Growing membership and profit and 8 keys of gfm existing clubs

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Health & Fitness facility attendance has
become the biggest adult ‘sport’ in the
Western world.
Bigger than football, tennis and golf
combined …
We thought all stars we aligned for further
growth…
US Adult Fitness Club Participation

• Membership retention is the largest problem facing our industry today
• Based on commodities and lacking the excitement and social
engagement of sports - We behaved more as gyms than as true health
clubs.
• Competitive industries are evolving faster than us, eg:
• Virtual exercise
• New sports
• Nutritional science
• Medicine
• Stagnating industry - Segmentation rather than innovations – The
industry has started to turn into itself – we are fighting for the same
customers instead of innovating to attract new ones (Budget clubs;
micro Gyms)

 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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Many operators focus solely on sales and profit. Sophisticated clubs and recreation
centers add membership numbers and retention statistics. These are valid but BUT
can not guide management decisions –We need to manage using leading
measures which predict what the outcomes will be.
There is one number that has a more powerful effect on success than any of the
others, that influences everything else: Member attendance.
Regular attendees renew their memberships, refer their friends and promote their
clubs at staggering rates when compared to members who pay but seldom use their
gyms.

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.

LES MILLS INTERNATIONAL© 2011
Design a high-energy workout environment
Create a relationship selling and new
member induction system
Recruit a team of great personal and small
group trainers
Build a ‘club within a club’ system for
sports and other activities
Develop a member education and social
network communication system

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 78% say room to exercise is extremely/very important!
 60% say the ambience of the room is extremely/very important

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From Hard/Transactional selling to Relationship Selling to Educative
Selling:
Shifting the MCs’ focus on providing relevant ‘solutions’ for a healthier
and happier lifestyle – not selling a gym membership
 People join to get results and motivation but they stay because they
make friends - The Membership Consultant (MC) can be the first
powerful relationship…
 People research and buy online more and more
 We need to be more than the low-budget club – MCs need to bring
additional value to online buying
35

 MCs to become Membership Coaches responsible for setting up the new
member for success
– 24 Hour Fitness
–80% of prospects have been member of a gym before…
–No sales commission since last year
–They have cut from 12 sales consultant to 5 membership coaches
per centre
–Prices has increased and January 2012 has seen the highest
number of sales ever
36

 MCs to become Membership Coaches responsible for setting up the new
member for success
– LMNZ
–Shifted from hard selling to relationship selling in 2005
–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.
–They are responsible and accountable for new member attendance
in first 3 months (21 visits)
 Recruiting and training MCs properly so they can deliver educative sales
pitch and prescribe holistic fitness prescription and relevant exercise
recommendations based on the customers’ needs
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Going the extra mile…
 LMNZ – 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…
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LMNZ - Improve the lives of New Zealanders
 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 salespeople
– 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
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 Implement a 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.
“Every year, the industry sells millions of memberships to men and women who, though
they earnestly wish that they could become regular exercisers, have not yet developed
the discipline or habit of regular exercise.”
IHRSA Guide to Retention 2007
“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
STATS ON LENGTH OF MEMBERSHIP WHEN USAGE IS HIGHER THAN TWICE WEEKLY IN FIRST FEW MONTHS
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LMNZ - Goal: 21 visits in 3 months
• Induction process with regular and specific
points of contact
• MCs are responsible for it (about 30% of their
commission)
• they sell the dream; they make sure the dream
happens!
• Tracks every new member over 84 days and
visits at 14, 42 and 84 days
21 visits

LMNZ: 21 visits in 84 days
 Result: 50% of members achieving the 21 in 3 months (Goal is: 65%)
 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!
 Proven to be very successful in increasing new member usage,
maintaining member motivation by discussing exercise progression and
driving referrals earlier and more often
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• Create a personal
relationship with
your members

Social media is revolutionizing
our ability to communicate!
But… it’s not as easy as it looks.
Engagement, interest and
authenticity are key.
Otherwise it’s meaningless…

Health clubs need to become
more than just places where
people go to use exercise
machines!
We need to become true providers
of holistic health. Education
changes lives and your members
will love you for it.

 Lifestyle Family Fitness (Florida)
teen fitness initiative
– FREE 2-Month Summer
Membership
– Teens can utilize all equipment
and participate in Group
Exercise classes
– Hourly restrictions in place
(ie non-prime time)
– Remember… teens have parents
and they grow up to become
paying adults
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Freelance
Programmes
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 A great way to increase the quality of
on-boarding, results and connection
(member to staff)
 Can be a good source of revenue
 Increase income opportunities and career
opportunities for GX instructors
 However:
– Even the best facilities in the world have less than
10% of members using PT on a regular basis vs
50%+ in GX
– Connection is with a single staff member: if the
member is unhappy with the PT or if the PT leaves,
you could lose the member
– No prescription of other form of exercise such as
GX (which is more social and more holistic)
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 Currently the holy grail of the
industry
 Everybody wants successful SGT
programs
– Allows more people access to PT
– Increases $ per hour for PTs
– Builds relationships between members…
They make good friends.
– Brings back the spirit of sports teams
 Challenges:
– Best facilities only have 3 or 4% of
their members doing SGT
– As yet, no one has really made it
successful
63

“

• 90% of all exercisers report that they would prefer to work out in a group.1
• 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.

