LIFTS Episode 140 – Your Members Know More Than You Think | Life Fitness

0:00You know people aren't buying workouts. When we were younger we'd get a membership we were buying workouts. They're buying a lifestyle into the future. You know wellness you know they want to live longer right. So what does that mean? It means to me that fitness has to be everywhere. Fitness and wellness has to be everywhere you go whether it's the apartment, the hotel, the gym you go to and then what Andrew was saying the value prop of what the gym offers. I mean from when I started to some of the stuff you're seeing now with some of the HVLP operators and what they offer for the price. is just incredible, right?

0:31And that's just gonna continue to progress. But I think the one most important thing is nobody wants to have an individual experience at their apartment, an individual experience at the hotel that they go to and at the club they go to. If there's a way for them to tie all that together, to tell them what to do and how to do it, then that ends up winning and I think that's where we're headed in the future.

0:59Matthew Januszek:welcome to this week's episode of lifts live we're here in chicago at the offices of life fitness and hammer strength and i'm joined as always by my co-host mohabit iqbal and today we're going to explore where the fitness industry is right now and more importantly where it might be heading we've got some great guests joining us for the conversation today and mo before we get into it why don't you introduce who we've got around the table and maybe set the scene of today's conversation. Look, I'm incredibly excited to be here at Life Fitness HQ. I'm joined by Andrew Mahadavan and Dan Willey. I love being here.

1:32I mean, Life Fitness, to me, I've been in the industry for about 15 years, and this has been one of the iconic brands. Now, they are a collection of iconic brands. Just kind of walking through the hallways here, seeing the original lifecycle. I don't know if you saw that or not. The original lifecycle, the treadmill as well. I I mean, this is going back 40 plus years. And then we walked over before the podcast to all this new equipment. You've got three screens. Potentially, you have a treadmill where you have two screens. Then you can put your phone in there. It's just incredible to see a company transform so much over the last many, many years.

2:08So we're excited to be here. What we're going to be talking about today is really understanding, one, how a company like Life Fitness has evolved over many, many decades. how that's shifted the company and how to continue that pace of innovation for the future as well.

2:24Matthew Januszek:Well, to kick off, I think we're all aware, and I'm sure many of the listeners, that the fitness experience has changed. And to give a bit of an intro into my question is, you know, the consumer has become hugely more knowledgeable, a lot more sophisticated, I guess, than what they were probably, I guess, pre-pandemic. I think that seems to be a bit of a tipping point a lot of people reference. I think since the pandemic, there's been an explosion of fitness content and social media. The training knowledge that once belonged to bodybuilders, athletes, coaches has now become mainstream with the likes of podcasters that are now sort of publishing almost like research as it gets produced.

3:03Matthew Januszek:They're following athletes, creators. And even on the equipment side, we've got these sort of garden shed wannabe equipment designers that are influencing equipment trends in a lot of cases. You know, some of the products that we're seeing people have, you know, I saw some of these guys on Instagram knocking up and, you know, people seem to have accepted them and they're saying, OK, can we have this in our gym? So, you know, a lot of changes and a generation that might once have used almost like cars and watches as a status symbol seems to now be using something that's a lot more harder to acquire, which is, you know, a vein on the biceps is becoming a statement more important than a Ferrari, as I've heard someone say it.

3:41Matthew Januszek:And also, you know, your specced out home gym is the equivalent to your new brand new design kitchen. So whether those statements are literally true or not, it does capture that there's this cultural shift going on in our industry. And I guess the question to sort of kick us off with you guys is that, you know, a few years ago, an operator could buy almost like any machine on the gym floor and they could get away with it. Today's consumer may know the exact machine, the movement path, the angle, the exact part of the quad that it's hitting. and in your position, what does the level of consumer knowledge do to the equipment manufacturing business?

4:18Matthew Januszek:I'll probably put this to you, Dan, first and I'll get your comments, Andrew. Sure. Well, that's a very good setup. Thank you. At Life Fitness with us, it always, always starts with the end consumer and understanding what they're looking for, what they're trying to achieve. We also think about the operator and we also think about the servicer, right? Because if you make a piece of product that can't be serviced, then it's going to be difficult. So I say this because if you truly understand the latent needs of the end user and that end user stays longer as a member and is at that facility, everybody is successful in the long run.

4:55Now, you're absolutely right, Matthew, when you say the amount of information that's coming through on social channels, on the types of movements. Even now, you see this huge trend towards older pieces of equipment that are not around anymore. This past year, we brought out the Legasaurus, which we had retired many, many years ago. And we see that also as another trend because people see those movements and see the value of those movements and want multiple types of movements. So all of that really pours into a research engine here at Life Fitness. And we make sure we understand that. We understand going out to the marketplace and talking with operators.

