THE HYBRID BUSINESS MODEL PLAYBOOK

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DISCLAIMER

BFS is agnostic: our goal is to simply provide you with the best and most information possible, so this playbook may contain different points of view and information based on different experts’ experience and business models.

Table of Contents

INTRODUCTION

The ever-changing fitness world has been shifting for decades to meet the needs of its customers, but the twenty-first century has shown itself to be a much different arena. No longer is it sufficient enough to simply dominate the local market. Today’s customers expect a much larger net to be cast. Businesses are expected to make an impact nationally, if not globally. 

 

Adapting to a changing world is difficult, but with the right strategies, a consistent product, and the drive to get it done, the global market is just waiting to be tapped.

THE CHANGING MARKET

The fitness industry seemed to swivel overnight. Expanding chains and boutiques were thriving pre-pandemic, but when COVID-19 made landfall, the shutdown hit swiftly. 
 
A recent RunRepeat Study shows some crucial details about where the fitness industry may be headed:
 

 

These numbers may be startling to facility owners globally, but true perspective lies in this number:

The Average Athlete normally exercising 1-2 times a week has increased activity during quarantine by 88%.

 

So what does it mean? People are finding new ways to incorporate an exercise routine into their everyday lives, but they’re doing it without the need of a physical facility. They have already or, have at least considered, cutting out the middleman and marching forward on their own. 

In other words, the fitness industry must reassess how to reach new clients from a distance if they wish to bridge the gap that lost memberships may have made. 

So ask yourself this question – Can your business continue to operate at only 50% membership? If not, adjusting your business strategy now can only help you adapt for a future when sustainability will be more crucial than ever. 

ADAPTING TO SURVIVE

Surviving the ever-changing fitness industry requires innovation, but when unforeseen impact strikes, as with the COVID-19 pandemic, businesses that are confident in their flexibility evolve into the businesses that survive moments of crises.

Industry models, however, are not always indicators of success. They are a path of least resistance for optimizing the ability to reach as many potential customers as possible, including those beyond the 10-mile driveable radius of your facility.

Surviving challenging times requires a few very important concepts:

  • Value in the Service

When members continually invest in a business’s services, they are saying they believe in the results you have and will continue to provide. 

  • Knowing Your Audience

When members feel valued and appreciated, their belief in your provided services skyrockets. Creating community from the industry’s intense competition creates lifelong partnerships rather than one-time purchases.

  • Using Tech to Get Ahead

If anything, the pandemic has emphasized the demand for tech tools to deliver services traditionally reserved for in-person models. There’s no longer any need to restrict accessibility because the world’s modern framework allows businesses to reach their customers at any time, anywhere. 

Finding the most efficient business model for the kind of package your business offers is critical in reaching large numbers of people, but building community can prove to be tough when your list of clients begins to expand and the amount of time needed to maintain your success doesn’t. 


So the question becomes – 

How can your business foster a sense of community without sacrificing growth?

WHAT IS THE HYBRID BUSINESS MODEL?

Merging the best features of the traditional gym framework with the accessibility and ease of an online platform is critical in today’s world. The Hybrid Business Model for the fitness industry does just that–implementing a virtual plan of attack that makes sure you continue to grow your membership without losing the sense of dependability necessary in fostering thriving communities.

For the modern studio client, the Hybrid Business Model offers the best of both worlds. It keeps your business grounded in the community and the people that have built its identity, while offering the digital means to access information and data any time or anywhere.

As a studio owner, a virtual wave of potential clients are looking for the exact services you’re willing to offer. Finding the right online platform is critical is finding success in the communication piece of virtual fitness. 

Implementing a Hybrid Business Model into your fitness facility’s framework: 

 

 

Finding people who feel as passionate and excited as you do about your fitness philosophy should not be difficult. The Hybrid Business Model applied to the fitness industry will not only open doors to a new sense of community for your already established one, but will also provide you with the technological means to help more people lead healthy lives. 

