1.
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

2.
Themes we will explore
2

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

4.
Creating a strong purpose
versus short term
h
marketing campaigns
4

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

6.
Exploring companies
that customers l
h love
6

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

8.
Everywhere,
Everywhere
consumers face
more choice 8

9.
9

10.
10

11.
11

12.
12

13.
13

14.
14

15.
15

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

17.
UK G
Gym
Danish
Gym
17

18.
Consumers begin
C b i
to select on price
p
18

19.
So companies fight for
the lowest price
19

20.
€6.40
€6 40

21.
21

22.
Great
price for
S
Spanish
i h
members
22

23.
Time to focus
on
extraordinary
service?
23

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

25.
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

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

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

28.
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29.
29

30.
30

31.
31

32.
32

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

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

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

36.
Do clubs care?
36

37.
…yes, during the
y , g
tour 37

38.
‘the best salesman
the
ever’ 38

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

40.
…but after the
honeymoon period
40

41.
‘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

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

43.
Membership f
b hi factors:
87% negative
43

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

45.
Chandler wants
to l
leave the gym
h
45

46.
Friends video
46

47.
47

48.
Would you recommend this
club to your family and
friends?

49.
1 in 10 (10%) promoter rate
for 6 large club chains

50.
22% highest
chain
50

51.
7% l
% lowest
chain
51

52.
Little positive word of mouth
52

53.
€17/month
53

54.
€13/month

55.
Fit for Free €9 90/month
€9.90/month

56.
56

57.
Outdoor classes
58

58.
Outdoor gyms
59

59.
Home exercise
60

60.
Video gaming
61

61.
Online Health
Clubs
62

62.
Mobile personal
trainers
i
63

63.
Wearable activity
tracking
64

64.
65

65.
MiCoach by adidas
66

66.
So,
So the choice for clubs is
a remarkable service or
competing on price?
i i ?

67.
How fitness clubs
can fight back
68

68.
Clubs need a
strong purpose
69

69.
A strong purpose helps
your fitness b
fi brand to
d
become unique
70

70.
When you are unique and
valued, members
will pay more
71

71.
Coke & supermarket own
p
brand - €2.12 v €0.30
590% premium
72

72.
Cl b need to create real
Clubs dt t l
value for members
73

73.
Th challenge is for members
The h ll i f b
to feel a strong sense of
g
belonging and connection
74

74.
Members need to fall
in love with your club
75

75.
Football fans NEVER
switch clubs
76

76.
Porsche creates
passionate customers
77

77.
78

78.
What is your club’s
purpose?
79

79.
What are we as individuals
passionate about?
80

80.
What does your club
stand for?
81

81.
‘Stand for something, or fall
forstand for change
I anything’
Malcolm X
82

82.
Purpose goes deep
inside the company
83

83.
To organise the
world’s information
84

84.
‘The Body Shop ceased to be just
another trading b i
h di business. IIt
became a force for social change’
g
85

85.
A strong purpose
provides a compass
for your club
86

86.
C
Companies with a
i ith
strong purpose
gp p
87

87.
88

88.
Innocent smoothie
89

89.
A third space for
thi d f
connecting p p
g people
90

90.
91

91.
7,000,000
7 000 000
92

92.
93

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94

94.
Brands with a cause
B d ith
ou pe o
outperform their rivals
e as
95

95.
A small company can have
p y
a big and compelling
purpose
96

96.
Here’s two fitness
clubs with a purpose
that members love
97

97.
Gainesville Health &
Fitness Center
98

98.
Meet Joe Ci lli
Cirulli
99

99.
Joe s
Joe’s purpose
100

100.
To make Gainesville the
healthiest community in
America
101

101.
‘It was a 3 5 year project.
3.5 j t
We accomplished it in 2003’
p
102

102.
‘We then changed our
We
mission to keeping
Gainesville the healthiest
community in America‘
America
103

103.
‘To keep Gainesville healthy
p y
one business, one person,
one child at a time’
time
104

104.
Club has engaged 60%
of G i
f Gainesville’s workers
ill ’ k
105

105.
‘The hi d l
‘ h third place i
in
members lives’
members’ lives
106

106.
‘Extraordinary
Extraordinary
commitment to helping
people - a consistent level
of service that far exceeds
the
th ordinary’
di ’
107

107.
108

108.
‘We define integrity as always
We
doing the right thing even
when no one is looking’
h i l ki ’
109

109.
‘Members get results’
Members results
110

110.
Free eight week cancer
recovery programme
111

111.
Free childcare
112

112.
Gold
G ld well city
ll it
award 2003
113

113.
IHRSA i d t
industry
visionary award
y
114

114.
World fitness
centre 2001
115

115.
Members stay
on average 40
months
116

116.
Families have grown
up at Joe’s centre
’
117

117.
3 employees
have worked
with Joe for 31
y
years
118

118.
23,000
23 000 members
119

119.
Questions
120

120.
Here s
Here’s another fitness club
with a strong purpose
121

121.
Welcome to Eco Fit Brazil: Is
this the most environmentally
friendly fitness centre in
the world?
122

122.
123

123.
R d
Reduce, re-cycle and
l d
re-use philosophy
p p y
124

124.
Save water, materials from
renewable sources
125

125.
Solar power
126

126.
Ozone-treated pool to
reduce chemical use
127

127.
Organic philosophy
128

128.
More than a fitness club –
an environmental academy
i l d
129

129.
2,000 classes for the whole
family each month
130

130.
Works with Greenpeace,
Brazilian Institute for the
Defence of Nature & other
environmental charities
131

131.
Ecokids – environmental
awareness courses for
children
132

132.
Questions
133

133.
These clubs have a
clear purpose?
134

134.
They will leave a strong
legacy or history
135

135.
If these clubs closed today
they would b missed b
h ld be i d by
members?
136

136.
These members
will not leave for
another club
137

137.
Members LOVE
these clubs
138

138.
These clubs generate
g
an external buzz
139

139.
Members lives are
being improved
140

140.
Staff are passionate and
having fun
141

141.
Do not imitate these centres
… find your own purpose
142

142.
Get behind a strong
purpose NOT short term
marketing campaigns
143

143.
It helps you to become
valued b members
l d by b
and unique
144

144.
…and makes the
and
competition irrelevant
145

145.
Free chapter download 146

146.
www.oxygen-consulting.co.uk
www oxygen-consulting co uk
147

147.
Who is Ray Al
Wh i R Algar?
?
148

148.
Questions
149