Dan Benning uses a simple strategy to grow 24 Hour Fitness Featured

8:14pm EDT May 31, 2011
Dan Benning uses a simple strategy to grow 24 Hour Fitness

Dan Benning gets that fitness is hard. That’s why, when he took over as president of 24 Hour Fitness’ North Division in 2007, he wanted to help his company make it even easier.

While 24 Hour Fitness’ mission of “easy and accessible fitness” was simple, Benning saw that it wasn’t always translating into the fitness experience of customers and employees.

Potential customers and fitness club members often had to jump through hoops to find, join and use the facilities. His noticed some of the 10,000 employees at the clubs struggled with a lack of leadership and were either scrambling to solve problems for customers or passing off responsibility with little accountability. To grow the company,  he wanted to take the mission and really put it to work at his 200 clubs.

“From a vision, it’s not really complicated,” says Benning. “It’s ‘Fitness is hard enough. Let’s make it easy for people coming into fitness to make it easy to join and make it easy once they have joined; once they have joined, make it easy for them to use our clubs, and then for our team members, make it easy to run so they can spend time with our members and their team members.’”

Simplify the sale

The first problem was, when it came to buying gym memberships, consumers were conditioned from past experience to anticipate a hard sell, run-around pricing games and an overall negative experience. Making fitness easier and more accessible started with changing the negative perceptions consumers had about fitness clubs in general.

“They hated the sales process,” Benning says. “They hated it because it was a lot like a timeshare. It was a lot like buying a used car 20 years ago.”

Because much of customer’s alienation stemmed from the pricing games involved with buying a membership, Benning decided to getting rid of price negotiation completely. The clubs would offer one fixed membership price for everyone.

“Buying a gym membership five years ago – and even today with most of our competitors – is not a pleasant experience … We’re very focused that from a pricing standpoint, you know what the price is,” he says. “There is no high-low, ‘Let me go talk to the manager’ type stuff. We think we offer a great value. We go out with that great value and we give that to the consumer.”

If you don’t have transparency in the information you give customers, it’s hard for them to trust that they’re getting a fair deal. So Benning also spearheaded improvements to the 24 Hour Fitness USA Inc. website to include actual membership prices and better information about club locations. The company also became the first fitness club to let consumers sign up for membership online or by using a mobile phone.

Making these kinds of customer-centric improvement in the sales process benefits customers as well as employees. When customers are armed with more knowledge upfront, they are more empowered coming into the sale. They can spend less time weeding through information and more time getting answers to their questions. Pricing transparency also takes pressure off employees to sell, so they can really focus on helping customers, who are again, more receptive to the information they’re receiving in the first place.

In other words, when you make it easier for customers to buy your product, you make it easier to sell.

“The makeup of our sales force – it’s not about the art of the sell – it’s about interacting with friendly people who are in tune and focused on helping you achieve your fitness goals versus what’s in it for them,” Benning says.

“[It’s] taking away those barriers so that the consumer that already has enough trepidation about walking through the door…and take what the consumer is expecting, which is a high-pressure sale, and turning that into a ‘Here’s how we can help you,’ and introducing them to the folks in our clubs, and showing them all the things that they are going to be able to do to help them achieve their goals. That’s been a difference-maker for us.”

Listen to your customers

Making the customer experience easier starts with the sales process, but once customers buy your product or service, it’s the experience they have after that that determines the reputation and success of your business.

To find out how to improve the customer experience – making the clubs easier and more convenient for members to use – Benning decided to go straight to the source.

In addition to using customer surveys, 24 Hour Fitness became the first company in its industry to start measuring customer satisfaction scores through J.D. Power and Associates. Benning and his senior managers also dedicate most of their time to visiting clubs in person to get feedback from employees and members.

“The difference between today and four years ago in our clubs – there’s a significant difference in the way that we’re focused on the member experience,” Benning says.

He says the answers to a more successful company can be found in the clubs by talking to employees and customers.

“That’s where we find out what we’re doing that’s working and what we’re doing that’s not working. Some folks have the principle of you call the plays as the officer from the tower and you hope it gets run. We believe that you find the answers out in the clubs, you make some decisions and then you spend time with your team members and your customers, listening to their questions, concerns, getting them to understand why you’ve made changes. You’ll often find that you’ll tweak what you do based upon members’ and team members’ feedback.”

When it comes to making changes to improve your business for customers and employees, Benning quotes Will Ferrell’s fictional race car driver, Ricky Bobby in saying, ‘If you’re not first, you’re last.’

“As soon as you start waiting for someone else to do something, you’re going to lose,” he says. “That’s in everything. That’s in business. That’s what’s going on in your office or your club today. Don’t wait for someone else to talk to that member. Don’t wait for some other company to beat you to the punch because you’re worried about will it work or not. It’s ‘Figure it out, involve a bunch of people and be first, because if you’re not first, you’re last.’”

For example, when club feedback indicated that members found it a hassle to carry membership entry cards, 24 Hour Fitness implemented cardless check-in using fingerprint IDs. As the first fitness chain to do so, it has already enrolled around 2.5 million members in the program.

