Welcome to the latest edition of our e-newsletter
February 2010
Now we're into 2010, David Minton asks;
What investments will you be making to build your business?
With fitness becoming increasingly synonymous with ‘health’, opportunities abound at a time when the health of the nation is worsening – recession or recovery!
The NHS Change for Life campaign is an excellent example of how people’s behavior can be nudged, slowly, towards making better choices. Private hospitals, Nuffield and BUPA, along with health insurance companies are involved and the re-focus and investment in the former Cannons chain of clubs and members of staff shows the long term commitment we want and need from the industry.
New Approaches
We saw a slight increase in the number of consumers joining fitness facilities in the 2009 FIA State of the UK Fitness Industry figures – there was a 0.8% increase in memberships, that’s 119,000 new enthusiasts, on the previous 12 month period. This is positive but pathetic at the same time. Sustaining the More People, More Active mantra will require fresh approaches to appeal to the next 8% so we break the 20% barrier by 2012.
New Focus on Activity
We have a window of opportunity with the run-up to the London Olympics and the Government embracing the physical activity agenda to address public health issues.
New Consumer Groups
It’s difficult, however, to justifiably claim to have made significant progress towards building a healthier future, both socially and economically, without making in-roads to the inactive sections of our society. In developing new products and services for these new target groups, we need to better understand them. Who are these target groups? What is their buying power? What motivates them? What’s their internet interaction? Customer segmentation tools such as Mosaic help unlock new potential markets by describing who the new consumers could be and crucially how to engage them.
The Opportunities Within Our Facilities Already
Of course we would like to see a greater increase in retaining those customers we have worked hard to attract to our facilities. The most recent FIA retention report found the % of members sticking with their membership at 3, 6, and 12 months to be 93.6%, 84.4% and 65.8% respectively. If operators can work on understanding and addressing member’s issues which cause them to quit their memberships, the curve of attrition can be flattened leading to more retained members who are more cost effective to look after!
The FIA retention report also found that 16-24 year old gym members quit their memberships at a rate of 50 per 1,000 members whilst 35+ year olds only quit at a rate of 35 per 1,000. Just by working to attract the older (35 years and above!) member, operators have an opportunity to retain members for longer.
With all these opportunities evident it’s just a question of selecting the right ones for your operation.
To read more articles by David Minton click here
The Rise of the Knowledge Economy
Will Hutton, leading economic writer and former editor in chief for the Observer, spoke engagingly at the recent BISL conference where he postured there will be growth over the next decade in the sport and fitness markets.
But to realize this growth, businesses will have to think and act fast and business models will need to be changed accordingly.
He stated evidence for the rise of a knowledge economy where two key drivers of growth, opportunities and profit, will be the new technologies and the shift in demand to higher value goods and services. He put the case for investment in knowledge for the future, whether that’s collective corporate knowledge or individual ‘expertise’. This knowledge economy will see the intangibles such as brands, leadership and ICT (information, communication and technology) rising further in importance. Interestingly, in this, as other recessions, it is these intangibles which have been less affected by the downturn than physical assets.
Will Hutton highlighted how, as consumers, we are increasingly becoming authors of our own lives, and those businesses that are taking advantage of this trend are winning. Experiential services are what the consumer is seeking. So we see the increase in adventure holidays, custom cars, gastro pubs and shopping mall experiences.
The challenge is on to engage in a different way with our customers, understanding their increasing sophistication and optimizing the new technology that gives us more and faster access to the consumer. How will your business take advantage of the Knowledge Economy?
Investments in Customer Understanding
Smart businesses use their knowledge of customers to grow their business.
Identifying who their customers are, where they live in relation to their fitness facility, what their interests and lifestyles are and what media they read will inform customer strategies. Our customer profiling services use the Mosaic customer segmentation system to provide a rich picture of who to target and how to reach them.
We can also combine this detailed knowledge of your customers with an in depth review of the future growth potential in your local catchment area.
Understanding future demand is dependent on the competition faced locally, the make-up of the local market and what current levels of penetration are being achieved.
These are customer development areas we can help you with. If you would like to know more about your customers and potential market, we can help. For further details, contact Natalie on 020 7379 3197 or email natalie@theleisuredatabase.com
Dr Paul Bedford, the fitness industry’s authority on retention, asks;
Is personal training a red herring to service provision in the fitness industry?
It could be argued that Personal Training (PT) has a disproportional place in the service provision for members. Are we failing the bulk of our members by trying to increase the revenue from a few?
While PT is an important part of some operators services, does it detract from providing the level of service all members should expect from their monthly fee? In private facilities, there seems to be an inbalance in favour of those who are prepared to pay a bit extra. Whilst in some circumstances, the general members don’t even get a basic level of service.
Did we introduce PT to add to the services we are providing or to try and hang onto our good instructors in the face of increased competition for good staff? Once we have given the staff the experience and the opportunity to provide PT services, aren’t operators at risk of the PTs leaving to set up on their own and possibly taking valuable clients with them?
Surely the new focus, in the current climate, is to get back to basics and provide fantastic value for membership fees and deliver a good quality service to all our members.
For details on how profiling your customer base can help in the retention of members, give me a call – 07956 311899.
Dr Paul Bedford will be speaking at:
Institute of Technology Tralee, Ireland, 18th February – Exercise Adherence
ILAM Ireland Workshop, 19th February – Retention Strategies
IHRSA Convention Wednesday 10th March – Delivering a Retention Strategy For Your Business
IHRSA Convention Friday 12th March – Chairing the Retention Panel
The Way Forward for Sports and Leisure Facilities
Have your say and comment on the Way Forward for Sports and Leisure Facilities by completing CCPR’s online survey. Simply click here to comment on facilities and improvement initiatives.
The survey seeks to gain expert and public comments for the Independent Facilities Inquiry, chaired by broadcaster John Inverdale and administered by CCPR. The inquiry is seeking input from experts and the public on how every citizen can access sustainable and affordable sports and leisure facilities.