The little black dress of fitness

It’s 7:20 a.m. and Carl Daikeler hasn’t worked out yet. Not a big deal for the 49% of Americans who don’t exercise regularly, but it’s going to bother him all day.

The problem is the CEO of Beachbody, the company behind P90X and Insanity, doesn’t like to work out. So much so that he sometimes has to “trick” himself into the gym. Like the time he decided he couldn’t brush his teeth before he worked out for at least 10 minutes. That little ploy inspired Beachbody’s 10-Minute Trainer program.

The fitness industry is constantly coming up with similar tricks to get more of us off the couch, Daikeler said.

The result is a rotation of incoming and outgoing trends — from Jane Fonda’s VHS tapes in the early ’80s to Beachbody’s DVD programs that are popular today.

Daikeler compares fitness to fashion. “Somebody starts wearing a certain shoe in Milan or Japan and suddenly everybody wants to wear it,” he said. “It doesn’t just solve the problem — like shoes cover your feet. It makes you feel like it’s (a part of) your identity.”

Starla Kay teaches youth video classes at the Indiana Black Expo in Indianapolis. She has a 19-month-old son and not a lot of time for a workout program that doesn’t work.

P90X has earned $420 million in sales for Beachbody since 2005.She tried kickboxing, aerobics and just going to the gym, but nothing really stuck until she got one of this year’s hot trends, P90X.

“This is the first actual program I’ve done,” she said. “I feel stronger. I feel like I have more energy. I’ve lost 9 pounds so far.”

The American College of Sports Medicine publishes a yearly survey of the top worldwide fitness trends. The top 10 list for 2011 includes boot camps and programs aimed at older adults.

Trends depend on many factors, said the survey’s lead author, Walt Thompson. Take Pilates, which dropped off the survey’s list from No. 9 last year. Thompson believes the economy made Pilates equipment and specialized instructors too expensive for clubs to maintain. He’s not sure if Pilates will make a return to the top 20, but he doesn’t expect a few of this year’s trends to stick around long.

“The problem with the high-intensity kind of programs is that they deliver a punch like severe weight loss programs do, but they’re difficult to comply with in the long haul,” he said.

A huge key… is to make people feel like ‘Wow, I get it.’

–IDEA editor-in-chief Sandy Todd Webster
Remember the slide board? Tae Bo? Step aerobics? All trends Houston, Texas, YMCA senior program director Karen Behrend has seen come and go in her 28 years of teaching group fitness.

“The reason why programs like that don’t stick is because they’re too hard to do,” she said. “The things that really stick are programs that cross over multiple (ability) levels.”

Kay said when she first attempted the P90X DVD program it was “too much” so she dropped it after two weeks. But when she started attending a class with an instructor who taught her how to modify the moves, she found herself returning six days a week at 7 a.m.

Behrend cites classes like Zumba, body pump and spinning as success stories. They’re consistent, easy to follow and include that always important element of fun.

“They make people feel successful,” IDEA Fitness Journal Editor-in-chief Sandy Todd Webster said. “That’s a huge key in good programming is to make people feel like ‘Wow, I get it.’ “

IDEA is the world’s largest association for fitness and wellness professionals. It also does a yearly survey of fitness trends. This year, aerobics, water fitness and martial arts-based classes had the largest decline in popularity. Dance and boot camp classes showed the largest growth.

Judi Sheppard Missett, right center, continues to choreograph all the routines for Jazzercise.”Think Jazzercise classes — they’re fun. They combine good music, easy choreography (and) social aspects,” Webster said.

Jazzercise is one of those trends that stuck. Judi Sheppard Missett founded the company in 1969 and the dance-based classes are still popular across the world. In fact, Entrepreneur Magazine recently named Jazzercise 2011’s most successful fitness franchise.

“It’s not like you can take a six-week course and be fit the rest of your life,” Missett said. “It’s really good that people are coming up with different ways to move. I’m happy for anybody doing anything, anything that gets them off the couch and on their feet.”

She continues to choreograph routines to approximately 30 new songs every 10 weeks to keep her high member retention rate.

It is the beauty and curse of the industry, Behrend said. Old trends evolve into new ones, forcing gyms to stay cutting edge, but keeping customers excited about working out.

