Planet Fitness: A Model for Credit Unions?
Many credit unions tend to operate by myths from within the industry. Likewise, many credit union business and marketing plans are written and executed surrounding those same myths. I’m not pointing fingers, nor am I excluding myself from that broad statement. Too often we seal ourselves in the credit union box by attending educational sessions and conferences, with lectures and presentations from others within the industry. While knowledgeable about credit unions, you’re missing the boat by not looking to other industries for ideas.
Credit unions could learn a lot from the fitness business. More specifically the Connecticut based franchise Planet Fitness. It’s a gym successfully branded as the “anti-gym.” The one obstacle to many people joining a gym is embarrassment. If you’re as out of shape as I am, the last thing you want to do is roll yourself into a sweaty room full of muscle bound body builders. CEO Michael Grondahl co-founded Planet Fitness in 1992, branding it as the “anti-fitness” gym with inexpensive memberships.
Here are three lessons credit unions could learn from Planet Fitness:
- Don’t listen to “them”: We tend to follow the same marketing schedule for two reasons. Because “that’s the way we’ve always done it” and if our competitors are doing it, so should we. When do you see most gyms marketing? New Years right? They are under the assumption that most people have made a New Year’s resolution and will start working toward their new goals right away. Not Planet Fitness. According to an article in Inc. Magazine, the best month for Planet Fitness is March. It turns out most people procrastinate and don’t start their resolutions until then. In fact, according to that same article, sales in March are 10% higher than in January, which is their second best month of the year. Maybe it’s time to look at the numbers at your credit union, not the research that our decisions have been based on for the last decade or two. Recently, as part of a membership loyalty program we looked at the average payoff for auto loans. The credit union had been operating under the assumption that it was over 36 months. It turns out; members were paying off their loans in about 24 months. This altered their member loyalty program immensely, and resulted in being the first choice for those members when trading in a vehicle for a new one. This credit union had the best chance at getting the loan because they were there before the decision or just when the decision came to purchase a new car.
- It’s not for everybody: Too often credit unions see their potential members as “anyone who lives, works, worships, or attends school in (name the city or county.)” That’s a pretty broad target audience. So if that’s your answer, you’re willing to make a loan to anyone with a 550 credit score? Or you’re willing to match the .79% rate that an A+ borrower was offered at another financial institution? Planet Fitness knows their target audience, and serves them well. Planet Fitness gyms are equipped mostly with cardio equipment, and very few weight stations. Grondahl describes Planet Fitness as at the very low end of the gym spectrum. At $10 a month, you get the basics you need to start getting in shape. Nothing fancy, but you get to work out in a non-judgmental atmosphere for a small amount of money. It’s time for your credit union to recognize what you’re good at (or what you want to be good at) and begin implementing a plan to serve that segment of your membership well.
- Branding IS important: What is your credit union’s brand? Do you even have a brand? Brand is so important to Planet Fitness that even the door handles at each gym are shaped like their logo. “If they’ve thought of that, they’re going to take care of me when I need something” said Grondahl about the branded door handles in an interview with Inc. Magazine. Grondahl makes a good point. To a marketer, it’s branding. To a consumer, it’s about the details.
So with these differences between a regular gym and Planet Fitness, are they successful? Very much so. The gym had $519.7million in revenue in 2011, putting it at number 1,752 on the Inc. 5000 list last year. So, do you want to follow the ways of those in the industry that are stagnant, or follow leaders of other industries and pioneer your own success in the credit union industry? Or, turn that question around. Do you want to continue offering your members what everyone else offers, or do you want to choose a segment that you can serve better than anyone else and blaze a trail of success for your credit union AND your members?