PRESERVING COMMUNITY

Community is more than just the place you call home. It’s more than loyalty, although those things are definitely important for cultivating the many circles of people that come and go from our lives, but the one thing that’s non-negotiable seems to be our responsibility to invest in the places and the people that allow our local communities to thrive. 


The numbers from
The International Health, Racquet, and Sportsclub Association (via Fitt Insider) from 2013 to 2017 support these beliefs:

  • Traditional gym memberships increased by 15%, while
  • Boutique studio memberships increased by 121%. 

With a disparity that drastic, it’s clear that the word community has taken on a new meaning in the fitness world. Having unconventional, fun and functional options in the industry has seemingly pushed the market away from the one-size-fits-all approach to building programs dedicated to the true well-being of its members. 

Balancing on-the-go work schedules and family lives while maintaining a healthy lifestyle had made for a seamless transition in our modern age. It makes sense that combining fitness and fostering positive relationships has taken a crucial step forward in the past few years.

 

Even so, the fact remains that community is only as good as the people that comprise it.

There will never be any substitute for that, but the boom of local fitness facilities taking pride in their abilities to foster progress over competition, promote healthy lifestyles, and teach functionality is and will continue to be critical in making happier and healthier communities around the globe.

STRUCTURING MEMBERSHIP FEES

Naturally, the traditional membership fee model has evolved as the industry has changed over the years, creating freedom in the way facility owners can choose to run their businesses, but as the market grows increasingly more competitive, so does the need for owners to think critically about the importance of justifying the cost of their programs. 

What does your facility offer that others can’t? 

 

Setting your facility apart from others means knowing your competition. This means two different things when it comes to physical and virtual memberships. Consider the classes and/or amenities you currently offer and the future potential of their framework for your business. What does it actually cost to offer the physical services you do (i.e. trainer costs, rent, etc.) versus what you offer to your digital following?

Appraising Physical vs. Digital Programs

Fitness industry customers generally compare what it would cost to visit your studio a single time, which means you should assess your physical membership fees on the needs of your program, the costs of your studio space and equipment, as well as the profit margins you intend to make. From there, calculating the 100% cost for one studio visit allows you a baseline for structuring the longer memberships studios generally offer. 

The digital landscape differs from the physical because program offerings change, so adjusting your membership fees to 40%-60% of your physical offerings allows you to balance the offerings that can no longer be provided, like equipment and physical space, while still accounting for the sustainable profit margin that will keep your business thriving. 

While the fees to access your physical and digital programs may differ due to what you can offer, it’s important to recognize that the approach to content never wavers. With a holistic mindset, membership fees become a welcome exchange for an immersive personal and communal fitness experience.

BUILDING HOLISTIC VALUE

We are all athletes. We come from a long lineage of using movement to not only survive, but to grow and evolve into who we are today. The 21st century may not be as harsh as the era of hunters and gatherers, but we have learned how to maintain our bodies and our minds to preserve optimal performance from them. It’s in our DNA. It’s just a matter of accessing it in a way that serves the “whole” you, not just the physical part. 

Too often, big box gyms push for an unequal distribution of physical fitness in lieu of the mental, but our minds and bodies are synergistic. The interaction between their total effect is always greater than the sum of its parts. Today’s fitness world curates the best holistic minds in the business because its members crave the synergy their minds and bodies can offer. Remember:

  • Don’t Sacrifice Digitally

Busy means something totally different than it did even five years ago, so naturally, the fitness world changed its philosophy to meet the needs of its clientele? Utilizing technology to take your platform from offering the basic rote workout plans to building relationships with clients will not only build success among your members, but it can also be done as easily (if not easier!) in the virtual sphere as in your physical framework.

