TALKBACK


Kath Hudson • Journalist • Health Club Management EVERYONE’S TALKING ABOUT . . . DISCOUNTING D


uncan Bannatyne caused a bit of a furore in his recent book, Riding the


Storm, when he claimed that discounting at some of his health clubs had brought in ‘problem members’. Bannatyne said that dropping


Discounting might be good for the short- term bottom line, but Duncan Bannatyne believes it attracts ‘problem members’, changing the feel of a club. So it is worth it?


the monthly fees from £42 to £29 had devalued the brand and changed the atmosphere at the clubs. “More and more, people are trying it on, trying to sneak in a friend without paying, or making complaints in the hope of getting money back,” he said. He added that his son-in-law, who’s


one of his club managers, thinks his club no longer feels like a Bannatyne and is concerned about what long-time members might think.


However, Bannatyne also said that


– although he was concerned that the discount was devaluing the brand – if the company didn’t adopt a strategy of discounting, it faced losing money by losing members or prospects to other clubs. Dropping the price had led to thousands of extra members, he observed. So is that a trade-off worth making,


or do clubs risk losing previously happy members – put off by the change in atmosphere in the club – as fast as


they gain their new infl ux of ‘problem members’? Isn’t it also unfair on existing


members if they have to keep paying the old price? On the other hand, if their fee is also discounted, does the discount lose its marketing impact? In the current economic


climate, discounting can certainly make health clubs affordable to many more people who would greatly appreciate being able to join, and who would be valued members. But is this always the case? Does discounting bring problem members? Does it devalue the brand? Are there rules to follow to make it effective? Or should the industry be looking at different ways to boost membership and ensure existing prices are good value? We ask the experts....


DOES DISCOUNTING ATTRACT ‘PROBLEM MEMBERS’? EMAIL US: HEALTHCLUB@LEISUREMEDIA.COM


DR PAUL BEDFORD Retention Guru • Research director


“I


don’t think it’s unusual for clubs to have problems with discounted


members. One of my clients had the same issue after dropping its membership price to compete with budget gyms. It destroyed the business: they had problems with drug dealing, violence between members and towards staff, profanity and a lack of respect for the facilities. They tried to get round the problem by raising the prices again after a year, to move the discounted members on, but by this time they found that most of their original members had left. Discounting can work if it’s for a particular reason, such as


a discount on the joining fee, or for a limited period of time. However, if a club does this to bring in new members, it needs to do something to reward its longstanding members. Many gym members I interview know they can negotiate


a discount on the joining fee if they threaten to join another club, or if they come at the end of the month. However, they would prefer that it wasn’t a game and that there was greater transparency. For a long time, the industry has been able to charge more money than the value of its product: facilities and services have been provided, but not support. The focus needs to be on getting both the product and the price right.


”


TIM BAKER Touchstone Partners • Chair


“I


have never heard that discounting attracts the wrong sort of member.


I don’t know why joining on a discount should make people more inclined to sneak people in or complain. If anything, I would have thought those paying higher prices would be more inclined to complain. Discounting is a good way of boosting memberships:


discounting on the first few months can encourage people to join, and offering cheaper memberships if they come at allocated times can bring the club within the price range of more people. This doesn’t mean they will cause trouble. However, if gyms are finding they have to discount in order


to attract members, it’s probably because they’re not offering the right product for the catchment. The maturation of the market into no frills low-cost gyms versus full-service premium clubs means there’s now less need to discount. The most important thing is for the gym to get the product


right for the community it serves. Clubs need to make sure they offer value for money and treat members well. Members are far less likely to take advantage of a club that treats them well and makes an effort to know them. If sneaking guests in is a problem, why not offer cheap guest tickets or passes?


” 36 Read Health Club Management online at healthclubmanagement.co.uk/digital January 2014 © Cybertrek 2014


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