Gemba shares new views on fitness industry retention

Craig Roberts and Luke Davis of international strategists The Gemba Group have applied their sport and entertainment insight skills to the fitness industry, looking at the constant challenge of retaining members.

Assessing the findings of The Fitness Industry Retention Report, released earlier this year by Life Fitness Australia and Fitness Australia, the pair saw that, with just 63% of all members retained each year, simply maintaining membership revenue - let alone growing - is a constant battle.

With 48% of gym members in Australia giving up their membership within the first year (and with that churn highest among younger gym members aged between 16 to 34 years), Roberts and Davis saw how, across all age groups, cost is rated as the number one barrier to gym membership.

A requirement to commit as a member is the second-most cited barrier to gym participation – hence the emergence of lower-commitment pay-as-you-go models. (Inevitably these models may work against retention, but membership models that ‘lock consumers in’ create a disincentive to sign up in the first place.)

Attracting and Retaining Young Gym-Goers
Significantly though, younger people rate ‘not having anyone to participate with’ is a much more powerful barrier to gym membership than among older people, rating it as the third most important factor after cost and commitment.

Clearly, creating a social experience within and around the gym membership could be an important aspect of attracting and retaining this younger segment. This has certainly worked in endurance events, the creation of ‘tribes’ being a key factor in the success of the Tough Mudder movement.
For those younger people that are gym-goers, participation in other activities is heavily geared towards fitness activities – swimming, group exercise, hiking, running and yoga, with much lower overlap into organised sports. For most, gym workouts appear to be about general fitness and health, rather than complementing specific training programs aligned to participation in sports such as basketball, football, AFL, rugby or cricket.

This suggests two potential opportunities: can gym membership expand to incorporate more of the general fitness and leisure activities that young gym goers participate in – both within (e.g. swimming, yoga, dance) or outside the gym environment (running, cycling or hiking groups)? And can gyms and fitness clubs position themselves better as complements to team-based sport training programs, either in the off-season or pre-season, or as part of in-season cross-training or injury recovery?

Entertain Me!
But perhaps the most disruptive insight from our consumer research is that this younger segment has higher passion for entertainment experiences than for fitness or sporting pursuits. Although almost 60% of young Australian gym-goers say they are passionate about gym workouts, its movies and music that are the most widely-held passions among Australian 16 to 34 year olds.

Furthermore, and unsurprisingly, gym goers in the 16 to 34 age bracket are avid users of digital entertainment platforms.

Does this suggest an untapped opportunity to combine elements of entertainment and digital engagement with gym membership to attract and retain young people? (Think bundled movies or music streaming services included with gym membership, as one simple example.)

The retention problem is not new. Football and golf clubs have been wrestling with it, and have leveraged emotional connection, exclusivity, loyalty and social status to reduce churn.

For the fitness industry, in an era of hyper-competition for consumers’ attention, time and cash, some creative innovation may be required. Virgin Active Health Clubs, for example, have brought a youthful brand, a sense of exclusive ‘club’ membership, a variety of activities and services, plus entertainment elements to the market.

But can gyms re imagine their offer for a new generation that enjoys fitness but hungers for even more social, entertaining and fun experiences? Flexible, low-commitment offers that deliver a strong social experience at the gym, touching on multiple fitness genres and building in links to broader entertainment passions of younger gym-goers may point to the way forward in reducing member churn.

Some questions for Fitness Industry executives on retaining young gym-goers:

• How can we create even more flexible, lower commitment products that alleviate barriers for the 16 to 34 segment?
• How can we create products that deliver a strong social experience at the gym, to attract and retain this segment?
• How can we incorporate multiple fitness genres within our facility, to increase engagement and keep young people coming back?
• Can we partner with the entertainment industry to deliver additional benefits as part of membership packages?
• How can we deliver an engaging digital experience to supplement physical participation in the gym?
• How can we create a more ‘sticky’ proposition by delivering intangible benefits offered by other member-based organisations (such as AFL clubs or golf clubs)? 

Craig Roberts is Head of Strategy Asia Pacific and Luke Davis is Divisional Manager – Strategy at The Gemba Group.

Gemba offers world-class insights, strategy and marketing communications to the global sport and entertainment industry.

The Fitness Industry Retention Report, compiled by fitness retention academic Dr Paul Bedford, is available from lfeducation.org/industryreport

A fuller version of this article was published in the July/August 2017 issue of Australasian Leisure Management.

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