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Picture this. A rural American town with a population of 75,000 people and a rapidly changing ethnic mix. Add to that, a number of competitors from a well-resourced chain plus substantial independents. You might understandably conclude this could be a tough market to be running a club.
Anne, Carrie and Kris, look at it differently. These guys manage two clubs in the same town of Yakima, Washington State. But why bother having two facilities?
Management believed the well established 40,000 square foot Athletic Club served the west side of town but significant growth lay untapped on the East side. So they went ahead and built a 14,500 square foot Gold’s gym 8 years ago…. |
- 2 clubs
- Tough local market
- Club 1: 64% - 68% retention in one year
- Club 2: 55% - 68% retention in one year
- Driving management systems hard
- Welcome system provides PT support for GF
- Pricing caters to market niche - top and mid range
- Each club has different target market
- Wider growth opportunities available
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In addition to this gutsy move, the team has been achieving some recent impressive retention improvements. The Athletic Club has increased retention* from 64% in 2004 to 68% in 2005 whereas Golds has stormed ahead increasing retention from 55% in 2004 to 68% in 2005. