RESEARCH ROUND-UP Memberships sold as deals, such as
three- or nine-month contracts, have no discernible effect on 12-month retention rates. In fact, members who have contracts from two to fi ve months’ and six to 11 months’ duration are between 50 and 80 per cent more likely to quit at 12 months. Private sector clubs sell 48–55 per
cent of their memberships as 12-month contracts, compared to 7–15 per cent in the public sector. This may account for a retention rate of 57 per cent in the private sector and 47 per cent in the public sector at 12 months. However, as most 12-month contracts switch to a month-by-month agreement at the end of the 12-month period, this difference in retention rates disappears around month 18.
Blurring of boundaries Over the four years of the study (2009– 2012), it was evident the monthly fee charged by all operators is decreasing. As a result, while many operators describe how they manage their business by a descriptive term (low-cost, mid-market, premium), it’s not possible to gain consensus on what these terms mean. A low-cost operator may charge less than £20 a month, but so might a public sector facility due to its location and population, or indeed an independent private club. That doesn’t mean it’s low-cost or budget – it’s just the price it charges. Interestingly though, the members
interviewed for the Black Report indicated that this general lowering of fees had led
them to believe they could negotiate good deals and wait for sale periods before committing to membership. The quality of facilities within the
fi tness market continues to improve, and it has become more diffi cult for the public to distinguish between public and private operators. The Mosaic profi les of members across the fi ve sectors covered by our study – private chains, independent operators, trusts, local authorities and privately managed leisure facilities – now have no distinguishable differences, which suggests that people who were once only likely to join private health club chains are now just as likely to join public sector facilities. However, when the hotel groups
are separated from the health club chains, we can see that hotels and independent health clubs do better at retaining members than the larger branded companies. Hotels could begin to dominate the £45–60 a month price range, as they are able to provide all the added value services previously associated with the bigger chains while still maintaining a small club feel. Hotel health club members interviewed
for the Black Report described the quality of service and the little extras as having a bigger impact on their club usage than brand or size of facility. These factors may well also be behind
Quality of service is one factor driving the use of microgyms such as Fitness First BEAT
Hotels and independent clubs could begin to dominate the £45–60 a month price range
72 Health Club Handbook 2015
the growing trend for boutique studios – offerings that are more personable, smaller in size and offer just one or two products delivered exceptionally well every time.
Adding value When new, inexperienced members join a club, they believe they will be in the club all the time. When they view
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