect to get the results you are getting right now.

Of course, the corollary of that is if you want to improve your business you’ll have to do something different… and most owners and managers aren’t good at different (at least not until everyone else is doing it).

If different isn’t always better but better is always different… than logically different is the obvious starting point for better.

New ideas… you’ve got no idea

I was talking to a club owner and manager recently and he made the comment that, “we are always looking for new ideas in our club”.

Knowing this guy I’m sure he meant what he said but his actions belied his statement… he wasn’t doing anything particularly new or innovative in his club and as I discussed a few new ideas with him he was quick to offer up reasons why he couldn’t do anything right now.

When he said “we are always looking for new ideas in our club” what he actually meant was… we are always looking for ideas that other people aren’t doing that are fully tested, proven, and are guaranteed to make money.

A CEO at a non-profit that I talked to also made a similar comment, “this sounds great but can you tell me about someone else who has used this idea successfully?”

We all look at what others are doing as a guide to our own decision making. We are afraid that if we stray too far from the herd we’ll get lost, be vulnerable to predators, or walk off a cliff.

Of course, a herd mentality can hurt just as much as it can help… overpopulation, lack of genetic diversity, and missed opportunities.

Apple’s iPhone broke from the herd with its touch screen technology to position itself as a dominant player in the smart phone market while others adopted a wait and see approach that saw them relegated with the rest of the pack.

Curves, despite its more recent growth issues, became the world’s largest health club franchise with an innovative micro-club strategy that bucked the “bigger is better” conventional wisdom.

As the saying goes… different isn’t always better, but better is always different.

Every new idea starts somewhere… why shouldn’t it be in your club?

Marketing voodoo

A lot of owners and managers out there have convinced themselves that marketing is some kind of voodoo… a pinch of this, a lock of hair, some combination of esoteric ingredients, and an arcane incantation and poof…a successful marketing campaign.

It’s not very constructive to view marketing as voodoo because it takes your power away and gives it to some mysterious all-knowing shaman (read industry expert).

Of course, industry experts want you to believe its “magic” because that puts them in control… a pinch of colour, a big headline, a combination of tagline, font, image, and copy, and an irresistible offer and poof… a successful marketing campaign.

I have talked to owners and managers who have said that they are spending their time thinking of “prizes” or “incentives” to convince new members to join and I know of some consultants who will sell you a “spin and win” wheel.

It’s completely the wrong focus. We need to focus more on negative reinforcement and not just positive reinforcement… throwing prizes and incentives at new members.

Don’t get me wrong people do love free stuff… but once the free prize high wears off the negatives remain. And the negatives are why your new member will leave... free prizes and incentives are only a band-aid solution.

We know why people don’t join… and guess what, free prizes don’t address those issues.

Sure there are certain conventions to marketing but they are relatively straight forward (you can learn them in a day) it’s definitely not magic…

…if you want a more scientific approach to marketing read The New Rules of Health, Fitness, and Wellness Marketing: A Scientific Approach to New Member Acquisition, Retention, and Long-Term Loyalty.

It’s all about getting the right message, to the right people, at the right time, via the right channel… and once you understand the science behind the “magic” you’ll do much better.

Desperate times…

…call for desperate measures?

It’s funny that we often wait for times to become desperate before we consider something new.

Sure desperation is a strong motivator but we rarely do our best thinking in a state of desperation. In a state of desperation almost anything seems like a reasonable solution… even that Hail Mary play.

Of course, when things are good you don’t need to consider desperate measures… even when things are just OK there is still the hope that things will turn around if you just keep doing what you are doing.

When you are desperate is the wrong time to consider desperate measures because you lack the objectivity to think dispassionately… and when you are going well the status quo will do because there is no real motivation to change… after all if it ain’t broke don’t fix it.

It’s a catch 22 that sees most owners and managers stick with business as usual until it’s too late and then try anything and everything as the business inevitably fails.

It’s human nature I guess…

…but the real challenge is to think desperately in the good times and plan for the desperate times during the times of prosperity.

Think about what you would do before a low-pricer moves in down the block… think about what you would do if that rock-star employee left to work for a competitor… think about what your members, and prospective members, want before they ask for it… come up with that effective, low-cost, marketing campaign before you need to abandon you existing marketing…

Desperate times are precisely the wrong times for desperate measures.

Is your management style “head-up” or “head-down”?

In a recent discussion I had with a local club manager and CEO about their hiring practices I asked the question, “Is the club profitable?” The manager and CEO were somewhat taken aback and, rather unconvincingly, assured me that the club was profitable after several years of mismanagement, high staff and management turnover, and a raft of “turn around” tactics.

They went on to explain that the business was now focused on profitability and that the previous club manager had been let go because of her operations focus and apparent lack of revenue generating ideas.