“The trick only lasts so long,” Daikeler said, going back to his fashion analogy. “The best designers aren’t looking for trends; the best designers set the trends. Will this capture a market audience or is this like Lady Gaga’s meat dress?”

Daikeler said he just hopes whatever the industry comes up with next is the end of the biggest trend in America right now: obesity.

Increasing Customer Retention at Health Clubs with Predictive Analytics

A major problem in the health club industry is customer retention – it may well be the industry’s single largest issue. Hence the constant aggressive push to get members signed up and in the front door, at a rate faster than they are exiting out the back door. I have seen figures showing that as many as 40% of members churn in the average health club, regardless of the exact numbers, it is a known fact in the industry that it is a higher number than any health club manager wants it to be; and obviously any reduction adds directly to the club’s bottom line.

Equally plenty of members renew their memberships year in, year out. Accordingly, any member retention strategy should involve two key components: 1) identifying those members at risk of leaving and 2) targeting those at risk with appropriate interventions.

It is beyond the scope of this article to go into intervention methods. However, I will address the identification of members at risk of terminating their memberships (‘at risk’ members) – and how predictive analytics can be applied to help with this.

Like all businesses health clubs have limited resources, and it is absolutely pointless for a club to invest resources to try and retain each and every member, when a good deal of them are not at risk in the first place. If a member is identified as ‘at risk’ there is a strong business case to be built around investing resources in trying to retain that specific member (theoretically you could afford to invest up to $1 less than the cost of acquiring a new member, and still be ahead of the game), conversely if they are not ‘at risk’ and are going to re-sign anyway, you may just as well burn the money as hand it over to that specific individual in the form of an incentive or time invested.

The other consideration is, it is far easier to pro-actively try to retain 2,000 members than 4,000 member, so by segmenting, and making the size of the task more manageable, it increases the likelihood that a health club will do something – and if we know nothing else, we know that doing something is usually better than doing nothing.

So we have a clear business case for identifying which members are most at risk of churning. Our next mission then, would be to take our database of current members and identify which ones specifically are ‘at risk’ and which ones are ‘loyal’. Ideally we would take it one step further than this, and be able to rank our whole customer database in rank order from those statistically ‘most at risk’ to those ‘least at risk’. The benefit of doing this, is that it provides our sales/retention staff with a sequenced work list, which they would start at the top of and work their way down sequentially. This simple act in itself would give us comfort that our resources are being focused on those that most require them – a form of retention triage if you will. This can even be taken one step further, and we can – again using statistical methods – determine the statistically optimal place in the list to stop.

Though we have a business case, and a reasonably clear vision of what would be useful, the problem is that for the managers of most health clubs, the scenario outlined above is closer to science fiction, than something they perceive they can practically deploy within their club. So the status quo prevails: 1) do nothing, 2) treat all customers as equally at risk, or 3) perform some random haphazard interventions with no real science behind who is targeted and who is not.

So to get to the point of execution, and movement from theory to reality, let’s discuss how we would take this utopian vision and turn it into an actionable reality. Ironically for many health clubs this vision can be actualized faster than it took me to write this article – literally.

Most health clubs have a reasonable amount of data on their members. Let’s imagine that we have all the data about every member of our club for the last five years, lined up in an Excel spreadsheet. Every row is a unique member, every column is the information we know about that member. The columns we call input columns as they are the inputs that help us make our prediction about that persons future behaviour, these would contain things such as: her age, her marital status, change of marital status, # of visits in January 2010, number of visits in January 2009, etc. payment method, # of address changes, average time she spends in health club, etc, etc it would be no problem to have 100 or even 500 columns, and in the very last column (our target column) we add a label ‘loyal’ or ‘at risk’. Anybody that terminated their membership previously is labeled ‘at risk’ and ‘anybody’ who re-signed is labeled as ‘loyal’. We would eliminate from the spreadsheet anyone who had not had been with us a year yet, as we don’t have any conclusive information about their behaviours.

