The new report’s primary purpose is to demonstrate how the low-cost sector is emerging internationally. It draws on some of the strategic analysis from the 2010 study; captures insights from current and past members of two low-cost U.K. club brands; and includes a series of interviews with club CEOs, as well as people working outside the fitness industry. The CEOs address strategic and operational issues, while the nonindustry sources provide a wider societal context.
DEFINING LOW-COST GYMS An authentic low-cost fitness facility—one with a strate- gic and all-encompassing approach—has the following characteristics:
Figure 1: Definition of a low-cost gym
The presence of these five characteristics has helped create a new and exciting consumer proposition that fundamentally disrupts the rules on which the industry was built. In some markets, it’s not always possible to obtain all five: e.g., laws may prohibit a 24-hour opening or require higher levels of staff supervision than that provided by remote surveillance via camera. However, these characteristics are present in essence. This means that, when an existing mid-market club with a wide range of amenities and services decides to reduce its membership fees to match those of a new low-cost opera- tion, it doesn’t, de facto, become a low-cost gym. It’s simply the same club with a different pricing strategy. This is because a low-cost strategy isn’t just about pricing—it also requires an all-embracing organizational philosophy.
A fundamental part of that philosophy involves a difficult decision about what is core to the business prop- osition and what is frivolous. It asks the question: What do we include, and what do we leave out? For example, when Rasmus Ingerslev, the CEO of Fresh Fitness, the low-cost Danish brand, was developing his concept, he strongly believed that group exercise had to be part of the consumer proposition. “If you leave out group exercise, I believe you lose comparability with more expensive club alternatives,” he explains. However, rather than looking to the established club industry for a solution, Ingerslev turned to technology to develop a virtual class program.
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ihrsa.org |
DECEMBER 2011 |
Club Business Internat ional 47
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