Feb 1, 2008 12:00 PM
Interview with Jim Mizes, CEO of Club One
Mizes talks about branding, Kranking, corporate fitness and expansion for this California company on the move.
Q: Tell me a little bit about your experience in the industry and how you came to Club One.
A: Very good. Well, I think what’s important is that I’m not from the industry. I have over 20-plus years in retail, primarily in the world of food service. [I have] many years at Taco Bell, and then I built a company called Noah’s Bagels that was sold in the mid-1990s and spent five years at Jamba Juice building those organizations, each of those growing 50 to 100 sites plus a year. I moved over to Club One in 2002 because I saw a couple things. No. 1, I’ve always been an exerciser and loved it, and I thought if this is an area in which I like to play, maybe it would be fun to work in it as well. Secondarily, I think this business is much like the retail business I’ve come from. It’s about people and programs and service. And what I learned primarily from Noah’s and Jamba, which both have higher purposes, is that when you can rally people around a higher purpose, the results and the productivity and the alignment are so much greater. I vowed back in the early 1990s after understanding how when people have a higher purpose how much harder they work—sometimes in a volunteer organization for nothing, but they work harder than in their paying job—that I would only work going forward in an organization that had that. I think Club One brings that to the Bay Area and to our management accounts that we serve and our community centers.
Q: You’ve been with Club One for six years. What have you brought to the company, which was founded by Jill and John Kinney?
A: Jill and John Kinney did start Club One in 1991, and as the entrepreneurial owners, they set the foundation for what I’ve been able to accomplish over the past five years. From 1991 through the early 2000s, they were acquiring clubs and trying to build the Club One and the Frog’s brand. When I came on board, we began to separate the two brands and strengthen our vision and purpose, bring the right players on the bus, so to speak, in terms of leadership at the club level. Bill McBride, who is an industry veteran, [offers] financial leadership [as] our CFO and then in each of our department heads strengthening the team that way.
We also concluded that the Frog’s brand and the Club One brand were not the same. Thus, rather than trying to align them, we separated them. Frog’s was a little more hip and edgier than Club One, which has much more of a sophisticated approach. We’ve taken them in their own directions. We’ve stabilized and brought consistency of all the back office systems throughout all the clubs. We’ve put a greater emphasis going forward on our management contracts. And we chose that we could bring strength from being in the middle. We’ll do that by differentiating ourselves through people, programs and results for members as the beginning of our points of differentiation.
Q: Most of your Club One clubs are in Northern California and the Frog’s clubs are in Southern California. Do you plan to keep the clubs separated geographically or will there be an overlap since they are different brands?
A: You are correct in that our Frog’s brand is in San Diego, and we have one Frog’s in Long Beach (CA), and all of our Club Ones are in Northern California. They are separate brands, and all the behind-the-scenes systems are the same. Part of our philosophy is each individual unit should reflect the community it serves. Even within Frog’s, what happens at Solana Beach (CA), which is obviously along the beach, is very different than our inland club in San Diego, and clearly Club One in downtown San Francisco is very different than a club in the suburbs of San Jose (CA). While all the behind-the-scenes systems are the same, everything that is reflected to the consumer is very different because of the communities we serve.
Q: Sounds like you really know the market you are serving, and your clubs are reflecting that. Do you find that enough clubs are doing that? That they are aware enough of their demographics and have tailored their clubs to those demographics, particularly now with greater competition?
A: Well, I think that’s going to be the key for a club company our size or even an entrepreneur within a community is to leverage and understand what’s going on in their community and that a big box—and some of the other boxes that are out there—can certainly find the real estate and build the building, but the ability to connect to the community and help the members achieve the results they are looking for, I think sometimes falls short in some of the larger boxes. We are a mid-sized company, I would say. We are certainly not as big as some of the large ones, and we are certainly not a one- or two-club company, but I think the strength lies in being able to position yourself to serve that community. Some of the very best and most successful clubs—if you look across the country—are entrepreneurs who are really engrained and connected to the community they serve.
Q: What sort of new programming do you have planned or have implemented already this year at Club One and Frog’s?
A: The first piece that I’d like everyone to understand is that our goal is to separate from the industry much like Hawaii is separate from the mainland. It’s all part of the United States, and so we want to be part of the industry, but we want to create this blue ocean of separation in the book, and that’s where we are going. And we are going to do that through innovation and integrity—integrity meaning results for our members and innovation [meaning] programs that add value. So let me go through a whole litany of programs that we have started to bring to our members. Some of them will take time to develop and change lives, but we are convinced they will do so.
