Welcome to the latest edition of our e-newsletter
April 2009
Together We Are Stronger
David Minton looks at how the industry can pull together in these tough times to emerge in better shape
The national media’s continuing prediction for 2009 (see recent article from the Financial Times), that private health club memberships are in decline cannot currently be refuted by the industry, specifically because of the lack of an industry benchmarking service such as the Fitness Market Monitor. Without the industry pulling together to pool data we can’t defend our performance, let alone proactively declare the resilience of our industry in the current climate and that could, in turn, attract early investment into our sector. We are all losers without real-time data to demonstrate, at the earliest opportunity, how committed our consumers are to their exercise.
In our next issue of Insight, early May 2009, we will be presenting the annual State of the Fitness Industry figures which will show how the industry's structure, membership and value have changed since the end of March 2008. That’s something to show for all your hard work; but how much better it would be if those operators who haven’t yet managed to get behind the benchmarking service would see the bigger picture and help us all take our industry forward.
So please join me in urging all those who haven’t yet signed up to the Fitness Market Monitor to contact us today and make that commitment.
London's Prices Held Below Inflation in Bid to Increase Participation
Findings from the new Pricing Intelligence Report Comparing
Sports and Leisure Facilities across London
London’s sport and leisure price increases for 2008-2009 have been set below the rate of inflation – a key finding from the latest London-wide Leisure Pricing Report from The Leisure Database Company.
The Leisure Pricing Report compares prices for 16 sports and leisure facilities across the 33 London Boroughs and reveals an overall 3.6% increase in charges, below the rate of inflation (4.6%), and below last year’s increase of 3.9% as Councils seek to increase participation in sports and leisure activities.
26 of the 33 London Boroughs have set leisure charges below or in-line with inflation to compete in the current economic climate.
To obtain a copy of the report please call 020 7379 3197. For further summary findings
click here
Woking Borough Council Increased Fitness Income by 68%
In 2006, Woking Borough Council was looking to maximize market opportunities for their leisure services and to increase income from leisure as well as increase accessibility to their leisure centre, particularly amongst the low earners in their borough.
Analysis undertaken by The Leisure Database Company of Woking’s fitness members, borough demographics and competition revealed a number of interesting findings:
• Woking’s gym members were affluent people who could afford to be members of private facilities.
• The membership profile matched the dominance in the borough of affluent populations. However, the low earners were under represented in usage of the leisure facilities.
• Many gym users were casual users rather than members.
• There are a number of quality private health clubs operating in close competition to Woking Borough Council’s facilities.
• Prices at private health clubs were too close to those at the leisure centre.
The conclusions drawn from the findings were a) the usage volumes of the centres were deemed to be vulnerable to the local competition and b) that income from the gym could be increased by encouraging users to join a membership scheme. Also, low earners were not using the centres in representative quantities.
New Horizons, a strategic leisure consultancy, working with Woking Borough Council recommended a decrease in the DD fee for gym membership from £49 to £35 due to the competition in the area, as well as the introduction of a DD fee for Concession users (people on low income) at £21 per month. To increase loyalty for using the leisure centre and to increase accessibility of the facilities to the low earners in the borough, they recommended the introduction of a leisure card. The Key card was launched on 1st April 2008 with a striking image. Cards for all types of users look exactly the same, so there is no discrimination for people on low income.
The results have been impressive. Since the changes were introduced, Woking have seen a 68% increase in overall membership income, from £194k to £325k, which means more guaranteed income during quieter periods of the year. The number of members on direct debit or annual memberships has increased from 650 to 2,000.
The number of members signing up for the concession membership (DD and annual) has more than doubled and casual concession usage has also risen by almost 45%.
“Woking Borough Council is very pleased with the new Key card which is more than just a leisure card. It currently includes almost 30 partners and more new developments are planned. The simplification of the pricing structure helped receptionists and customers understand the leisure scheme better and also improved business during the poor economic climate. Because some prices were reduced this meant people could increase the number of times they visited the centre. Increases have also been seen in casual swimming as well as attendance of fitness classes. Consultation played a key part in understanding the customer’s needs and changing our product offering accordingly”, commented Riette Thomas, Marketing and Research Officer at Woking Borough Council.
ISRM Teams up with The Leisure Database Company
Following recent negotiations between the two organisations, The Leisure Database Company (TLDC) will become ISRM’s ‘official data supplier’. For more details click here
Dr. Paul Bedford, the fitness industry's authority on retention asks
'Is providing service so difficult?'
Can the fitness industry provide levels of service equal to that of other hospitality providers? While fitness members generally want a nice environment to exercise in they also want to experience a service. And we know that the key to retention is the successful interaction with members.
Hotels seem to be able to replicate service levels across multiple sites and countries, whilst the fitness industry struggles. What level of service should you expect across the price range and is it possible for an operator to differentiate itself from the competition using a service approach? Do operators have a choice in this regard any longer with the arrival of budget clubs where facility standards are as good as facilities charging considerably higher membership fees?
Seth Godin, keynote marketing speaker at the recent IHRSA conference, stated that in a marketplace where consumers have more power, operators must show more respect for customers by keeping and delivering on their promises.
At a time when companies are trying to maintain their existing customer base, as well as win new customers, Seth suggests that companies need to go to extremes. Be remarkable, be worth making a remark about. There are too many average clubs, providing average stuff for average people.
To discuss retention solutions for your organisation please contact Paul on 07956 311899 or email paul@theleisuredatabase.com