If you’ve consumed any business related content in the 2020s, then you’re probably sick of the word ‘pivot’.
It basically refers to changing the direction of your business without completing scrapping where you are currently.
And that’s what I’d like to introduce to you today, some of my ideas for how you can pivot your fitness business to chase more or different clients, services, income streams, profit margins, and ultimately ways that your business can make your life better.
To really understand what I mean by ‘pivot’, let’s look at basketball. A pivot in basketball is when you plant one foot which you then ‘pivot’ on as you move the other foot to change your angles – ultimately, increasing the options for what you do with the ball. You’re not moving, just changing direction.
Pivoting in business is the same. You’re not moving out of the fitness industry, just changing directions.
And as much as this concept has really taken off since the pandemic, the very first use of the word ‘pivot’ in a business sense came about in 2004 in a book called ‘The Lean Startup’ by Eric Ries. It’s a book I recently listened to, and there were some messages that jumped out that I’d like to share with you.
In this book, Ries suggests entrepreneurs quickly test their ideas with a simple version of their product, called a Minimum Viable Product (MVP). This MVP concept plays a huge role in how I personally test and launch new business ideas. You can check out episode 39 of The Business of Fitness Podcast where I do a deep dive into this concept and how I used it to build a fitness business in 3 hours for $300. The book outlines that by using a cycle of building, measuring, and learning, businesses can see what works and make changes quickly, increasing business success.
Eric Ries defines a pivot as “…a structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.”
Which all sounds very fancy, but it basically means, ‘try a bunch of different stuff to see what works, then do more of that.’
So let’s talk about some ideas to pivot your fitness business to help you achieve more purpose, profit, and lifestyle.
In the book ‘The Lean Startup’, Eric Ries outlines nine different types of pivot, so I thought I’d explore each one, giving an example of how a fitness business owner like a gym owner or a PT could use it.
If you’re looking to freshen up your business or try something different, these are the different pivots to consider.
Zoom-In Pivot:
Our first type of pivot is called a ‘Zoom-In Pivot’. This is where we look at the services we’re already providing and work out which of them are most successful. A great way to do this is to run an 80/20 analysis – what is the 20% of your business that’s bringing in 80% of the income. What’s the 20% of your business that’s taking up 80% of your time or causing you 80% of the stress? The Zoom -In Pivot involves focussing on the best 20% and doing more of that.
Maybe you’re a PT who has some clients who only train once a week. You know that limits the impact you can have on them, and they take up a lot of your time without the financial return. What about Zooming in to only offer three a week options. You’ll only need a third of the clients, their results will be better and your retention will be higher.
Let’s say you’re a gym owner with a large facility with 200 members, and you offer gym memberships (which make up 80% of your members) and semi-private training (which makes up 20% of your members). But because people pay a lot more for semi private training, these 20% of your members actually earn you much more money. You also notice that all the pin loaded equipment and cardio machines needed for a gym membership model take up 80% of the space. So really, you could move to new premises a fifth of the size, drastically cut down on overheads and business stress and complexity, maintain 80% of your revenue, and multiply your profit margins.
Zoom-Out Pivot:
The opposite of the Zoom-In Pivot, is the Zoom-Out Pivot. This is where you expand the things you’re offering to additional features, benefits and services. It’s a great way to increase average revenue per member for gym owners.
The way I approach this with the business owners I mentor is to look at all the health related goods or services that customers spend money on. Allied Health Professionals, food, supplements, apps, programming… the list goes on. If people are going to be spending this money anyway, they may as well be spending it with you. So how can you zoom out offer these things to your existing customers?
Customer Segment Pivot:
Our next pivot is the Customer Segment Pivot. This is where a product or service is found to be more valuable to a different group of people than it was originally intended for.
Look at what you’re providing and ask yourself what type of person it’s best suited for.
Maybe you’re an Exercise Physiologist who’s created an amazing program for top level youth athletes to improve power. But you know the problem with that? Athletes of the highest level have this provided by their club, and athletes the next tier down are either time poor or can’t afford it.
So ask yourself, who else would benefit from a program that makes them more powerful? Aging adults. The preferential atrophy of fast twitch muscle fibres means that as we age, we actually lose speed and power faster than we lose strength.
This new customer segment probably has more time and money than the athletes you were originally targeting.
Is there an untapped group of people who would benefit from the service you already provide? That’s a Customer Segment Pivot.
Customer Need Pivot:
If you don’t want to change the customer you’re targeting, you need to consider a Customer Need Pivot. This is where you stay with the same type of client, but realise that they actually have a much bigger problem than the one you’re trying to solve – a different need to be met.
Let’s say you run a boutique gym that runs high intensity small group training for people in their 20s. You have a couple of sets of a small strength element at the start, then a 30 minute sweat-fest guaranteed to leave people in a puddle of sweat. You listen to your members, and realise that everyone loves living heavy stuff, but dreads the burpees and air bike intervals. They tell you they just want to be strong, so you pivot your business model and programming to small group strength training.