Group Exercise attracts and motivates the
masses.
Some of the world’s most successful facilities
have over 50% of their attendances in GX.
“Group Exercise members attend more
regularly, remain members for longer, make
more referrals, perceive greater value in their
memberships (ie will pay more) and do not
leave when a budget gym opens nearby!”1
1. Will Phillips, The Retention Breakthrough

 Many facilities worldwide are
being hurt by low-budget
competitors.
 At the same time, there are
successful new fitness models
emerging (micro gyms) eg:
• 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
68

• Independent research shows that LES MILLS™ licensed facilities have
500 more members per facility than the global average.1
• Average Group Exercise attendance at LES MILLS™ licensed facilities
is 33%, with top performers above 50%.1
• LES MILLS™ class participants visit their facility at least twice as
often as the average member: 3.1 to 3.7 times per week vs 1.2 to
1.9 visits per week.2
• 71.8% of LES MILLS™ participants say they intend to still be a
member of their fitness facility in 12 months’ time.3
• 95% of LES MILLS™ participants would recommend
LES MILLS™ programs to their friends and family.3
1. Scoreboard global survey 2011
2. Nielsen (2010); IHRSA (2011)
3. IHRSA (2009)

One Tribe
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1. Weekly GF attendance
2. % club Visits delivered by GF
3. Average attendance per class
4. Individual class performance:
• Class rankings
• Option: Cost per head
5. Program performance (program rankings)

One Tribe
• Prospects and members usually need
three types of training to cover their
basic needs
• Make sure you have at least one great
program you can recommend
BLINDLY in terms of quality,
experience and consistency in each of
these categories:
– Strength toning
– Cardio
– Mind-body stretch

One TribeOne Tribe – Changing the World Les Mills International © 2010
Source: AC Nielsen Research

One Tribe
AKL CENTRAL REPORT
Program Actual
%age of
total weekly
No. of
classes per
week
Average
class size
BODYPUMP™ 2132 26% 28 76
RPM™ 1352 16% 30 45
BODYCOMBAT™ 1067 13% 16 67
BODYATTACK™ 743 9% 10 74
BODYJAM™ 671 8% 8 84
BODYBALANCE™/
BODYFLOW® 606 7% 13 47
CIRCUIT 475 6% 13 37
BODYSTEP™ 456 6% 9 51
YOGA 342 4% 7 49
STEPPUMP 99 1% 2 50
IMPACT 96 1% 6 16
RUN 90 1% 3 30
BODYVIVE™ 70 1% 4 18
WALK 37 0% 6 6
BOM 13 0% 1 13
TOTAL 8249 100% 156 53
One Tribe – Changing the World Les Mills International © 2010

One Tribe
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RECRUIT
Les Mills Inter national Limited © Issued 13.07.2011

One Tribe – Changing the World Les Mills International © 2010One Tribe – Changing the World Les Mills International © 2010
Source: AC Nielsen Research

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– Changing the World Les Mills International © 2010One Tribe
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One Tribe – Changing the World Les Mills International © 2010One Tribe – Changing the World Les Mills International © 2010One Tribe – Changing the World Les Mills International © 2010
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1. Launching program(s)
2. Re-launch events
3. Ongoing promotion on the benefits of GX
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 Massive BUZZ and interest in club during the 2 weeks building up to event
 Full focus from club team on common goals and interaction between sales,
customer experience and product departments – ‘Breaking down silos’
 Sold-out events and massive energy in clubs – all classes at 80 to 100% capacity
 Attendance: 5 to 10% membership
 20% guests per class
 50 to 70% conversion rate of guests
 Massive buzz post-event
 An increase of attendance in 2 to 3 weeks post-event of 10 to 20%
128

The LES MILLS™ Group Fitness
solution gives you free access to a
huge collection of valuable
marketing and promotional
resources. We are continually
working on new ways to help you
inspire your members and
prospects. Currently we’re
developing online tools, which will
allow you to customize material with
your own club logos and messages.

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Reporting month July-08
Name of facility Club Fabuloso
Overall goal: To grow GF attendances by 25% in 12 months
Actual attendance trends Last MONTH
Current
month
Increase/
decrease
Comment
Actual attendances 4850 4900 50 Small increase month-to-month despite school holidays
Monthly Budget Actual Variance Comment
Total monthly costs
4,500 4,300 200 Savings mainly due to gifts being supplied for free for
monthly promotion due to local company sponsorship
Attendances
5,000 4,900 (100)
School holidays impacted attendances more than expected
GF visit/Total visits Actual GF visits Total Visits Percentage Comment
For July
4,900 12,000 41% Substantial proportion of members attend GF

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 WHY should your staff care about your
business and challenge themselves
every day?
 People need to be engaged in an
inspiring and meaningful purpose…
152

 “We are warriors in the battle against
inactivity and over-consumption.”
LMI Instructor Creed, 1998
 “Creating life-changing experiences every
time, everywhere. One class at a time,
one participant at a time.”
AIM manual
 “You have to find a way to make people
fall in love with fitness.”
Les Mills, 1968
153

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 and 8 keys of gfm existing clubs

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