How to best position yourself in the personal training market given four key trends shaping the industry
The personal training industry is in a state of dynamic shift. Although the industry is expected to grow over 25% in the next decade (from approximately 237k trainers to 310k) we have seen a decrease in the average salary of personal trainers in the last ten years (35k to 31k). We have also seen an increase in the amount of money spent in personal training (Approx $7.5B in 2010 to $9Bin 2013), however, there are more trainers flooding the market, who have fewer credentials and demand less money. In a recent New York Times article, the author attributes the economic downturn to driving people in other professions to personal training. As a result, this has pushed many credentialed and educated trainers to work for or open their own studios. In the last few years, we’ve also seen a push towards making personal training affordable to the masses as well as increased adoption of technology to improve exercise effectiveness. The changes described above have culminated in four trends we see emerging in the personal training market.
Technology will Help Trainers Improve Outcomes
Innovation in health and fitness technology is growing. The amount of investment and enthusiasm for fitness software and wearable technology has increased significantly over the last five years (investment in digital health and fitness topped 1.5B in 2012), with products like Nike’s Fuel Band pushing mainstream adoption. The average client of a personal trainer spends $2,500 per year on session visits, and many are now including wearable technology in their annual budget. However once the purchase is made, many clients are unsure of how to make the best use of the device and the data it provides.
With the correct software, personal trainers and coaches will be an integral part of interpreting this data, to help drive their clients’ health and performance. As low cost tablet computers become a reality, trainers will also transition from the clipboard to a tablet allowing them to receive real time information on how their clients are performing thus, improving their ability to manage more clients effectively.
The Move to Studios
Personal Training Studios have also seen a growth in market share. Many of the highly credentialed trainers are being pushed out of the “big box” fitness centers and are starting their own studios. Personal training studios are expected to grow over 125% in the next decade, from 8k studios to over 19k studios. This does not include Crossfit, which has a growth rate of over 1500% in the last five years. The average studio has 4 trainers which means that around 80k of the expected 300k trainers will eventually work in a studio environment.
With the loss of the most credentialed trainers, big box fitness centers are then faced with the decision to drop or not include personal training all together (Ex: Planet Fitness), focus on large group training with lower cost trainers to drive profitability or create a premium performance training experience for members ($100 plus per session) to retain the best trainers. Planet Fitness focuses on doing a number of things really well; clean, well-managed facilities that focus on low cost memberships with higher end equipment. This minimalist theme may be the approach of most big box facilities in the next five years. The other potential emerging trend is that big box fitness centers start (or purchase) their own studios (Ex: Equinox is already beginning this movement with the purchase of high end studios like Soul Cycle and Pure Yoga and low cost fitness centers like Blink).
Personalized Large Group Training
Large group training will also become more prominent. The growth rate of large group training has increased from 2% of all personal training in 2010 to over 5% in 2013. There will likely be an increase in spin/yoga/cross-fit blended facilities as the market expands towards traditionally “non-customers” of personal training. The key to success in the new personal training market will be providing the member or client with a comprehensive fitness plan and an explanation of how these different disciplines can work together to produce positive outcomes. More trainers will use digital planning sources to help plan and track the activities their clients are performing so they can better assess progress. This will also drive more growth in functional screen-based certifications to make sure individuals, especially those in Crossfit style classes, are performing the proper exercises with the correct progressions to reduce injury and ensure success.
Virtual/In Person Training Hybrid
In addition, the increase in new tele-technology (skype, etc), digital customer relationship and coaching management software will allow trainers to work more effectively with clients remotely. According to IRHSA an estimated 30% of health club members would like a trainer but have never used one. This can be attributed to three reasons: 1) Members don’t have the time for regularly scheduled appointments 2) It’s too expensive or 3) They want the expertise of a coach but don’t need someone “holding their hand”. This accounts for an estimated $18B in lost personal training revenue per year (calculated by charging $99 per month for one in-person session and remote training the other weeks). These traditional “non-customers” are underserved and a virtual training model with occasional in person check-in is a natural fit. Some studios have been using this model for years but have lacked a platform to manage clients and analyze large amounts of data to provide insight into their performance at a macro (all trainers and clients) and micro (individual client) perspective. Trainers and coaches, who use a virtual model to scale their business, can serve 50% more clients, and realize a income lift of about 18k per year.
How to be Disruptive and Win
Audience: Focus on traditionally non-customers in the personal training market. They include busy working professionals, who are male leaning between the ages of 28 and 50 (women constitute over 70% of the personal training market), who have an income between 80k-100k. They are apparently healthy and want a lower cost, customized program that provides accountability and motivation. Studios and trainers can benefit from focusing on those who are disenchanted with traditional group exercise classes in big box fitness facilities or the intensity and culture of Crossfit. This audience wants the individual attention and fitness expertise but limited in person sessions (once per month or quarter) combined with highly focused large group training throughout the week.
Talent: There are two types of personal trainers that would be successful with this model. These should be hired in a 1:5 ratio.
– Highly credentialed, experienced trainers and who are strong salespeople (20% of staff)
– Coaches and instructors that are less experienced but have a combination of an effective coaching style, enthusiasm and good credentials 80% of staff).
This type of staff will provide your clients with a high level of expertise at the top, creating plans, and handling initial consults, combined with quality coaching and accountability on a daily or weekly basis. This model will allow your business to scale and grow with lower cost of service. The market rate for highly credentialed and experienced trainers is between $55k-$80k and for trainers and coaches with less experience between $30k-$35k.
In order to succeed in the new personal training market, provide a more holistic experience for the client by leveraging digital information to improve management and engagement both inside and outside your facility. Market rates for large group training facilities are around $149 per month and individual sessions are about $70 per session. Therefore there is an opportunity for a new hybrid business model of unlimited classes with a high level of customization and accountability for $199 per month.
Focusing on personalizing training in mixed disciplines (large group and individual training sessions) for new customers who would not traditionally engage in personal training is a good bet for success in the next five years. Leveraging technology to facilitate better management and improved outcomes will lead to great efficiency and customer satisfaction.