Now I will skip over the math here, which nobody would want to try at home, but you can take it on good authority that there are patterns within all the input columns that can help to predict the customers propensity to churn. This is as you would well expect, for example prior to terminating a membership, a member may start coming in less frequently, and if this data is recorded this would show up, or a change in marital status may impact an individuals propensity to re-sign, and most likely it is an aggregation of many factors. Typically a human cannot detect these patterns, but there are software applications that can, and once the patterns are defined, the software can look at the patterns in an unseen group of members and make a prediction as to each individuals propensity to churn, and then output these members in a sequenced list as described previously, complete with the optimal point in the list to stop making interventions.

To explain it a slightly different way, we are: 1) consolidating historical data about behaviours that we think may be correlated to an individual churning from historical members 2) we are letting software examine that data for patterns and how they relate to how a member churned or did not 3) that relationship is frozen in a ‘predictive model’, and finally 4) the model is applied to unseen members to statistically predict their behaviour (vis a vis churning or not).

I would encourage anybody interested to visit www.11AntsAnalytics.com and watch the 11Ants Model Builder QuickStart tutorial video, which will better show the process (the data is different, but it won’t require much imagination for it all to make perfect sense). Feel free to email me if you have questions about this – doing this sort of thing is ten times easier than most people imagine.

What Does The President Look for in a Gym?

What was it about the Washington Sports Club brand that prompted Barack Obama to choose to join its clubs over all others when he came to Washington after his election to the U.S. Senate in 2004?

No doubt, the brand, marketing, and advertising relayed an important message to Obama, now the 44th President of the United States: ‘this fitness club has what you need and we can offer it to you in a convenient manner at an acceptable price.’

No need for high pressure sales here. Senator Obama found what he was looking for and signed up.

Wouldn’t you like your branding/marketing/sales effort to be this effective?

Of course! It is hardly an overstatement to say that sales and marketing are the lifeblood of your health and fitness club. To keep your business healthy, you need to keep a constant flow of new members joining to grow your membership while replacing any who leave because they move away or change jobs.

Stephen J. Tharrett and James A. Peterson authors of Fitness Management (Healthy Learning, 2006) estimate that, to be successful, most clubs have to sell between 800 and 1,300 memberships on an annual basis. Larger clubs need to recruit as many as 5,000 new members each year.

Positioning is key
Branding, marketing and advertising help to create and nurture relationships with consumers in your community who are contemplating lifestyle changes, or, like Obama, want to keep up the good work. This is your reservoir of sales leads, people you hope will take the next step—tour your club as a prospective member.

To encourage people to walk through your door, you need to position your business to differentiate it from other clubs with strong branding.

Are you a new, no-frills Planet Fitness franchisor offering a special, one-year, prepaid membership for just $99? Or, is your club part of a well-known mid-range chain, such as the Washington Sports Club, with facilities clustered near home and office. Or, are you, like the Sports Club /LA, known for luxury?

Mere mention of brand names like these and others like Gold’s, Crunch, Lifetime Fitness, East Bank and 24-Hour Fitness communicate to consumers what the club stands for and will deliver for the price of a membership.

Paving the way for sales
Marketing and advertising—whether they utilize print, radio, television, direct mail or the Internet and email—need to be ongoing and relentless to generate the number of leads and prospects you’ll need to meet your sales goals.

As Tharrett and Peterson point out, sales is quite the numbers game. “While the percentages tend to vary from market to market and club to club, the average club can expect to convert 20% to 50% of its leads to prospects, and 20% to 80% of its prospects to actual members.”

It is up to your sales staff to identify what prospects are looking for, and communicate well how your facility, your programs and your staff will satisfy those needs—and close the sale.

Ben Midgely, who once served as team director of corporate sales at 24-Hour Fitness, and is now executive vice president of Planet Fitness, says that hiring sales people with passion is vital.

“You can’t teach passion, you have to find it. Look for people who are committed to fitness, and who care enough to want to spread the good word about its benefits, and help others succeed. If you focus on the member first, rather than the money, the money will follow.”

Q: “What is the standard closing rate of sales in the fitness industry?”

A: Closing rates will be different for different sales staff and different clubs. My best sales person closes 73 percent of all prospects. New sales staff with little experience can be lucky to close 30 percent. The average for all staff across all clubs is 53%. Clubs with highly trained sales staff and low staff turnover will maintain closing rates of over 70 percent.

