Growing membership and profit

GROWING MEMBERSHIP AND PROFITTHE FUTURE OF

FITNESS

THE FITNESS INDUSTRY HAS EXPERIENCED MASSIVE GROWTH IN THE LAST 40 YEARS…

1960 1970 1980 1990 2000 2010 2020 2030 20400

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20

30

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50

60Health & Fitness facility attendance has become the biggest adult ‘sport’ in the Western world. Bigger than football, tennis and golf combined …Are all stars aligned for further growth?

US Adult Fitness Club Participation

LES MILLS INTERNATIONAL © 2013 3

SEDENTARITY AND OBESITY

• 2030, 50% de la population US sera obèse (>30% BMI)

• Between 2006-2016 the cost of the American health system will almost double to $4.1 trillion per year*.

• It seems that our health is deteriorating at almost as quickly as these costs are increasing. The current system clearly isn’t working - there’s got to be a better way!

• Prevention

*2006 US Treasury report

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LONELINESS AND DEPRESSION

‘Healthcare costs are becoming unsustainable. Currently, in the U.S, three-quarters of the $2.8 trillion in healthcare costs are spent on chronic diseases that can be largely prevented, or even reversed, by changing diet and lifestyle.Clubs also need to understand that the real epidemic is loneliness, depression and isolation. They have the chance to create a sense of community that’s truly healing.’Dean Ornish, M.D. Club Business international. June 2013


PEOPLE CRAVE SOCIAL CONNECTION…


SOCIAL MEDIA EXPLOSION Facebook 1.1

billion users per month (at May 2013)

YouTube

1 billion

Twitter

200 million

Instagram

130 million monthly users

Foursquare

25 million users


WE ARE IN A GREAT PLACE TO BE THE ONES FILLING UP THESE NEEDS…


• Challenging economy

• Competition

• Price war

• High cost of new member acquisition

• After 3 years, the membership doesn’t grow anymore in most facilities and the pressure is on to not step back…

REALITY CHECK: MOST OF US ARE BEING CHALLENGED

The white paper outlines industry ‘challenges’ that pose an alarming threat to future sustainability, growth and success…

FUTURE OF FITNESS


US: 15 millions new members join every year, 12 millions leave…

Membership retention is the largest problem

facing our industry today

OUR INDUSTRYIS AT RISK…

Reality Check• 1∕3 of members

stop attending by month 3 – that’s after an average of just 12 workouts.

• 50% of members stop attending by month 6


Based on commodities and lacking the excitement and

social engagement of sports – We are places to run on

treadmills vs true clubs.


Competition from the inside – We are a

stagnating industry and we have started to turn into

ourselves - We are fighting for the same customers

(segmentation) instead of innovating to attract new ones (Budget clubs; micro

Gyms)


Competitive industries are evolving faster than us, eg:

•Virtual exercise•Bootcamp/outdoor

•Nutritional science and medicine


THE PARADOXE Many facilities worldwide are

being hurt by low-budget competitors.

At the same time, there are successful new fitness models emerging (micro gyms) eg:• Cross Fit Studios• Orange Theory - $23 per class• Kosama, Omni, Fitness Together,

Title Boxing• Soul Cycle and Flywheel (US) –

$32 per class• Pure Yoga (Asia and US) –

$145 to $165 per month• Exhale Spa (US) – $195 pm for

classes-only membership

• People are willing to pay for value…

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WHAT DO PEOPLE WANT?WHY JOINING A GYM?

THE WHITE PAPER HIGHLIGHT 3 OPPORTUNITIES…WE BELIEVE WE CAN COMBINE THESE UNDER ONE SIMPLE HEADING

1. Health / Results

2. Exertainment

3. Community / Making friends


It’s never a question of can you

but

will you?

Motivation

RE-THINK AND

DESIGN YOUR

BUSINESS AROUND

MOTIVATION

HOW CAN WE TELL WE ARE

DOING

MORE OF THEM ATTEND MORE OFTEN. IT’S SIMPLE.

A GREAT JOB OF

MOTIVATIONPEOPLE?

ATTENDANCE IS THE MOST IMPORTANTMETRIC IN

OUR INDUSTRY.BUT ONE OF THE LEAST

MEASURED BY CLUB OWNERS.

THIS IS A WAY GOOD INVESTMENT RETURN.

$50 a month with 2,000 members,

In a club charging

extending the average number of months a member is active by just

one mont

hequals - all to the bottom line. $100,00

0So investing

$50,000

to extend the average length of membership by will double your

investment in 12 months

one month

SO HOW CAN WE

For all the good efforts of the equipment companies, it’s not about the machines. It’s about becoming more than just a place where people come to pump iron and run on a treadmill. Leave that to the budget gyms that charge $10 a month.

TO ATTEND?

MOTIVATION ‘MANAGE’

WHAT DO YOU DO TO MANAGE MOTIVATION AND ATTENDANCE BETTER?

HOW DO THE BESTFACILITIES DO IT?