Fair enough… however, after examining their “job description” for the new club manager position it was almost exactly like the old club manager position. In fact, given the job description, the old club manager would have been the best candidate for the position… it was completely operations focused with no mention of business development at all.

The reason club profitability is an issue is because an unprofitable club (or a club focused on serious revenue or profit growth) and a profitable club require two completely management styles.

A head-down management style is characterized by an operations focus, is very command and control, top-down, hands on, in the trenches, and process driven. Think of head-down as someone with a jig saw puzzle industriously sorting and assembling the pieces in front of them… no need to look up because everything they need is right in front of them.

A head-up management style is characterized by a strategic focus, is more collaborative, bottom-up, arms length, and business development driven. Think of head-up as a coach watching a football game from the sidelines, calling plays according to how the game is unfolding, substituting players based on their individual performance, team needs, and opposition tactics, and reviewing important statistics on the run… if they look down for too long they will miss something critical.

A head-down manager is best for a profitable club because they are across all the issues that keep the business running successfully. However, head-down managers will miss opportunities to improve the business because of their process-centric focus.

Alternatively, a head-up manager is best for an unprofitable (or growth seeking) club because they are actively looking for opportunities to create a successful business. Of course, head-up managers aren’t across all the issues that keep the business running successfully (relying instead on others) because of their business development focus.

The lesson… don’t send a head-down manager to do a head-up manager’s job.

Do you know where you next member is coming from?

It’s a simple question… but very few owners and managers can answer it.

It seems odd to me that we run our businesses with very little attention to where our next member is coming from. It’s almost as if it doesn’t really have anything to do with us… they just show up… we run a “special”… we send out some direct mail… we run a radio ad…

The truth is that most owners and managers aren’t thinking about where their new members are coming from (or why) until it becomes an issue… we haven’t made our numbers this month what are we going to do?

It’s a mistake… and a big one.

Today it can even be a fatal one...

...so do you know where you next member is coming from?

Hard work isn’t enough…

…in fact hard work could be getting in the way of your success.

Of course, we have all been raised on the virtues of hard work… put in the hours… pay your dues… get more clients… be in first and out last… impress the boss…

The hard work mentality is so firmly entrenched in our culture it can be difficult to overcome.

Here’s the problem… sometimes hard work is hard because it’s inefficient, ineffective, and unproductive, and no matter how hard you work it will always be inefficient, ineffective, and unproductive.

In fact, we often convince ourselves that if we are busy working hard we are doing all we can possibly do.

But no matter how much you tweak that marketing piece it isn’t going to work… no matter how much staff training you do that employee isn’t going to get it… no matter how many new members you get this month you are just going to have to replace them next month…

Sure work hard… but don’t let hard work can get in the way of good work.

Connecting the dots

When someone is characterized as “not being able to connect the dots” it’s usually intended in the pejorative sense (i.e., as an insult). Someone who can’t connect the dots lacks critical thinking skills, deductive reasoning, or general intelligence.

I know I’ve criticized some owners and managers as not being able to connect the dots before, and no doubt will again in the future. But that’s probably not an entirely accurate assessment…

Owners and managers are often too good at connecting the dots… because whatever they do they end up with the same picture. Which, of course, is the point of having the dots in the first place.

The larger challenge is knowing when to ignore the dots… understanding that the dots are actually a constraint on your thinking and a constraint on your business.

For example, as the low-pricers began to proliferate owners and managers couldn’t ignore them and retaliated by lowering their prices to stay competitive. Similarly, when Curves was in its ascendency many owners and managers couldn’t ignore them and put in women’s only areas. Neither strategy being particularly successful in the final analysis.

Connecting the dots is why there is so little innovation in our industry and why the general public thinks of health clubs as all being the same…

…might be a good idea to start ignoring the dots or at least connecting them in a different way than everyone else.

Can't see the forest for the trees?

I’m sure you’ve heard the saying “Can’t see the forest for the trees”. It means, of course, to miss the big picture because of an obsessive focus on the details.

I see it a lot on our industry…owners and managers who can’t see the business for the processes.

I had a discussion recently with one young manager (one of those process oriented people) who was fond of throwing out quotes, without knowing their origin or detail, (“we’ve got to get the right people on the right seats on the bus”) who told me quite dismissively “it’s good to have a “big picture” view but…”.

Of course, what he really meant was these problems (and his business had quite a few) can be solved with process improvements. He went on to explain how the staff needed “sales training”, incentives such as trips to industry conferences, better scripts, “customer service training”… blah, blah, blah.

It’s par for the course for process guys.

Knowing the history of this business quite well I knew that it had been through this exact same process every 12 to 36 months, for almost a decade, with successive new CEO’s and club managers and with little substantive improvement.

The problem, in my view, is that process improvements can only ever get you so far and more often than not an obsessive focus on process improvements, and not the business itself, can actually hurt rather than help the business.

Not everyone can look beyond the day-to-day to really improve their business… can you see the forest for the trees?