5:36We talk to our distributors. And this week, you guys are here. We're talking to some of our key accounts and understanding all of those. And we put that into what we call our research engine to make sure we're hitting on everything when we think about what types of products and what type of digital assets we need to bring to market to solve challenges that our customers have, both end users and operators. I guess, you know, as you're thinking about, and maybe this is a good question from the sales perspective, but as you're thinking about speaking to operators, Andrew, and they're thinking about buying equipment for anywhere from three years for premium gyms, but could be as long as seven years for HVLP gyms, they look to you to help advise them on where consumer trends are going, I would assume.

6:17They're coming to you and saying, here is the type of members that we have coming into our gym. Where do you think they're going? And they're asking you for your own innovation roadmaps. As you think about the shift, there's two things I'd love to touch on. One, I think it's a return to fundamentals. There's a return to the base room and hammer strength. Some of that equipment that I've used 25 years ago, 30 years ago, is still relevant today. I look for that equipment when I'm out on the gym floor. But at the same time, technology has played such a big So when you're speaking to an operator, how do you speak to them about the shifting trends of a consumer?

6:48Yeah, it ties well to kind of a lot to unpack from what Matt said. So, you know, what I heard was demographics, generations, trends, longevity, physical appearance versus internal, like, you know, your wealth span or health span. And then how that ties to what operators should buy. It is really, really difficult right now. It is incredibly difficult. Dan and I have had his role as chief product officer and my role, our job is to have healthy debates about where the product direction should go on trends. And the speed at which information is moving right now is so fast. And you even said one that I forgot to mention was social media.

7:33I mean, it's unbelievable. So for us to deeply understand the demographics, how those demographics tie to our customer base, who they're trying to attract, how that translates into equipment selection, to the digital features, whether it's extremely analog, 25-year-old hammer strength product, or if it is, you know, one of our newest, launched two years ago, our Symbio Cardio line, which, you know, has an adaptive flex deck. It is we need to get hyper-personalized. And I know that's kind of like the term that everybody's throwing around now is like hyper-personalization. But it is 100 % true. I mean, if I look at my organization, we have a relatively young marketing team.

8:18And one of my marketing leaders told me, and she's on the younger side, she said, my generation, we don't care that much about our physical appearance of our bodies. We want to live longer and live really, really well. So we're studying trends on social media, but we're also studying trends in regards to health care. I'm like, how do I extend my life? VO2 max, you know, leaning into muscle training. So that's kind of a great answer to your question. But what I would say is it is very bespoke based on the operator, what demographics they're trying to serve, and then also what segment they're in.

8:51As you said, HVLP all the way up to ultra luxury.

8:54Matthew Januszek:I think when, like Dan, we've known each other for a long time. We were just talking off camera. You were working in Life Fitness in Ely 15 years ago, and that's probably where we first got in touch with each other. And prior to you coming over to the UK, a lot of the operators in the US were, it was very much like this best in class. Probably, you know, something to do with the fact that not all the brands had a completely rounded out product range. So you had even Life Fitness in the early days were cardio only, and then they acquired a strength line and then Hammer Strength. So their offering increased.

9:27Matthew Januszek:But a lot of brands just had certain products, so you would very frequently see inside a facility the best in class because those product companies just did one or two things. There's definitely, again, coming back to your comments about social media, there's definitely this move where some of the gyms are saying, well, look, we've got the best chest press and the best leg, you know, hammer strength. What do you call it? Well, you've got the linear leg press, the legosaurus, the eight squat, yeah. Yeah, yeah. You've got a lot of this stuff happening. And I suppose as a brand of Life Fitness, you can definitely lean into that a lot more than most people because some of these classic brands that people were looking at, you guys manufacture.

10:10Matthew Januszek:How do you sort of balance dealing with so many different customers? And I know you spent quite a lot of time in Asia as well, where the market's very different there than what it is in the US and even into Europe to some extent. So how do you look at those trends? And what are the things that, from a brand perspective, Life Fitness, Hammer Strength, and others that I may not be educated on, but where are you putting your focus at the moment to, I guess, rather than be a bit of a jack-of-all-trades, sort of mastering certain areas where you can really have a competitive advantage over other people that people have options for?

10:49One of the things as we've kind of transformed this business over the last three years, we've really looked at our brands. And like what is life fitness really, really good? What do we stand for? And we are a premium brand. We focus on cardiovascular, but we make a premium strength line. You think about Hammer Strength, you know, it is a performance line, but it's also a bodybuilder line. It's also biomechanically. And I would argue, and this is agnostic of who I work for, I'd argue Hammer Strength has the best biomechanics for any plate-loaded piece in the industry. And so we strategically said there are certain segments that we are not going to operate in because we can't execute on that really, really well.