Design a high-energy workout environment Create a relationship selling and new member induction systemRecruit a team of great personal and small group trainersBuild a ‘club within a club’ system for sports and other activitiesDevelop a member education and social network communication system

MOTIVATING PEOPLE

DESIGNING A HIGH-ENERGY WORKOUT ENVIRONMENT

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Optimal Height: 7 m (23 f)Minimal Height: 4.5 m (12.5 f)

HIGHLY MOTIVATIONAL CLUB DESIGN| STUDIO BEFORE

HIGHLY MOTIVATIONAL CLUB DESIGN| STUDIO AFTER

MEMBERSHIP SELLING AND NEW MEMBER INDUCTION

BEST PRACTICE

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MEMBERSHIP SELLING AND NEW MEMBER INDUCTION

• Focus of MCs to move away from selling membership options to become Membership Coaches responsible providing a relevant solution for a healthier and happier lifestyle

• Responsible for setting up the new member for success vs focusing only on selling membership…

• Accountable for new member attendance in first 3 months (2 visits per week as an average)

• Some key players in industry are moving away from membership sales commission and rewarding on new members’ attendance in first 3 months

HOT TRENDS

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• 80% of prospects have been member of a gym before…

• No sales commission since 2011

• They have cut from 12 sales consultant to 5 membership coaches per centre

• Setting up the new member for success

• Prices has increased and January 2012 has seen the highest number of sales ever

24 HOUR FITNESSMEMBERSHIP SELLING TRENDS

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• MCs prescribe a training plan before the membership solutions:

• It increases the perceived value and allows for an educated decision to be made

• It creates ‘buy-in’ and commitment from prospect… It paves the road for new members to become ‘addicted’ to exercise at your facility… and it creates a bond with the MC who become the first ‘friend’

• If a prospect doesn’t join, they leave with a 30-day exercise plan to do at home – My Exercise Calendar - Behaviors must align with Vision…

LMNZMEMBERSHIP SELLING

Get Fit

Together

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• Our goal is to get people to exercise, if possible in a gym and if possible, in Les Mills gym. If they don’t join today, we still want them to start exercising. At some point, we are confident they will join because they need MORE, they need motivation and we are the coolest gym in town. Reece Zondag, CEO, LMNZ

• This approach allows us to:

• Come across as true fitness experts vs sales people• Preserve the relationship• Give MCs a good reason to follow up and a real purpose behind each follow-

up call • Focus no the talk being always about exercising, their goals, where they are

at with it, inviting them to an event vs latest greatest deal

LMNZ – IMPROVE THE LIVES OF NEW ZEALANDERS

RELATIONSHIP SELLING AND NEW MEMBER INDUCTION

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NEW MEMBER INDUCTION PROCESS

• MCs are responsible and accountable for new member attendance in first 3 months - about 30% of their commission) - they sell the dream; they make sure the dream happens!

• Simple but thorough member on-boarding process facilitating consistent attendance and focusing on usage during first 12 weeks. It will set the foundation for long-term engagement.

• Regular and specific points of contact

• Tracks every new member over 84 days and visits at 14, 42 and 84 days

12% of all cancellations would be avoided if all new members visited the facility at least once per week

during the first calendar month after joining.FIA Top Ten Strategies for Winning the Retention Battle

LMNZ – GOAL: 21 VISITS IN 3 MONTHS

“

“

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LMNZ NEW MEMBER INDUCTION PLAN21 VISITS IN 84 DAYS

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Result:

• 50% of members achieving the 21 in 3 months (Goal is: 65%)• Average attendance per member is 1.4• Retention is 75%

Give MCs a clear and genuine reason to call • Red status: Rescue call• Orange: What more can we do to get you here more often?• Green: High-five call!

RELATIONSHIP SELLING AND NEW MEMBER INDUCTIONLMNZ: 21 VISITS IN 84 DAYS

DEVELOP A MEMBER EDUCATION AND SOCIAL NETWORKCOMMUNICATION SYSTEM

BEST PRACTICE

We need to become true providers of holistic health.

Education changes lives and your members will love you for it.

EDUCATION: BECOMING TRUE “HEALTH CLUBS”


TALK TO YOUR MEMBERS

Create a personal relationship with your members

BEST PRACTICE

ENGAGING PEOPLE INTO ASSISTED AND SOCIAL FORMS OF EXERCISE

PERSONAL

TRAINING

TEAM

TRAINING

SPORT EVENT TRAINI

NG

GROUP

FITNESS

CREATING BONDS

• 90% of all exercisers report that they would prefer to work out in a group1

BENCHMARK FOR HIGH-PERFORMING FACILITIES• Members who attend Group Exercise

(GX) use their facility 3 times per week compared to IHRSA's figure of 1.9 member visits a week, on average.

• GX is cited as the biggest influence (40%) on how long people remain a member of a fitness facility.

• GX member retention rates are higher than other member retention rates, on average.

• 60% of people rate GX as the #1 service they specifically look at when choosing a gym.2

• Satisfied GX members refer people 3 times more than other members.

