Bringing a European business model to Australia

With seven facilities in Melbourne and plans to expand interstate in 2016, Kieser Training has successfully adapted a European business model to the local market. Tony Smith, Managing Director of Kieser Training, shares his top tips for bringing a European business to Australia.

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Photo: Kieser Practice Principal and Sports Physiotherapist Richard Wallace conducting 
a back strength assessment with Joel Selwood, Captain of Geelong Football Club.

A decade after launching in Melbourne, Kieser Training, which offers a combination of physiotherapy, rehabilitation, strength and conditioning training to individuals, corporate clients and elite athletes, will open its first interstate centre with a Sydney facility slated for 2016. Plans are afoot to grow the business from the current seven centres in Melbourne to 20 centres across Australia by 2020.

Bringing the concept to Australia from Europe was the brainchild of entrepreneur and private equity financier Gary Harley, who’s now Chairman of Kieser Training. With an extensive background in the health and fitness industry, his motivation was to find a model that held a strong medical emphasis specifically to better meet the exercise and health needs of the baby boomers and Gen X.

The first four years were a struggle as the European business offering was progressively adapted to suit the local market, according to Kieser Training’s Managing Director, Tony Smith, who joined in 2010.

“The biggest challenge, however, was the lack of brand awareness,” says Smith. “Kieser Training started in Switzerland in 1981 and is an extremely well-known brand in Europe with over 30 years of building presence. When we opened, it was almost the polar opposite in that there wasn’t any brand recognition of Kieser Training in Australia. We think of ourselves as a whole new category, because when you try to line us up against the logical categories, we’re so different to both. We continue to invest heavily in promoting our brand, our services and what we stand for.”

Adapting to Australia

The adaptation of the European model shifted from an 80 per cent emphasis on strength/resistance training and 20 per cent on therapy to an even split between physiotherapy and the strength/resistance training with qualified physiotherapists, exercise physiologists and exercise scientists. From there, the business went from strength to strength.

This shift helped Kieser build up a client base in the government and corporate market, providing pre-employment screenings as well as rehab programs for staff on worker’s compensation. Clients include Melbourne’s Metropolitan Fire Brigade, Victoria Police’s Search and Rescue Squad and some of Melbourne’s largest corporates.

Smith describes Kieser as “the future of physiotherapy and a gym for all ages”. Its clients have ranged in age from 8 to 93, but the sweet spot for its membership base is typically 40 years and older.

“There’s no music, no TVs and no mirrors, and it’s not about ‘look at me, look at my muscles and how big I am’,” Smith says. “It’s about functional performance; something people are looking for as they age so they can do the things they love for longer whether its snow skiing until they’re 70 or playing golf into their 80s. Our strong medical emphasis means we understand the challenges of injuries and pain as people get older.”

Elite athletes

In addition to its regular members, Kieser Training works closely with a number of elite sports including cycling, snow sports, Premier Cricket, AFL, NRL and Super Rugby. Smith says the elite sporting clients tend to come to Kieser for its screening tools and specific rehab programs.

“If you look at the high levels of sport in Australia, they are very well resourced, however, we have some unique equipment and rehab programs that complement their capabilities,” he says. “While that’s not our bread and butter, it’s good for our team to be working with athletes and other high-performance advisers at that level.”

Among its sporting clients is the Geelong Football Club, which Kieser Training screened pre-season to evaluate specific aspects of conditioning. “We’re looking for a correlation between the results of those tests and the resilience and durability of players over the season,” says Smith. “Some players were identified as having specific deficits and worked with our team to address those weaknesses over the course of the season.”

A big fan of Kieser Training’s approach is Stirling Mortlock, ex-professional Rugby Union player and former captain of the Wallabies, Melbourne Rebels and Brumbies. Stirling joined NAB after retiring from football and is a currently Manager, Wealth Relationships NSW.

Mortlock went to Kieser for rehab following back surgery in 2010 and continued to use the facilities while playing for the Rebels before relocating to Sydney.

“Through that experience we’ve built up a strong working relationship with Stirling,” says Smith. “When Stirling asked what we were doing for our staff in terms of employee benefits that very quickly opened the door for Stirling, in his role at NAB, to conduct a review. As a result, we have not only revamped our staff superannuation we have also implemented a company-wide salary continuance plan. These benefits play an important role in our efforts to become an employer of choice.”

Succession plans

Kieser’s expansion plans focus on company-owned centres, identifying future leaders and offering them equity in the business. With the original shareholders in their 50s and 60s, there’s been a big emphasis on succession planning. Management identified three physios in their late 20s, gave them the opportunity to take a small stake in the business and is transitioning them into running the business over the next few years.

They’re also being sponsored to study for an MBA. “When I was 25 I was fortunate to be sponsored through an MBA,” Smith says. “From my perspective it gives young people from a non-business related discipline the confidence to know they can work effectively with other professionals in a corporate setting.”

Tony Smith’s top five tips for businesses adopting an overseas business model

1. Don’t underestimate the marketing challenge inherent in establishing an unknown brand in a new territory, especially when that brand represents a whole new category of product or service.

2. The uncertainties surrounding currency fluctuations often requires more creative approaches to financing capital outlays. All of our equipment comes from Switzerland and Germany for which we are exposed to movements in the Euro, so it’s important to understand currency fluctuations and try to work them to advantage.

3. Stay flexible in terms of understanding where you need to adapt, whether it’s in the positioning, marketing or operations of the business.

4. Don’t assume that the IT systems that come with the business from overseas will necessarily work in Australia. We have had to invest heavily in building proprietary cloud-based software platform to suit the Australian environment.

5. Hire people with the right attitude, build an environment and culture that focuses on grooming the individual and build capabilities in the team to be adaptable as possible as the business evolves.

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