Last week I read an interesting NY Times article written by Catherine Saint Louis “Full Service Gyms Feel a Bit Flabby”. She discussed a recent trend impacting the fitness industry, particularly the challenges facing traditional full service gyms that offer everything to everyone. A dynamic shift is taking shape. Traditional marketing strategies of selling memberships to offset attrition are no longer working. In fact, while larger gyms offering the traditional array of machines and equipment are still popular, a large segment of the market is gravitating towards smaller facilities offering a combination of both personal training, group personal training and group exercise programs. While there is room for traditional full service facilities, the market is gravitating towards smaller fitness centers offering specialized services and more personal attention.
Here are a few interesting stats I heard from a recent NFBA seminar.
- There are approximately 40,000 fitness centers in the United States
- Approximately 1,500 new clubs open on a quarterly basis
That’s seems to be a pretty ambitious expansion, however, according to International Health, Racquet & Sportsclub Association only 15% of the United States population … yes 15% belong to a fitness center. This indicates that despite the rapid expansion, there appears to be room for growth in the fitness industry.
What does this all mean?
So if you’re considering an investment into a fitness business, there is cause for optimism if you can capture a small percentage of the remaining 85% who don’t belong to a fitness club. But before you do, take note of another important statistic:
It’s estimated that 45% of those who sign a membership will quit. That’s not an encouraging sign for both club owners as well as people who want to get in better shape. That type of attrition increases marketing costs for business and has the added impact of discouraging would-be members from even trying a membership.
This begs the question… Why do so many quit? What’s missing?
According to the article people are looking for both Socialization and Connection. This is particularly important for those who have never exercised on a regular basis. Five or six years ago, when fitness centers faced member attrition the solution was simple: if you lose members, simply sell more memberships. The problem is that strategy is no longer working.
Think about it…
You walk into a gym for the first time. You don’t know what to do; you’re surrounded by hundreds of people you don’t know. This can be a little intimidating to say the least. Instead of seeking help you start to exercise… in time when the results are slow to come by, you’re alone, it becomes tedious and you quit.
This is where the personal attention from a small club can help. In fact, having a connection with both the gym staff as well as other members adds the element of camaraderie and support. The article noted how fitness pioneer Jack LaLanne emphasized the importance of the social element to exercise as a “huge piece to getting participation.” This is what the market needs and can likely be a key element towards capturing the 85% of people who are looking to get into shape but need that little something extra to keep them going.
Additional benefits to smaller clubs and group fitness…
- Motivation – Working in smaller environment with people you know will get you to push yourself
- Instruction – Don’t waste time trying to teach yourself, it can lead to poor results and possible injury
- Education – It’s not just about doing the exercise. 80% of getting in shape is not just the workout, but what you do during the day. Things like diet, recovery time, and avoiding overtraining.
- It’s Fun – Working in a smaller environment with people you know is fun. It makes your routine less of a chore and becomes something to look forward to.
A captive market…
While the market is gravitating towards smaller studios, this does not mean the larger full service clubs don’t have a place. There are many people perfectly happy to do things on there own. There is also a segment that doesn’t want the experience and is simply focused on finding the lowest cost provider. Over the last few decades, despite new equipment, techniques and millions of marketing dollars, there is still 85% of the market left to capture.
Those clubs that focus LESS on the features, techniques, and MORE on personal attention and socialization may just be on to something.