  • You’re the Expert, So Model Your Success

Healthy lifestyle success stories provide inspiration and, in the fitness industry, inspiration is gold. Studio owners’ success stories are key content nuggets that can consistently generate membership. When members believe in your leadership, they come back for more, both physically and digitally. They see that real results are possible. In addition, modeling success can create diversified revenue from a number of different platforms without drastically increasing your workload, so merging mental and physical health is always a win-win.

  • Hard Work Builds Character

Becoming better synergistically is no easy task. It takes time, a whole bunch of effort, and resilience. It’s a lifestyle shift. Members need to know that a holistic approach to fitness is not an overnight fix, but with teamwork and mutual accountability, they can be success stories, as well. Drive that motif home on all platforms. 

Incorporating holistic value into your studio’s fitness programming is essential for both your in-studio members and digital following. Creating healthier lifestyles promote success and, with those stories, physical and digital revenue streams start to become synergistic themselves. 

HOW TO "BE THERE" WITHOUT "BEING THERE"

Cultivating digital partnerships in the fitness industry may seem daunting, but the benefits of diversifying revenue streams in a market that is saturated with competitors and threatened by post-COVID restriction guidelines is critical, so how can you set yourself apart? How can you coach through digital distance without sacrificing the value that comes from physical presence? 

You can’t.

Creating a digital framework that rivals your physical one is practical, but they are different mechanisms and, because of that, your successes in each will happen by different means. The definition of community changes as you enter the digital landscape, so knowing how to build sustainability, then learning how to manage it from afar becomes increasingly important, particularly in our current pandemic-driven circumstances. When you add consistent biometric data to a productive digital community, coaching from afar becomes a successful approach to fitness:

 

1. Designing a Clear Purpose/Goal

When goals are transparent, sustainable, and affirmed, your voice becomes a guide rather than one of an instructor. Tracking biometrics using Cyborg’s data collection tool is as easy as it gets when it comes to building individual and class workouts, offering live feedback during sessions, or generating post-session evaluation. By incorporating biometric feedback from past, present, and future sessions, you are actively developing evidence for members’ success narratives–stories they can share with the online fitness community via Cyborg’s social media network. 

2. Be Authentic

Digital distance can sometimes cause community managers to overthink their message or create unrelatable content. Sticking true to your philosophy and referring back to attaining lasting, self-driven goals with Cyborg’s biometric tools and social media community will help your authentic voice shine, especially when you let the numbers do the talking. In other words, supporting members who see positive growth within themselves is much easier than with those who don’t have the tools to do so. 

3. Be Consistent

Show up. Provide your community with the tools they need in a consistent timeframe so that your members know when and where to find your content. The more structured and intuitive your online community is, the more likely it thrives. The Cyborg platform has everything you need to run a successful digital business based on the real data produced by your clients and the community connections that promote healthy, sustainable lifestyles. 

4. Know the Voices in Your Industry

Be willing to readjust. Researching leaders in the field of online fitness communities can provide ideas for building a more beneficial digital community for your members, but the Cyborg Team has already done that for you, collaborating with trainers and their members to provide the best features and tools possible for consistent and optimal workout experiences. There’s no need to reinvent the wheel. Use the time saved to continue focusing on your members in a more personal way.

STRENGTHENING YOUR PROGRAMMING

Traditional gyms of past years provided the amenities—weights, the physical space, and the machines—for members to exercise at their own pace. The freedom to come and go as you please is one thing, but the growing demands of the fitness industry have become more specific, starting with the demand for developing specialized programs that fit your studio’s philosophy.

Designing a fitness “plan of action” for a wide spectrum of members is no longer a suggestion, but a requirement. However, implementing elements of functional training into your strategy is not as difficult as it seems. Below are some tips to make the switch in methodology a bit more seamless:

  • Providing the Right Equipment

Specialty tools are great, but not a deal breaker. Functional bodyweight exercises and cardio-intensive movements, like HIIT or cycling sessions, can really turn up the heat and burn calories quickly. Also, coupling Cyborg’s biometric feedback tool with its ability to track in-workout effort levels, provides new variables for understanding how far your clients can push themselves session by session. Balancing the unique assortment of equipment your physical space offers with the attraction of a program built towards functionality can create an immersive fitness experience for all of your content channels. 