Do the people you’re servicing have a bigger problem than the one you’re currently solving? A Customer Need Pivot might be worth considering.
Business Architecture Pivot:
In some cases, a more drastic pivot might be needed, and a business architecture pivot is an example of changing the entire model of how the business operates and generates revenue.
Usually, this involves one of two changes. Bear with me, while I give you their fancy names, then I’ll explain a little more clearly.
In a business architecture pivot, you either go from a high-cost, low-volume business model, to a low-cost, high-volume business model, or vice versa.
So what does that actually mean?
To understand this, let’s look at two extremes of business models in the Fitness Industry, gym memberships, and Personal Training. In episode 37 of The Business of Fitness Podcast, I looked at these two models and three others to see which came out on top financially. Check that out if you’re interested in this.
So, memberships and PT.
Gym memberships are low-cost, high-volume. A lot of people pay a very small amount. Personal Training is high-cost, low-volume. A small number of people pay a very large amount.
Let’s say you’re a boutique gym that targets busy professionals. And you want 150 members. This is an example of a low-cost, high-volume business model. You’re what’s called a B2C model – business to consumer – you sell to individuals. What if you could switch to a B2B model – business to business – where you sell to other businesses. Instead of low-cost, high-volume, you get contracts with large businesses as their official fitness provider. They cover the cost of their employees to train with you as part of their corporate health program. Now, instead of needing 150 individual members, you just need five businesses, each covering the cost for 30 of their employees.
Value Capture Pivot:
Let’s talk about a value capture pivot. This is basically where you change how you earn money.
There are a few different ways fitness businesses earn money. Things like direct debits for memberships, paying per session for PTs, semi-private training purchased a block at a time – the list goes on.
My strong preference for the businesses I run is to make everything a subscription based model.
Look at most of your recurring expenditures. Netflix, Spotify, Amazon Prime. They’re all subscription based. It doesn’t matter if you’re binging 30 hours a week, or going on a complete digital detox, you still pay the same for Netflix.
How can you change your payment model to subscription based? And of course, the most basic value capture pivot is just to increase prices, which I devoted an entire episode to in episode 46.
Engine of Growth Pivot:
Our next pivot is called the engine of growth pivot. It tells us that there are basically three ways that customer numbers can grow. Eric Ries, the author of The Lean Startup, calls these The Sticky Engine of Growth, The Viral Engine of Growth and The Paid Engine of Growth. Let’s explore each of these for a fitness business.
The Sticky Engine of Growth is where you focus on retention. Keeping your clients and members around for the ongoing term, increasing their lifetime value to your business.
The Viral Engine of Growth is all about referrals – encouraging your current clients and members to bring in new people to grow your numbers.
And The Paid Engine of Growth involves using paid advertising to bring fresh blood into your business.
Of course, these all have their place, but I see too many businesses reliant on only one engine of growth. There are those who rely purely on word of mouth to create a viral engine of growth, which is great until the referrals dry up. Then there are those who put all their focus on bringing new people in, not realising that they’re still losing members each month because so many people are leaving.
My recommendation is to take a look at your business, and work out which engine of growth you’re neglecting. Is your retention rate too low? Build a better member experience. Are people not referring their friends? Start by building a service they want to shout about from the rooftops, then build a referral system. Do you have low numbers of enquiries from people outside your existing member network? Considering some paid advertising.
Channel Pivot:
Next, we move to a channel pivot, which changes the medium through which a service is delivered to your customers.
This is the biggest pivot we saw during the pandemic, where everyone was forced online.
Unfortunately, I think the pendulum swung too far, and now everyone’s trying to compete with each other in a crowded market. But the idea was right, and the challenge is in you finding a new way to deliver your service that’s driven by you, not demanded by a global pandemic.
Technology Pivot:
Our final pivot is the technology pivot, where we use technology to make it easier to solve our clients’ problems.
This makes me think of a mental model called ‘Maslow’s Hammer’. Which basically says that if the only tool you have is a hammer, every job looks like a nail.
Let’s say you’ve got a chronic shoulder injury. Generally, a surgeon will recommend surgery, a Physio will give you some exercises, a Massage Therapist will stick their thumb into your muscles, and a Pharmacist will recommend drugs.
To undertake a successful technology pivot, you need to make sure you fall in love with ACTUALLY solving people’s problems, not HOW you solve their problems. If you can treat each person and each problem on its merits, and find the best unique solution for that problem, you’re undertaking an effective technology pivot.
So those are the nine pivots that I think are most valuable for a fitness business.
I see so many people with plateaued businesses, bored of their way of doing things. It’s probably time for a change, and one of these pivots might just be the spark you and your business need.
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