TALKBACK everyone’s talking about . . .


the budget battle G


ym operators don’t need reminding that it’s tough out there. As if the recession wasn’t enough, operators


are now facing competition from gyms where weekly membership costs little more than a cappuccino. The health club industry isn’t the


fi rst sector to weather this storm. The hotel and airline industries have already experienced the arrival of low-cost operators – a trend that put pressure on existing operators but that represented great news for consumers, putting overseas travel and city breaks within the fi nancial reach of many more people.


Budget clubs claim that up to 40


per cent of their members are new to fi tness, which suggests they may be able to make inroads into the ‘harder to reach’ population groups. Indeed, énergie’s group brand and marketing director David Beattie says of the company’s budget franchise, Fit4less, that having a value brand above the door can attract many people who wouldn’t have considered joining a gym before. So if the consumer wants cheap


memberships, does this mean that mid- market and even premium gyms will have to drop their prices to compete? Is it even a viable business model for them to cut their membership price


WILL MEMBERSHIP PRICES KEEP FALLING? EMAIL US: HEALTHCLUB@LEISUREMEDIA.COM


tim baker touchstone partners • chair


“T


here’s plenty of room for good operators – I can’t think


of a market where budget operators have come in and all the standard and premium businesses have gone to the wall. Inevitably there will be a shake-up, but I don’t think health clubs should automatically respond by cutting prices. The most important point is for clubs


to know their market: not just the 5 per cent of more talkative members who stand around and chat, but the greater mass who don’t interact with staff so much. Clubs need this understanding so they can identify where they have added value and can build business. This can be done by surveys, discussions or staff touring the gym to assess how areas are used. The data can then be used to create more imaginative membership options, from swim-only to targeted packages such as marathon training or ‘fit for the kids’ (ie don’t get out of breath playing football with your kids). The growth of budget gyms is natural in a maturing market:


the health club industry is made up of lots of operators with similar offers and it’s ripe for entrepreneurs to shake it up. Although prices needn’t be dropped, health clubs must develop a pricing strategy based on members’ needs.


”


dominic rowsell hot rivet • managing director


“T


he challenge facing the health club industry has many parallels


with the technology sector over the last decade, with its cheap products from China. I believe the industry should hold firm on price, but operators do need to be definite about what they are selling, and this might mean a fundamental change in culture and structure.


I’ve created a model of four buying cultures, which I believe


could be applied to the fitness industry to help clubs tailor their offering to their audience, meaning they won’t need to cut prices. In this model, the first type of customer knows exactly what


they want and is swayed by brand. The second type understands what they want but needs a solution put to them – for example, they might want to run a marathon, and may need help with meeting this challenge. The third type wants general health improvement and will have a broad interest in wellbeing services. The fourth buying culture would make clubs accountable and is


the most challenging. This would involve entering an agreement with the customer to help them achieve specific goals, such as weight loss within a given time, with penalties and rewards on both sides depending on whether each party delivers.


” 30 Read Health Club Management online healthclubmanagement.co.uk/digital june 2011 © cybertrek 2011


kath hudson • journalist • health club management


How can premium and mid-market operators cope with competition from the budget chains? Does this herald a full price war, or simply a need for some savvy operating?


in half and aim for twice the number of members, or would cutting existing membership fees be fi nancial suicide, as well as cheapening the brand? Maybe operators could apply learnings


from the budget operators in terms of cost-cutting – automating administration, for example, with members joining, leaving and booking classes online. Or perhaps operators should hold


fi rm on price, offering more for their existing membership fees – a free monthly personal training session, for example, or a beefed-up class schedule – and focusing on their USPs, ie the elements of their offering that budget gyms don’t offer. We ask the experts.


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