As a strategic web consultant to the health club industry, I work with executives to develop digital assets that increase club profits, reduce expenses and save time. Many engagements include assessing a client’s competition and the potential online influence that competition exerts or could exert in the market. It used to be a health club’s competition was external to the club - now competition must be dealt with from within the club as well.

Nike Wants Your Members
I often reference Nike as an example of growing profit by building digital assets and applying web 2.0 dynamics. I site the Nike+ iPod combination as the ideal representation of creating customer value by:

Bundling fitness activities (running) with website functionality (online tracking of workouts, calories burned, and running time, at nikeplus.com) with web 2.0 features (online social collaboration - challenging another person online, joining a running group, downloading running songs voted popular by the online community).

Of course Nike profits every step of the way (excuse pun), by selling high profit margin shoes that offer extra online value. And once a customer goes online and registers to use their Nike + services, they immediately enable a direct marketing channel to Nike. Powerful model.

The Trojan Horse Has Entered Your Club
Take a look around your fitness floor and count how many iPods you see. Now look at your treadmills. Imagine how Nike is making money from the workouts your treadmills are providing your members. Treadmills that you purchased and pay to maintain. How? By directly connecting with your members online and using the data produced from your treadmill (calories, time, etc.) as the enabler.

The Treadmill is Your Expense. Your Member is Their Profit?
Now imagine Nike uses the direct online connection they established with your member to market a Nike treadmill for home use. Bye, bye health club membership? Or maybe your member doesn’t leave. They just become less profitable to you. Why? The supplements and workout apparel they used to buy from you they now get from Nike (an online offer they couldn’t refuse). Or perhaps the massages members used to get in your club are now received somewhere else (because Nike serves ads for local massage therapists on your member’s Nike Plus web pages).

More Trojan Horses Getting Ready To Stampede?
Nike and Apple just announced the Nike + iPod Experience Coming To A Gym Near You. From NikeBiz.com:

[Nike and Apple are] working with major gym equipment manufacturers such as Life Fitness, Precor, Star Trac and Technogym to make their cardio equipment Nike + iPod compatible so health club members can easily track workouts on cardio equipment like treadmills, ellipticals, stationary bikes and stair climbers.

Nike + iPod users will simply plug in their iPod nano into the equipment at the start of their workout to automatically record their progress. Users can then connect their iPod with their computer to upload the workout to www.nikeplus.com

Will this Strengthen or Weaken The Health Clubs Who Participate?
My answer starts with “both” and ends with “weaken”. Sure 24 Hour Fitness will get some PR benefit and spice up their membership tours a bit - but did they think through the Nike Trojan horse stampede they just let loose in their clubs?

After all, I don’t see any mention of 24hourfitness.com in the press release excerpt below. Seems all roads lead out of the participating health clubs and into Nike and Apple.

The Nike + iPod experience revolutionized running. Now we’re revolutionizing the gym cardio experience,” said Trevor Edwards, Nike’s Vice President of Global Brand and Category Management. “We’re enabling people who go to the gym an opportunity to set goals, track progress, and compete in challenges with their friends and with other members of www.nikeplus.com. It’s a groundbreaking tool for people who want to maximize their workouts.”

At participating gyms, including 24 Hour Fitness nationwide and Virgin Active Health Clubs internationally, members will soon be able to use Nike + iPod to track their workout and log their data on www.nikeplus.com.

• Nike + iPod will allow gym members to track progress, set goals and make challenges on www.nikeplus.com.
• By using the www.nikeplus.com coaching tools, personal trainers now have the ability to help clients chart their progress.
• When gym users connect their iPod nano to their computer, their workout data is sent to www.nikeplus.com through iTunes. This workout data is converted to “CardioMiles” so that users of cardio equipment can easily set goals and participate in challenges with runners and with users of other cardio equipment.
• To date, Nike + iPod runners have logged close to 50 million miles on www.nikeplus.com, making it the world’s largest running club.

What’s Next?
One thing is for sure. Health clubs need to start looking at the competition from new angles. New strategies are needed to capitalize on these opportunities and threats. As for Nike, stay tuned - they are going to shake up the world of fitness in some radical ways. And in doing so will provide lessons for us all.

What about you? Do you see Nike as a competitive threat or benefit to health club profits?

Tags:apple, fitness marketing, gym, health club online marketing, memberships, nike