THE POWER OF THE GROUP EFFECT

THE POWER OF THE GROUP EFFECTWE KNOW IT FIRST HAND

• Independent research shows that LES MILLS™ licensed facilities have 500 more members per club than the global average.1

• LES MILLS™ class participants visit their facility at least twice as often as the average club member. 3.1 - 3.7 times per week, vs. 1.2 - 1.9 visits per week.2

• 95% of LES MILLS™ participants would recommend LES MILLS™ programs to their friends and family.3

• 71.8% of LES MILLS™ participants say they intend to remain a member of their club in 12 months’ time.3

1. Scoreboard global survey 20112. Nielsen (2010); IHRSA (2011)3. IHRSA 2009

There is absolutely a commercial connection between group fitness attendance and long-term profitable facilities!

THE BOTTOM LINE IS:Group Exercise attracts MORE MEMBERS, who attend more often, REMAIN LOYAL and attract new members THEMSELVES!

UNLEASHING THE POWER OF GF IN YOUR FACILITY

CREATE A SCORECAR

D

MAXIMISE YOUR

TIMETABLE

RECRUIT AND

RETAIN WORLD CLASS

INSTRUCTORS

ORGANISE WORLD CLASS INSTRUCTOR TRAINING

DEVELOP THE BEST STUDIO

YOU CAN AFFORD

CREATE A MARKETING PLAN

PLAN FOR SUCCESS

APPOINT OR BE A WORLD CLASS GF

MANAGER

PERSONAL TRAINING

• A big focus and passion for most managers.

• A great way to provide members with more results and motivation

• Can be a good source of secondary revenue

• A growing industry• In 2011, 6.5 million Americans

were using PTs vs 4 millions in 1999

• Despite the global economic downtown, PT as an industry grew an average of 1% per year from 2006 to 2011, while annual growth of 3.8% is expected each year from 2011 until 2016

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PERSONAL TRAINING

Contribution to weekly club attendance

And, the main factor for growth is the trend away from one-on-one training towards SMGT to increase the fun level while mitigating expenses…

PTS – THE CHALLENGE

NO ONE HAS REALLY MANAGED TO ENGAGE THE MASS…


THE HOLY GRAAL OF THE FITNESS INDUSTRY…

TEAM TRAINING

Contribution to weekly club attendance

TEAM TRAINING– THE CHALLENGE

NO ONE HAS REALLY MANAGED TO ENGAGE THE MASS…YET

INCREASINGCONSUMERS’ PERCEIVED VALUE

CAPITALIZING

HIITON THE

OPPORTUNITY

TELLING YOUR

MEMBERS AND

PROSPECTS WHY AND

WHEN THEY NEED TO

INTRODUCE A

HIIT COMPONENT

IN THEIR TRAINING

WEEK

6-week intervention – can HIIT/LES MILLS GRIT™ Series improve the fitness and health of fit adults?

*Cardio could be a combination of Les Mills’ BODYATTACK™, BODYCOMBAT™, RPM™ or BODYSTEP™

PENN STATE UNIVERSITY RESEARCH

THE SCIENCE BEHIND THE SWEAT

We collected data on blood, oxygen, fat and strength.

THE SCIENCE BEHIND THE SWEATTHE RESULTS

Triglyceridesdecrease

Oxygen Consumption increase

Body Fat decrease

Back Strength increase

Waist Circumference

decrease

3.1% 1.7% 0.8% 8.4% 1.0%

14.5% 6.4% 2.1% 21.9% 2.5%

-11.4%

+4.7% -1.3% +13.5%

-1.5%

GROUP 1No GRITTM

GROUP 2GRITTM

DIFFERENCE

SPECIALIZED FACILITIES ARE POPPING UP EVERYWHERE…

6000+ CROSSFIT centres

€10 to 20 per workout

Growing FAST

AND TAKING A BIGGER

MARKET SHARE…

ARE YOU READY FOR THE MILLENNIALS?

STAYINGRELEVANT

ONE MORE THING…ENGAGED STAFF

“HAPPY, ENGAGED AND LOYAL STAFF MAKE HAPPY,

ENGAGED AND LOYAL CUSTOMERS.”

SOUTHWEST AIRLINES

STAND FOR SOMETHING.CREATE A CAUSE, NOT A BUSINESS. GIVE YOUR TEAM SOMETHING BIGGER THAN THEMSELVES TO FIGHT FOR, SOMETHING THEY CAN BE PROUD OF.

DISCOVER YOUR TRUE PURPOSE

CREATE A CAUSE, NOT A BUSINESS

WHAT’S YOUR VISION?

FOR A FITTER PLANET

• “We are warriors in the battle against inactivity and over-consumption.”

MI Instructor Creed, 1998

• You have to find a way to make people fall in love with fitness.”

Les Mills, 1968

• “Creating life-changing experiences every time, everywhere. One class at a time, one participant at a time.”

AIM manual

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GROWING MEMBERSHIP AND FACILITY SUCCESSBECOMING A MASTER AT DELIVERING MOTIVATION

Health and Fitness facility attendance has become the biggest adult ‘sport’ in the Western world. Bigger than football, tennis and golf combined. But we have traditionally lacked the excitement and social engagement of sports, and behaved more as gyms than as true health ‘clubs’. The faster we can change that, the bigger our future!

Growing membership and profit

Health & Medicine

Transcript of Growing membership and profit