“Our members love it,” Benning says. “Our team members love it because it allows them to focus on the member versus the actual card checking experience. So the actual interaction of team members with our members has gone up based upon that process.”

The more opportunities you have to get customer feedback, the more data you have to use for continuous improvement.

“Our members know that if there is something going on that they really like, they’ll serve it up,” Benning says. “If there’s something going on that they don’t like, they’ll serve it up and we’re quick to act on what those are. We have ways for the consumer to communicate with us if they have an issue, and that is whether they just want to recognize a team member in a club or whether they want to say ‘Hey, this is going on in this club and I don’t like it.’ We have it built so that the consumer can do that via the phone. They can do that through our website. And as it relates to how we react to that – there’s all a mechanism around that that makes sure the consumer’s issue is handled, good or bad.”

Empower your team

Because most of the clubs are open 24 hours, keeping the clubs clean, equipment working and customers satisfied is an around-the-clock job for 24 Hour Fitness employees. Benning recognized that the new vision couldn’t just apply to customers; he needed to make fitness easier for employees too.

“I’m a big believer if you make our clubs easier to run for our team members, they can spend more time with their team members and with their members versus trying to figure stuff out. We’ve taken a lot of the junk out of running the clubs and work hard to make it easier through systems, processes and technology, so that our team members can do what we want them to do, which is serve those who serve our members and serve their members,” Benning says.

For instance, having different leaders in different parts of the club was confusing because it fostered a pass-the-buck mentality among employees in aligning goals and handing issues. So Benning first added one leader in each club to have final say and authority over decisions.

Secondly, he increased opportunities for employees to learn about the organization, implementing new programs such as 24 Hour Fitness University and management interest days to show employees potential career paths, and increase internal transparency about how the company operates.

“Transparency is sort of a cornerstone to trust,” Benning says. “We do everything in our power to make sure our team understands what our vision is, where we are trying to take the organization, what role we play in it, and if they want to play a bigger role, to have an opportunity to do that.”

Building that trust is the key to getting honest feedback from employees. The value in connecting with your employees on a personal level doesn’t just come from sharing your vision firsthand, but  opening up communication so you can find out what they need and provide them with the resources and support need to be successful.

“What people forget is when you’re 20 years old and you see the president, or regional vice president, or division president, or CEO or whoever walks into their store, there’s a lot of scary mystery associated with that person … and that gets in the way of creating a great experience for our team members,” Benning says. “I spend a lot of time connecting with team members, getting to know them, getting them to understand that I’m a real person, and I need their help and that they’re important.

“Sometimes people look at that as taboo, that you shouldn’t get to know people past a business standpoint. I think that’s a bunch of malarkey. I believe that the more connected you are to your team, the better off that you’ll be.”

Not surprisingly, as the company’s employee engagement scores have improved, its J.D. Power customer satisfaction scores have also gone up. In spite of a recession, Benning has led 24 Hour Fitness to grow in workouts, improve in membership and consistently increase its satisfaction scores of members and team members, even achieving an A-plus rating from the Better Business Bureau.

“We are the first club chain to achieve that rating,” he says. “We’re proud of it. Our team members are proud of it, and it goes back to if you focus on the consumer, you focus on your team members and you have a simple strategy to deliver on your service promise, great things can happen.

“You have to have a plan. You’ve got to share it, and you’ve got to share it a lot. And you do that in lots of different ways. You do that in big meetings. You do that in town hall forums. You do it in small team meetings. You do it on phone calls. You do it in your written communication, but that communication of what you are trying to do is clear. Whatever you communicate, tie it back to what your vision and plan is so people understand that it’s not a poster on the wall, but it’s the way that you operate.”

How to reach: 24 Hour Fitness, (800) 224-0240, www.24hourfitness.com

The Benning File

Dan Benning

North division president

24 Hour Fitness USA Inc.

Born: Des Plaines, Ill.

What was your first job?

I’m a high school graduate. My dad died when I was a junior in high school and my brother was in college, so I worked through high school and then after high school to help put my brother through college. At the same time, I figured I’d get him through college and then I would go to school. The circumstances came where I had the opportunity to be a police officer, but I decided, based upon my grandmother not wanting me to go do that … I started selling on the sales floor.

I was a sales counselor at Circuit City and I was making a lot of money and the rest is kind of history. I did 20 or so jobs at Circuit City. I’d call myself self-educated because I was fortunate, from everything to being at the right place at the right time to I believe I work harder than anybody else. I may not be able to always outthink you, but I promise I will outwork you.

What do you do to regroup on a tough day?

I love sports, and that’s why I think I have the best job in the world, because I get paid to work out and I get paid to help others lead a healthy lifestyle and workout. So I do. It is an amazing stress reliever and to relax and do something positive for yourself. I’d also tell you that I love team sports. I was fortunate enough to make some time to coach my son’s high school football team this year. It was an unbelievable experience. I will play you in anything. I like the team the best, but I’ll play you in tiddlywinks. I’ll play you in flag football, but I will play with you and compete with you on anything that you want to compete on.