The president of the Prairie Life Health and Fitness Centers tells what it takes to be successful in America’s heartland
By Jon Feld
CBI: You’re the owner a small regional club chain in the Midwest. What's it like? What's your biggest challenge?
Dean Rasmussen: The key challenge is to exceed our members’ expectations on a daily basis and, thereby, ensure retention. When people join a club, many of them feel, incorrectly, as though they’re halfway home to their goals; they think that, if they drive by the club occasionally, they should begin to feel and look better, but, clearly, it doesn’t work that way. Our principal, primary, job is to work with, and communicate with, members, especially the first-timers, so that they’re comfortable here. We need to make sure they’re not intimidated in any way, believe the club can help them achieve their dreams, and want to be here. We’ve instituted a number of programs that are designed to integrate the new member, to cultivate a solid relationship with them, but, sometimes, it’s simply a matter of picking up the phone.
CBI:What distinguishes the Prairie Life Health and Fitness Centers from other regional chains? What about it, if anything, makes it unique?
DR: One of the distinct advantages we enjoy is that, because of the size of our organization and the location of our clubs, it’s easy for the executive team to visit and use our facilities on a regular basis—just as members would. I’m in one of our clubs at least six days a week, either working out or just plain working, and, when I’m there, I want to experience exactly what our members experience . . . and, like them, I want to be satisfied. When I’m working out, I’m generally thinking about the level of staffing and service, and I often notice things that I don’t like or might want to change. Frequent on-site visits allow us to see, smell, and feel our business. They also make it easier for us to work with local management.
CBI:So you’re one of those owners who ‘walk the walk and talk the talk.’ What sort of an exercise regimen do you pursue?
DR: My standard routine is to run three to five miles, three times a week, and I do weight training with a personal trainer twice a week. Because I’m adamant about ‘shopping’ our members’ experience, I also take part in group cycling, yoga, Pilates, and a number of other classes. We stage a mini-triathlon every year that I participate in, and, a couple of years ago, I ran in the Chicago Marathon.
CBI:What about competition? For a lot of single clubs or smaller chains, the concern about the large chains is a principal, sometimes-paralyzing, one. How do you deal with that challenge?
DR: As far as competition is concerned, that's part of the fun of being in business. The chief advantage that the owners of smaller operations enjoy is their ability to be involved—actively involved—in their clubs. The larger a company gets, the less time you have to deal with operations in a hands-on way. We have two centers in West Omaha, Nebraska, and, over the past two years, 24-Hour Fitness—one of the largest chains in the world—has opened three facilities in that market. We’ve been able to compete quite successfully be focusing on what makes us different, and by working hard to let our members know that we’ll continue to provide great service—at competitive prices. In the final analysis, it’s all about the caliber of your people. You can have the fanciest facility and the best equipment, but what it boils down to, really, is staff and service, and we excel in those areas.
CBI:Do you regard that as one of your own principal business strengths—the ability to create and oversee the systems and provide the environment that ensure staff and service excellence?
DR: As an owner—whether you’re talking about the clubs or our restaurants—my most important responsibility is to find good people who can help me run the business, and, in turn, to do whatever I can to help them perform at the highest level. We’ve been very fortunate in terms of club management; we’ve developed great supervisors and program directors, and our turnover rate is well below industry norms. One of the reasons for that is we believe strongly in rewarding good work; several of our managers have ownership shares in the clubs where they work.
CBI:More and more club owners seem to be recognizing how vital government relations, lobbying, etc., are to their business. How involved are you on the legislative and regulatory fronts?
DR: Well, as you know, one of my partners is Bob Kerrey, the former Democratic senator from Nebraska, so I’ve always been quite aware of the critical role that government plays in our industry. Decisions made by legislators, regulators, and agencies such as the Internal Revenue Service (IRS) clearly affect our business. I’m active in this area because it’s important.
I’m especially concerned about tax-exempt fitness providers. My biggest headache, as the operator of a regional chain, is having to compete with nonprofits. YMCAs, hospitals, universities, and others continue to stray from their mission, and to do more of what we do, in much the same way that we do it. Ys are being built in very affluent neighborhoods and—as here in Omaha—hospitals are now building full-service fitness centers that are being advertised, marketed, and run just like for-profit clubs.
If people involved in the political process have the courage to speak out against the unfair advantages that nonprofits enjoy, they can certainly count on my support. There aren’t too many, it seems, who are willing to wage this battle, but those that are—I’m behind them
CBI:One of the pieces of legislation that IHRSA is supporting is the Workforce Health Improvement Program (WHIP) Act, which would provide for the equitable tax treatment of employer-subsidized fitness programs, whether they’re provided on- or off-site. What are your views on initiatives of this sort?
DR: I think it's an excellent proposal. The message it communicates is that regular exercise is a productive and cost-effective form of preventive healthcare, as well as a practical way to treat certain medical conditions. This sort of government involvement and legislative action is good for clubs. We have a great industry and can do what needs to be done. The government's role should simply be to motivate people to take part; if it educates people about diet and exercise, and encourages them to take positive steps, we can do the rest. We want government to work with us—we don't want it to try to run the show.
CBI:Do you think that national or state governments should offer tax credits to individuals who belong to clubs or engage in other healthy lifestyle activities?
DR: No, I don't. Generally speaking, tax credits aren’t good public policy.
CBI:Everyone is concerned about rampant obesity, but, underlying that, is what amounts to an ‘epidemic’ of physical inactivity. According to the U.S. Centers for Disease Control and Prevention (CDC), 40% of Americans aged 45-64 and 60% of those over 75 are sedentary. What can be done to reverse this trend?
DR: The answer to your question is easy, but, unfortunately, delivering the solution is quite difficult. A bedrock understanding of the importance of health and fitness—the information, as well as the actual implementation—has to be made an integral part of every child's lifestyle. We have to make children aware of the incredible importance of proper diet and regular exercise from an early age, and need to make both accessible and appealing. At Prairie Life, we've always offered a tremendous number of kids' programs and camps; a large portion of our membership is under 16, and, hopefully, we’re pointing these youngsters in the right direction. We also have a large number of seniors and, in the same way, try to design programs for them that are fun, rewarding, productive, and, most importantly, social—that's what keeps them coming back.
CBI: Are you doing anything today that the rest of the industry has yet to catch onto? Do you feel you have something new and valuable to teach other operators?
DR: I'm afraid that it's the other way around. The industry is constantly teaching me. Whenever I travel, I visit other clubs, looking for ideas, techniques, equipment, or programs that might help us do a better job of managing or operating our clubs. The great thing about this business is that I never come back empty-handed.
Jon Feld is a contributing editor for CBI and can be reached at kjfeld@rcn.com.