  • Redesigning Your Space

Whether your studio is spacious or intimate, providing a comfortable environment will keep your members returning day-in and day-out. The same applies to your digital platform. 

An easy-to-use interface is important, but identifying one that has accurate biometric feedback and a visually appealing design can be difficult. Cyborg aggregates individual exercise metrics into a single number (called PulsePoints/PacePoints) to map and compare trends in your members’ individual workouts. Sharing those achievements using heart rate charts, route maps, even personal photos and captions help blend the best of social media technology with the ability to connect people in a holistic way. 

  • Schedules and Classes

Scheduling a consistent variety of accessible classes without sacrificing time with your digital clientele allows for even the busiest of your members to build their routines around healthy lifestyles. Using Cyborg gives trainers access to their members’ biometrics so that, no matter where or when a client completes a workout, it’s archived and easily accessible for later. 

  • The Studio Aesthetic

Whether appealing to your physical or virtual clientele, a fun and inviting workflow is important for consistent check-ins. With middle-tier fitness chains like Planet Fitness offering less-expensive memberships versus in-home alternatives like Peloton, using technology on the cutting edge of the industry, like Cyborg, will set your fitness program apart from competitors. Your members are no longer looking for the status quo when choosing a fitness guide. They’re searching for a philosophy that ensures a better, healthier version of themselves. With a platform that matches the physical and digital channels you’re looking to build, that idea is more than attainable. It’s the new standard. 

FROM SURVIVING TO THRIVING

Building a plan for financial success can take many different paths, but in restrictive and stressful times in which we are currently living, finding diversified revenue streams may be the difference between simply surviving and rising above the sea of competition currently saturating the fitness industry. 

So here’s the original question posed at the start of this guide: 

Can your business continue to operate at only 50% membership during these post-COVID times and beyond?

 

Cyborg’s ability to open new, diversified revenue streams to keep your business moving forward is essential in maintaining growth in your revenue. Here’s why: 

If a standard 100-person facility loses 50% of its membership fees post-COVID, tough decisions to keep the business afloat lie ahead with its remaining 50 clients. If COVID makes a return, your clientele could be threatened even more. With only in-person services functioning at limited capacity, frustration and financial stress will settle in quickly. 

But by creating new revenue streams for yourself by implementing digital community-building fitness strategies, a new influx of online memberships will narrow the monetary gap left behind by what you previously lost from in-person services. It curves the growth model back into the positive.

If your goal is to return to original membership numbers in three months, a digital platform like Cyborg offers you the arena to quickly add revenue without losing the personality you love about in-person training. 

But that’s not even the best news! Let’s say, in three months, after implementing Cyborg, you have:

  • Restabilized your profit margins. 
  • Expanded your lines of membership in both the physical and digital realms, and
  • You’ve created digital content that can now be used to offer your members authentic holistic fitness. 

If COVID doesn’t return and the “new normal” resets to pre-pandemic life, none of what you’ve accomplished is for nothing. The safety net you worked for simply becomes excess cash

So the question becomes:

What could you do with your business with that kind of generated revenue?

NEXT STEPS

Are you interested in implementing a Hybrid Business Model into your fitness community? Cyborg’s platform adapts to any size facility, ranging from local communities to national chains while checking all the boxes you’ve read in this guide. Historic times call for a reframing of business strategy, which is why Cyborg offers exactly what it does–a holistic approach to the tech solutions for a restabilizing world. 

Finding new and innovative ways to transition from COVID-19 operations as smoothly as possible is key to building and maintaining a strong fitness community both inside the gym and out. The time is now to develop a virtual community as strong as your physical one and Cyborg is the company to make that happen, even if you are operating at partial or fully-digital means. 