We are, as I think everyone will learn more about at IHRSA [the International Health, Racquet and Sportsclub Association conference], the very first and only club in the world right now to bring Kranking, which is upper-body cycling, into our clubs both on the strength floor and on the cardio floor and in our group fitness classes. We have partnered with Johnny G, who created Spinning, as everyone knows, to be his test. He will be bringing this to IHRSA later this year. Johnny chose to work with us because he believes we are an innovation leader.
We have brought MYE downloads into the clubs, in a half dozen or so of those clubs. [We are] testing the ability for members to purchase the MP3 and then download for a very small charge unlimited exercise programs that they can use when they are on any piece of cardio equipment at home, in the club or when they travel. And it’s an alternative to “I want to be distracted with TV or music and actually have a coach in my head, and basically I have a group exercise class going whenever I’d like it.” And that’s off to a good start. A challenge that’s always there is trial for our members.
As part of our trying to create blue oceans of separation for our members and provide value for our members, we have launched a series of programs that we are calling Well Power, and we will continue to build on those. The vision behind that is we will add value to our members while they are at the club, and just as importantly, try and influence their lives outside the club through programs that can make a difference. We have three right now and more are in development. The first one is our Activity Tracker, which merely allows our members to go into a portal after they sign up—and it’s only for members—to see their usage of the club and compare their usage to other members across the Club One and Frog’s Fitness family. So they can see that, they can see their usage, they can see their momentum for the month, etc., and we are building more and more stats on that.
Q: Is that available to any member or just personal training clients?
A: No. All 50,000-plus members have access to the system. As long as they provide us the e-mail address—which is a our way to validate that they are a member of Club One—then they have access to all these programs and more that are coming. So the first one is a very basic tracker that gives them information about their usage and how they compare to others who are members of Club One or Frog’s.
The second [program] is called Couplers. This one is magical. This one has already changed the lives of our employees—by the way, we rolled these programs to our employees as well as our members. Couplers marries an individual and their family background (because all that impacts their health and wellness) to any kind of condition they have. There are management couplers, and there are diagnostic couplers that basically can help our employees and help our members improve their health and improve their ability when they interact with their physicians, since you generally have seven to 10 minutes with your doctor. For instance, what are the questions parents should be asking their physician when they take their child in for their well-child visits from the age of six weeks to 18 years? I know I have grown kids, and I don’t think we did as good a job as we could do now with this tool. I now have elderly parents, and my father is struggling with movement. There are things you can do to the house to make it safer for him. How do you learn about that? We had a member who was fighting anemia, and she couldn’t figure out why. She took our Coupler on anemia and solved her problem and saved thousands of dollars going forward because she’s already spent thousands of dollars trying to resolve that.
So, we are bringing that free to our members. There are over 120 couplers that again marry a condition that they or any member of their family may be facing—because everyone in their family can use this program. And so this will be a huge value addition for our members and for our employees, helping them to live healthier lives, helping them to make better health care decisions. In the haze of health care or the muck of medical care, it’s really going to be a huge improvement for them.
Q: Do you partner with doctors on that or coordinate with them on this once they find out what their condition is?
A: Here’s the beautiful piece about this tool: Doctors love it once they understand what it is because obviously the questions are tailored to how you answered the previous question. Basically, doctors are human, and computers and medical decision-making is part logic and a little bit of art, correct? And so what happens is this program is tied into all the medical journals and guides that doctors use to study to pass their exam, and it quotes it. So if I’m looking at, I have pain in my knee and I’m doing the knee pain Coupler, it will highlight the page and the paragraph and the reference book that doctors use that narrows down to what likely could be the cause of my concern. And then, of course, that leaves the doctor to making choices about whether or not further X-rays need to be taken, etc. It’s HIPAA compliant. The organization—meaning we also sell it to corporations—never sees it. In the case of members, it resides on their desktop, on their computer at home. They can print it out and bring it to their office visit or show the doctor where the logic flowed to “this is the most likely outcome.” And it provides risk factors. So it’ll say something like, “Given the questions you’ve answered, you have three out of nine indications that it’s a meniscus tear, in the case of a knee,” or “You have zero out of 11” or “You have seven out of nine,” which begins to then narrow the focus for the doctor, which you can imagine then begins to reduce your health care costs in some of the tests that have to take place.
It’s a brilliant, beautiful program, and we’re so thrilled to offer it to our members—free. It’s a part of their membership and another advantage to being a part of Club One.
