Health and wellness businesses face tough decisions about how to grow. For example:
- If your current programs target women, should you grow by adding programs tailored to guys?
- If you run a fitness center, should you lower your prices when LA Fitness opens a new club?
- And should your yoga studio emphasize spirituality—or drink the corporate Koolaid and starting calling asanas “exercises”?
Choose a strategy that’s poorly matched to the capabilities of your business, and you’re in for a rough ride that can jeopardize the profitability and longevity of your company.
Consider these factors as you decide which strategy best matches your wellness business:
Growth Strategy #1: Operational excellence
These businesses focus on closely managing their day-to-day operations—the nitty gritty of getting customers and providing services to them. They tightly manage costs and productivity so that they can maintain profitability while selling at low prices. While their profit on each customer is relatively small, the objective is to sell to a very large number of customers.
Examples include 24 Hour Fitness, Bally’s and other discount health clubs, plus mass-market weight management programs like eDiets and WeightWatchers. In other industries, examples include Wal-Mart and McDonald’s.
If this is your strategy, your wellness business must :
- tightly control all costs
- standardize, streamline and automate processes as much as possible to reduce employee-related costs
- incent your employees on quantitative financial and non-financial targets, like number of new members
- aggressively use technology to reduce labor costs
That’s why discount health clubs like Planet Fitness don’t offer towel service and prefer “walk and wave” check-in processes. And that’s why they don’t usually hire floor staff or offer free child-care or sauna and pool areas that are more expensive and operationally complex to manage.
Growth Strategy #2: Innovative products & services
These businesses offer health and wellness programs, services and customer experiences that people will see as unique and/or hard to find. These businesses enjoy clients who are more loyal and willing to pay premium prices. Examples include yoga for pets and Equinox health clubs which combine a high-end trend-setting fitness atmosphere with luxury retail.
If this is your strategy, your wellness business must:
- have genuinely creative and innovative programs and services
- seek out extremely capable and innovative employees who are creative and think out of the box
- emphasize strong marketing and marketing communications skills
- emphasize continuous improvement of your programs and services
- incent your employees on subjective measures, like client loyalty
That’s why the La Palestra Center for Preventative Medicine provides only personalized programs that emphasize goals like hiking Kilimanjaro and Mount Everest—in a setting that includes private changing areas with glass showers. There’s no price list, because every client’s different—but you can bet it’s not cheap.
Growth Strategy #3: A niche focus
The goal here is to tailor your marketing to a particular market segment while offering health and wellness products or services that are otherwise widely available. These customers may be price-sensitive (as in Strategy #1) or they may value innovation (as in Strategy #2—but their loyalty is high.
Curves is an excellent example of a niche strategy. Their equipment is nothing special—but their marketing speaks to overweight middle-aged women in a way that few other wellness businesses can match.
If this is your strategy, your business must:
- have an exceptionally good understanding of your target market
- strong marketing and marketing communication skills
- strong cost management skills OR strong innovation capabilities
It’s no accident that Curves invested heavily in marketing knowledge and technology. For example, they worked with multiple ad agencies to create marketing materials tailored to cultural nuances in individual countries—and they’ve got technology that can quickly produce those materials in everything from English to Hebrew, Arabic, and Asian languages.