Cyborg are the makers of the first social network for fitness. Founded in 2018, they were winners of NHTA’s TechOut competition, focusing on empowering users by building community and providing concise metrics on an easy to use platform. Cyborg shares 50% of revenue with channel partners like boutique fitness facilities, gyms, teams, and clubs and are located in Manchester, New Hampshire. 

Are you ready?

Contact the Cyborg Team directly: 

CONCLUSION

Applying a Hybrid Business Model alongside Cyborg’s social fitness platform means staying connected to your members regardless of time or distance. It shows your level of commitment to your business’s success. It solidifies your confidence in the people who have invested in it. With Cyborg, your members can rest assured that they are part of a thriving community that inspires them to live healthy, manageable lifestyles. 

So if cultivating growth for your members through attainable and lasting goals is your number one concern in the fitness industry, your business strategy is only as good as your ability to provide honest and timely information to your members. Using a Hybrid Fitness Model in today’s challenging market will help you reach more people, offer more solutions, while allowing you to do what you do best–

Maintain a community worth investing in.

THE AUTHORS

Tim Near

Founder & CEO, Cyborg

Tyler Donlon

Author, Cyborg

APPENDIX

Cyborg has already begun implementing its digital social media fitness platform into studios’ established frameworks. Below are customer/user reviews of their experiences using the Cyborg app:

I downloaded Cyborg a couple weeks ago after a Saturday AM workout and started seeing the points show up, the comments from my workout pals made me smile, and then my competitive edge and motivation came back and finally lit that fire I haven’t had for years. It has put me back in the mindset that it’s okay to take time for me. It’s important for me to be my best self for my family.

Jenn Downs

Cyborg is really the only app I’ve come across that actually combines fitness and social networking in a way that makes sense and is fun to use. Being able to compete with your friends to see who can get the most points during a tough workout is a great motivator to give that extra push when it matters most.

Lee Brock

Interested in reading more? Cyborg’s case study featuring Athletic Instinct’s fitness facility in Rochester, New Hampshire can be viewed HERE.

RESOURCES

Brink, Christian. 5 Tips For Becoming an Effective Community Manager, Add This Academy, 5 

July 2016, www.addthis.com/academy/community-manager-tips/.

 

Fitness Discussion Guide, United States Marine Corps University, www.usmcu.edu/. Path: Home 

Page; Portals; LLI; MLD; Toolkits; Fitness Based Discussion Guide.

 

Gyms Reopening: 46.67% of Members Won’t Return [Study], edited by Staff Editor, Athletech 

News, 2009, athletechnews.com/gyms-reopening-46-67-of-members-wont-return-study/.

 

Rizzo, Nicholas. Gyms Reopening: 46.67% of Members Won’t Return [Study], RunRepeat, 4 

June 2020, runrepeat.com/gyms-reopening-coronavirus.

 

Ronto, Paul. Exercise is Up 88% During COVID-19 [12,913 Person Study], RunRepeat, 4 June 

2020, runrepeat.com/exercise-covid-19-study.

 

Teece, David J. “Business Models, Business Strategy and Innovation.” Long Range Planning: 

International Journal of Strategic Management, vol. 43, 2009, pp. 172-94, 

doi:10.1016/j.lrp.2009.07.003.

 

Tharrett, Stephen. 5 Steps to Effective Pricing in Your Fitness Business, Zen Planner, 17 Sept. 

2019, zenplanner.com/fitness-studio-pricing-structure/.

 

The International Health, Racquet, and Sportsclub Association, 2020, www.ihrsa.org/.

 

Valinsky, Jordan. 24 Hour Fitness files for bankruptcy and closes 100 gyms, CNN Business, 

2020, www.cnn.com/2020/06/15/investing/24-hour-fitness-bankruptcy/index.html.

 

Vennare, Anthony. The Numbers Behind The Boutique Fitness Boom, Fitt Insider, 

insider.fitt.co/boutique-fitness-boom-numbers-statistics/.

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