Of course, you also need to look at total monthly sales. A sales person that does very little prospecting and only sees highly qualified walk-ins will tend to have a higher closing rate than a sales person who is actively involved in prospecting. In other words, selling 50 percent of 100 prospects is better than 80 percent of 20 walk-ins.

Also, clubs sometimes pick their closing rates out of the sky. The only way you can get accurate closing rates is if you have a 100 percent fail-safe system of recording all tours, walk-ins, and guests. I once looked at a club claiming 85 percent closing rates but they were not including guest passes. They were getting approximately 140 people on guest passes every month. When these were included their closing rates were only 36 percent.

A: A membership consultant’s “hit rate” will never be as good as it could be as long as it is referred to as just that… a “hit rate”. Members aren’t units, points or numbers, they’re people and each has a story and a reason for coming to us and the best consultants assume every single guest has a need to fill and consequently has come to join. We change people lives every day through fitness and as consultants our job is to remove all barriers and causes for hesitation, more often than not in people who have already gone through several stages of consideration before visiting a club.

It’s a competitive world and true to say not everyone who visits will join your club. Many factors will influence their final decision, so the ultimate percentage of those who join can vary from club to club, however globally I can say we at Face2Face aim to average in the high 60’s. I see many clubs claim much higher but often investigation reveals not all guests are counted as “prospects,” skewing their true conversion and indeed limiting their success.

Paul Brown

Tips to Attracting New Customers with Direct Mail

 

Fitness Marketing ……The best use for direct mail, especially in fitness, is to get current customers to keep coming back and spending more.  That said, businesses need a marketing strategy for attracting new customers. Here are 4 great tips to making direct mail work:

The Smaller Your Trade Area, The More Direct Mail Works. Typically direct mail works on a smaller scale than traditional media like TV, Radio or Print. My instinct is that the number is about 20,000 households.   You can enter the geography that corresponds to your trade area, then the demographics of your targeted customer.    A few things to keep in mind: Don’t over estimate your geography; the longer the travel time, the less likely people are to shop your business. Don’t over estimate your demographics; be honest about the likelihood of attracting people in age, income or gender groups that normally don’t shop your business.

Provide An Offer, But Also An Event. After the mailing list, the offer is the biggest driver of direct mail success. You always want a great offer to get customers to respond, but you also don’t want to look like a chronic discounter.  Overall discounting lessens the perceived quality of your product or service. To counter balance the perception of discounting, you should try to wrap your offer in an event. Events can simply include holidays like Christmas or Labor Day, community events like Crazy Days or Open House, or trade events .  The best events can be the ones you develop yourself like a guest celebrity appearance, a charity event, or a themed community event. The more you can wrap your sale or offer into an event, the less you need to discount, and the more you protect your core pricing and perceived product quality.

It Takes 7 Impressions to Make a Sale.  The rule of thumb in marketing is that on average a new customer will have been exposed to you brand 7 times. There is also research that shows that the more a person sees your brand, the more that person thinks favorably about your brand. So frequency matters. If you don’t “touch” your targeted customer continually over time, your marketing won’t reach it’s maximum effectiveness.  With direct mail as well as other media, you should have a plan in place to touch the same people multiple times throughout the year. A good rule of thumb for direct mail is 4 times per year. Other impressions can come from other types of media, but also word-of-mouth, drive-bys of a retail location, or public relations campaigns. Lastly, avoid using too many media types. If you try direct mail, then print, then radio, you will tend to make single impressions on many people, but not frequent impressions on the same people; you never get to the 7 impressions.

Test for an Ongoing Marketing System. The goal with any marketing is to develop “marketing systems” that you can put into your annual marketing budget and use over and over again. A marketing system is one that has been proven to have good results and an acceptable return on investment. To get there you need to measure and test. Direct mail is usually the easiest of the media types to test; you mail out and measure the response. A few things to keep in mind: To be statistically relevant the test needs to be large enough. A rule of thumb is to mail at least 10,000 pieces, 15,000 is better. Not all new customers will bring in the offer on a direct mail piece; some people don’t like bringing in coupons and some simply forget. Finally, remember that frequency matters. If you can get a reasonable response with a first test, subsequent mailings will only get better. Kurt Post Card Builder

Call Fitness Life Marketing 1-888-541-0714  for help designing a great marketing camapign for your club.

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