The health and wellness industry is trend-rich, which tempts many business owners to hop onto the “next big thing.” But what if that’s a mistake? Five ways to tell if if sticking to your knitting is the best business strategy:
1. When the customer landscape isn’t really changing
Let’s say your business is a bike training studio.
Cycling can be equipment-intense, and cyclists are always looking over their shoulder at who has the latest power meter, heads-up display or workout tracking software.
As a business owner catering to such customers, it’s easy to get caught up in a trend, or worse, spend hard-earned money on a piece of equipment that turns out to be nothing more than a fad.
In the end, performance on the bike is still performance, VO2 max is still VO2 max, and watts are still watts. Customers still have to train the same muscles to attack those hills, and you’re still the expert in how to get the most out of a particular athlete.
If you’re managing to make back your storefront rent, and you’re still doing the best job of helping your members improve their performance, being ahead-of-the-Joneses isn’t nearly as important as being an expert.
Don’t throw everything your business has earned at this year’s favorite gadget.
2. When the numbers still work
If the number of leads, signups, revenue per sign-up, and customer retention rate for your wellness business are looking good, it’s OK to set aside a little “mad money” to test on new ideas, market research, equipment, workout programs, or coaches. Your business has to grow, after all, and you don’t always know where that growth will come from.
But follow the “Vegas rule.” Never bet money you can’t afford to let go of. Or as some people put it, bet out of your left pocket and put your winnings in your right.
Don’t get so caught up in building improvements, new locations, or program expansions that one bad month will put you out on the street or have you borrowing more than you can earn back from those as-yet-unproven initiatives.
Most wellness business owners would be surprised how many of their peers who appear to be successful are in fact living on the hope of a better tomorrow.
If your wellness business is paying the bills, you are already successful. The worst thing you can do is go out and buy a bunch of unneeded toys, try to conquer the international market, spin off a new brand — unless you’ve won the lottery.
Should you capitalize on new opportunities? Maybe. But first, run the numbers.
3. When your business’s reasons for existing haven’t changed
Chances are pretty good that when you set up “Grillin’ Chillin’ Low Carb Comfort Food” (believe it or not, that business doesn’t exist… yet!), you saw a need for low-carb versions of your favorite Southern-style recipes, a flourishing market for ready-made meals, and you felt a calling as a nutritionist from the Mississippi Delta to show your customer-rich market a way out of the Pit of Dietary Despair.
If that’s still true and you’re making a living at it, keep on truckin’.
Now, eventually, some other wellness entrepreneur may wander into the same market looking for a place to put down stakes.
Just remember, before they were there, you had created and successfully exploited a niche, and tomorrow that will still be true.
Even if that competitor attacks you head-on, dig in and reinforce your business’s value to your customers. Don’t radically transform your business out of fear, just to get out of the way of an imagined juggernaut. They could be bluffing — and they may not be here tomorrow.
Meanwhile, you wasted time and money worrying about them that you could’ve spent developing new products, building new networking relationships, and extending your marketing reach.
4. When the “trend” doesn’t change the basic game
Back to our cycling studio for a minute.
So let’s say you’ve decided to expand beyond your core training programs and offer some gear purchasing options.
Selling gear is an opportunity for additional revenue. But now you’re carrying inventory, it’s taking up space in your studio, and the longer it stays on the shelf the likelier it is you’ll have to mark it down or write it off. And chances are also pretty good they can get the goods more cheaply on Amazon.
If you’ve got the stomach for that, go ahead; but keep in mind that your business is still a cycling studio, right?
Make sure your strategies make sense in that overall context.
If your clients are super-competitive Ironman triathletes or travel every weekend to ride in crits, do you really think they want the mass-market brand cycling shorts they see everywhere?
Does offer the same line-up of Garmin or Suunto watches that Dick’s Sporting Goods and Amazon have really seem like a great idea?
Ask yourself: what specialty, niche equipment or tech can you offer that helps them make measurable progress towards their performance goals? What can you show them that they probably aren’t seeing everywhere else? For example, a surprising number of cyclists quietly hate clipless pedals but don’t realize that high-end flat pedals even exist. They may not have heard of DeSoto-brand tri gear.
5. When your customers are solidly loyal
This risk is especially present for long-established fitness and wellness businesses. They take for granted that loyalty will last forever, that somehow it’s attached to the brand’s ineffable greatness and not the day-to-day delivery of unique value to the customer.
Here, it’s not “bright shiny object” syndrome as much as letting your eyes wander off course. No big transformative event, just death by a thousand small nicks — and gradually those loyal customers just trickle away. It often starts when a business owner makes an investment in a new location or new spin on their existing business. It’s more fun to spend time at the new location, and of course they want to put the latest cool stuff there to make sure it gets off to a good start — and before long, the original location becomes an afterthought.
I used to shop for ultra gear at a DFW running store. They had a guy who did multiple 100-milers each year and knew ultrarunning and ultra gear backwards and forwards — very unusual in running stores. They had a lot of specialty gear that wasn’t available anywhere else, and unlike Amazon, you could try it on, feel whether it chafed or held a water bottle well. And you could walk right out the door with your gear that day, no waiting.
Then they started selling some really ordinary mass-market runner’s gels, electrolyte powders, and run-of-the-mill shoes. Their staff turned into inexperienced collegiate runners who only knew track and field events and had no clue about ultrarunning and stuff like hydration vests.
A few months later, having turned themselves into a micro-version of Dick’s or Academy, they were gone.
When it’s time to change
There ARE signs that your wellness business may need to change something about how it conducts business.
- Gradual and persistent down-trends in the number of leads, customers, or revenue per customer
- Changing demographics in your geography or market
- Difficulty managing cyclic financial issues
- Disproportionately increasing cost of operations, such as labor, facilities upkeep, storefront rent, etc.
- No progress on sustainable profits, and you’re burning through your cash reserves
The good news is that when you stick to your knitting, you’ll spot these changes early and you’ll have to time to evolve.
So: the next time you see a headline about massive growth in this year’s favorite fitness franchise flavor (Orange Theory, lookin’ at you)….or a headline that makes it sound like failure to accept ApplePay or Bitcoin will doom you…or that the only path to yoga studio success is to join YogaPass…or that the key to member retention is replacing all your perfectly-good existing cardio equipment, just remember:
Your customers will tell you if you’re not meeting their needs. It won’t hurt you to not be first in line to get something they didn’t ask for.
Latest posts by Don Muchow - Radial (see all)
- When Sticking To Your Knitting Is the Best Wellness Business Strategy - April 6, 2018
- Business Karma: How Pro Bono Wellness Helps Profits - April 6, 2018
- Part 1: AdWords Pay-Per-Click Advertising Traps for Health & Wellness Businesses - March 28, 2018