11:29And our job is to serve our customers. And Dan said it really, really well. He said there's two sets of customers. There's the operator, but then there's also the end user. And if we're not serving both of them to our best of our ability, we probably shouldn't be operating in those segments. I mean, I'd love for you to add on to that, Dan. Yeah, I think you're right, Matthew. Coming from the United States in 2008, and I had been with the company at that point, call it 14 years. Absolutely best in class in the United States. You can go into any club and you would see multiple brands everywhere.

11:59That was the status quo. To going and leading the UK business where that team was forced to sell the entire suite because that's how it was consumed by the operator in Europe. Really different, right? But it all goes back to understanding what the operator needs and how can we fulfill that. Now, one of the biggest challenges from a product standpoint, and this is where Andrew's partnership with the product side from the commercial side is, really understanding what are the biggest trends, right? There could be 100 different trends, but which ones do you place your bets on, right? You know, one of the things that we see right now is how long have people been training the glutes, right?

12:38Forever. But now all of a sudden, it is a major trend, a major trend, so much so that you've got companies where that's all they do is make those types of products, right? Well, we have those products, but we don't have maybe the right mix of products, but we can get there. And with our brands and our biomechanics and our discipline and the way we develop things, we can go after that market if we think that that's an opportunity. And what I would say is understanding the trends that make a difference, the ones that the influencers are talking about, maybe not just now, but are going to be talking about into the future.

13:12Is it going to be sustained? And then that's where you place your bets from a product portfolio and arm the commercial side to be able to go out and tell an entire story around the portfolio. Something which I've seen from the operator side, and I agree with you, there's always two personas. You've got the member that you're really building the product for, but the operator who you have to serve, and that's really your client. On the technology side, we've kind of seen some of the same things. So operators looking for a consolidated all-in-one platform. They're looking to get more out of their partner because they are leaner on their end.

13:43They have less people managing the floor, less people managing their technology infrastructure. So they're leaning on their vendors to do more of that. And I think that's why you're seeing the drive towards how much can one vendor provide to you. And then to your second point, it's around saying, well, because you're trying to be and do more, you might not have that exact product or that exact feature or the exact machine we spend a lot of time in really building awareness so you're talking about glutes and we were talking about this off camera too this morning in preparation for this because yes we do see that so sometimes we've toured many many gyms and you see some of the more smaller skilled operators where they've got the flexibility to get what they consider best in class but then when you look at your line you You could do the same movements.

14:28You could have the same impact. So how much of that goes into building awareness with the operator, also building awareness with the member? Because I think those are two different tracks. So are you educating the operator to say, well, you know, these same movements here you can actually do with this exact line. And then going to the member, are you pairing up with influencers? And I can appreciate it. This is a two-part question, so take it however you want. I'll start first because it's very topical because these are the things that we will discuss over, you know, product reviews. But this is where I go back to social media.

15:00Social media has been phenomenal in terms of education and awareness. And I would argue without any data that it's probably driving more people to sign up at the gym. I would argue that. But on the flip side, the dark side of it, it also is an educational platform for people that have no business or knowledge to be teaching people. And I'll give you an example. You know, I saw a piece of equipment. It's a vertical squat press. And I was like, goodness, that is, I mean, just a dangerous, dangerous piece of equipment. And you can get the same movements from many other squat presses, whether it's life fitness or hammer strength.

15:41Educating the member in 2026 is extremely difficult because they get the exposure to social media. They will automatically say, that is how I want to go train because that's how I've learned it. And we need to make the decision as an organization, are we going to create those products that mimic that movement for that member, or do we want to do the major lift of educating the member? Which is a major lift. It is a major lift. I think one other question, Dan, maybe for you, but as you're thinking about that and shifting preferences, look, on the technology side, I've moved product roadmaps from three years to 12 months to now three months.

16:19Right. But I can do that because I'm not dealing with tooling and hardware. I'm dealing with software. How do you shrink your product roadmaps? I mean, I'm thinking related to changing preferences in social media, changing on consumer needs. Are you shifting your roadmaps or shrinking them? Yes. I would say we call that product prioritization. And we have regular meetings at the executive level, but also with the commercial team where we say, hey, this is our roadmap. This is where we're headed. Are we still on track? Now, you're not going to take a project that takes 18 months because you've got to do all the testing.

16:52You've got to follow the stage gate process. You have to do everything that you need to do to make it a life fitness hammer strength product. You still have to do that stuff. That's why it's incredibly important that you do the research up front and that you understand if it's a sustained trend. And that you're going to capitalize on that when you come out with it. Because when you come out with it, one thing is coming out with it. But even more important is does it work and does it not work like anything else? Let me give you a quick example. One of the things that astonishes me from the strength development team at Life Fitness.

