What does your fitness club stand for?
The business
case for building
a powerful
business
b i
purpose
Presented by Ray Algar MBA, MA
Managing Director
Oxygen Consulting UK
IHRSA European Congress
Lisbon October 2008
© Ray Algar – Oxygen Consulting 2008 1

Themes we will explore
2

Understanding how to
reduce the i
d h impact of
f
competitors
3

Creating a strong purpose
versus short term
h
marketing campaigns
4

How a strong business
purpose creates a deep
d
and lasting connection
with members
5

Exploring companies
that customers l
h love
6

Why does your club need
y y
a compelling purpose?
7

Everywhere,
Everywhere
consumers face
more choice 8

9

10

11

12

13

14

15

Co pet g bus esses
Competing businesses
can now look the same
16

UK G
Gym
Danish
Gym
17

Consumers begin
C b i
to select on price
p
18

So companies fight for
the lowest price
19

€6.40
€6 40

21

Great
price for
S
Spanish
i h
members
22

Time to focus
on
extraordinary
service?
23

REAL competition
…welcome to New York
l t N Y k
24

Club Closures - UK
140 132
121 112
120
100
68
Number
80
6
61
60
N
40
20
0
Year Year Year Year Year
ending
g ending
g g
ending ending
g ending
g
2003 2004 2005 2006 2007
25

So consumers have choice, but
how good are these clubs?
h d h l b ?
26

Let’s go on-line a d
et s o e and
find out
27

28

29

30

31

32

Customer Positive Negative
Type opinion opinion
Current 40% 60%
Past ? ?
Prospective ? ?
All types 36% 64%
33

Positive Negative
g
opinion opinion
Past 5% 95%
members
34

Positive Negative
g
opinion opinion
Prospective 47% 53%
members
35

Do clubs care?
36

…yes, during the
y , g
tour 37

‘the best salesman
the
ever’ 38

‘I remember how
I
friendly the sales lady
was in trying to get
me to join up’ 39

…but after the
honeymoon period
40

‘Af
‘After the i i i l session, they
h initial i h
have never checked how I
was over two years of
membership
membership’
41

‘Clubs
‘Cl b are not interested
ti t t d
in their members’
42

Membership f
b hi factors:
87% negative
43

‘I was not aware of the 12-
month contract until I tried
to cancel’
44

Chandler wants
to l
leave the gym
h
45

Friends video
46

47

Would you recommend this
club to your family and
friends?

1 in 10 (10%) promoter rate
for 6 large club chains

22% highest
chain
50

7% l
% lowest
chain
51

Little positive word of mouth
52

€17/month
53

€13/month

Fit for Free €9 90/month
€9.90/month

56

Outdoor classes
58

Outdoor gyms
59

Home exercise
60

Video gaming
61

Online Health
Clubs
62

Mobile personal
trainers
i
63

Wearable activity
tracking
64

65

MiCoach by adidas
66

So,
So the choice for clubs is
a remarkable service or
competing on price?
i i ?

How fitness clubs
can fight back
68

Clubs need a
strong purpose
69

A strong purpose helps
your fitness b
fi brand to
d
become unique
70

When you are unique and
valued, members
will pay more
71

Coke & supermarket own
p
brand - €2.12 v €0.30
590% premium
72

Cl b need to create real
Clubs dt t l
value for members
73

Th challenge is for members
The h ll i f b
to feel a strong sense of
g
belonging and connection
74

Members need to fall
in love with your club
75

Football fans NEVER
switch clubs
76

Porsche creates
passionate customers
77

78

What is your club’s
purpose?
79

What are we as individuals
passionate about?
80

What does your club
stand for?
81

‘Stand for something, or fall
forstand for change
I anything’
Malcolm X
82

Purpose goes deep
inside the company
83

To organise the
world’s information
84

‘The Body Shop ceased to be just
another trading b i
h di business. IIt
became a force for social change’
g
85

A strong purpose
provides a compass
for your club
86

C
Companies with a
i ith
strong purpose
gp p
87

88

Innocent smoothie
89

A third space for
thi d f
connecting p p
g people
90

91

7,000,000
7 000 000
92

93

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94

Brands with a cause
B d ith
ou pe o
outperform their rivals
e as
95

A small company can have
p y
a big and compelling
purpose
96

Here’s two fitness
clubs with a purpose
that members love
97

Gainesville Health &
Fitness Center
98

Meet Joe Ci lli
Cirulli
99

Joe s
Joe’s purpose
100

To make Gainesville the
healthiest community in
America
101

‘It was a 3 5 year project.
3.5 j t
We accomplished it in 2003’
p
102

‘We then changed our
We
mission to keeping
Gainesville the healthiest
community in America‘
America
103

‘To keep Gainesville healthy
p y
one business, one person,
one child at a time’
time
104

Club has engaged 60%
of G i
f Gainesville’s workers
ill ’ k
105

‘The hi d l
‘ h third place i
in
members lives’
members’ lives
106

‘Extraordinary
Extraordinary
commitment to helping
people - a consistent level
of service that far exceeds
the
th ordinary’
di ’
107

108

‘We define integrity as always
We
doing the right thing even
when no one is looking’
h i l ki ’
109

‘Members get results’
Members results
110

Free eight week cancer
recovery programme
111

Free childcare
112

Gold
G ld well city
ll it
award 2003
113

IHRSA i d t
industry
visionary award
y
114

World fitness
centre 2001
115

Members stay
on average 40
months
116

Families have grown
up at Joe’s centre
’
117

3 employees
have worked
with Joe for 31
y
years
118

23,000
23 000 members
119

Questions
120

Here s
Here’s another fitness club
with a strong purpose
121

Welcome to Eco Fit Brazil: Is
this the most environmentally
friendly fitness centre in
the world?
122

123

R d
Reduce, re-cycle and
l d
re-use philosophy
p p y
124

Save water, materials from
renewable sources
125

Solar power
126

Ozone-treated pool to
reduce chemical use
127

Organic philosophy
128

More than a fitness club –
an environmental academy
i l d
129

2,000 classes for the whole
family each month
130

Works with Greenpeace,
Brazilian Institute for the
Defence of Nature & other
environmental charities
131

Ecokids – environmental
awareness courses for
children
132

Questions
133

These clubs have a
clear purpose?
134

They will leave a strong
legacy or history
135

If these clubs closed today
they would b missed b
h ld be i d by
members?
136

These members
will not leave for
another club
137

Members LOVE
these clubs
138

These clubs generate
g
an external buzz
139

Members lives are
being improved
140

Staff are passionate and
having fun
141

Do not imitate these centres
… find your own purpose
142

Get behind a strong
purpose NOT short term
marketing campaigns
143

It helps you to become
valued b members
l d by b
and unique
144

…and makes the
and
competition irrelevant
145

Free chapter download 146

www.oxygen-consulting.co.uk
www oxygen-consulting co uk
147

Who is Ray Al
Wh i R Algar?
?
148

Questions
149