17:23So pendulum squats have been out forever, right? And now all of a sudden they become very popular. Our team went back to the drawing board and said, how can we do a pendulum squat different? And then now you go, I can't go out on social media without somebody popping up in my feed with our pendulum squat going, this is the most incredible pendulum movement I've ever had. And I think that just goes back to it's understanding the user and what they want deeply, the latent needs. And maybe not even knowing what they want, but you're understanding what they're saying and baking that into the product development process and coming out with the right product.

18:00You know, Mo, the other thing I would say is digital is completely different. And so I absolutely believe you have to think about those. Almost, we do at Life Fitness is almost two different businesses. They move differently, but one supports the other. The one thing that I think is different here at Life Fitness and the way we look at it is digital is an enabler of the usage of the equipment. So the more we can use digital to get people to use our equipment in the most effective manner, that's what we're after. And it's why we truly believe in open and partnering with people because this operator may use these digital assets.

18:36This operator may use these. So building those partnerships across all those types of different digital partners is critical. And I think remaining truly open is really important and the key to success on the digital side. And moving quickly, like you said, it's not the same gestation period.

18:52Matthew Januszek:Yeah, today's operator, definitely, I listed a bunch of things that would come up in a typical facility. And, you know, there's a requirement for strength. There's cardio. There's functional training. There's Pilates, which I believe you guys used to actually, before Pilates became a thing, you had a Pilates product. We did. I did not know that. We did, yeah. You've got programming, technology, design. And so there's a lot of different things there. And hearing some of the things you said, and we talked a lot about specific products like Pendulum Squat, which I do think is a great product, takes a lot of the pressure off my knees when I use it, which is why I like your ones compared to the other ones.

19:25Matthew Januszek:But do you think the future of the manufacturers is the best individual products or the best ecosystem? Or is it really the stakes are pretty high where you've actually got to be really good at a combination of both. Amigo? I'll take a crack at it. I think it's a little bit of both. I mean, I think, you know, depending on the brand, you've got not just the brand heritage, but you have inherently what you're really good at. You know, and again, the easiest one for me to gravitate towards is hammer strength. I mean, hammer strength, biomechanically, we mentioned durability, reliability. They want to buy something that's not going to break over, you know, So, you know, here we've got a piece that's 15 years old and it looks like it's from three years ago.

20:09So I think there's the bit of that, which is living up to your brand promise, which is incredibly important to us. But equally important is building a coherent ecosystem. And Dan did a great job of touching on it, which is, you know, partnering with companies that whether they're MMS systems with operators or, you know, they have a PT system or they're leveraging some kind of app on their content. Like our ability to partner and to create a holistic ecosystem that does two things. One is it makes the member experience seamless and frictionless. So a member can come in, they can sign up with ease, they can track their metrics.

20:46I think what Dan's digital team is doing is just incredible work on, you know, how do we continue to leverage AI and how do we help people drive the outcomes? Okay, so that's one path. But then the second is, how can we deliver an ecosystem, not just hardware but software, to our operators that can say this is what is happening with your member behavior, both in how they're utilizing the equipment but also how it ties to retention, how it ties to retrition. This is your total cost of ownership. This is to something as simplistic as a heat map and saying you should probably swap Treadmill 12 with Treadmill 7 to continue to have that longevity with your equipment.

21:25And so I think it's a blend of both. And I feel like the path that we're on with our product development team, both cardio strength and digital, we're on a very, very good path. Yeah, I absolutely think it's both. A hundred percent, you have to be good at both. If you think about an operator in the business we're in, people think of it as a one-time equipment purchase, right? I'm going to buy this equipment. And that's not what it is. What it is, it's a purchase that they're going to have for maybe five, seven years. So it's a commitment. It's a relationship. It's a partnership. And it's really important that at that moment in time, that's not the end result.

22:04That's not what they're thinking about. For us, it's the thousand questions we answer prior to that in development to make sure that we're offering the right portfolio to the operator and to the end user so they keep and retain those members over time. So you absolutely have to have a breadth of product. but you also have to have those heroes, whether it's a pendulum squad or the super fly, or whether it's a symbiote treadmill, you have to have those heroes to tell that ecosystem story. But when I say ecosystem story, that doesn't mean that you have to use our ecosystem. It means that we play nicely in a world where anything can plug in and it's the greater of everything all together in an ecosystem.

22:47Matthew Januszek:So on that, Dan, just because I think that's an important point. So So because pulling that off is pretty challenging. And I've known MyFitness for a long time. You've been with them for a long time. And I guess it's also managing the expectations of people. Whenever a piece of new product, technology or whatever comes out, there's a high level of expectation. And with a brand like you guys, you've also got to deliver upon that. And so when the technology is moving so quickly or the expectations that they can get from a very low-cost operator, in some cases could have much faster response, faster services.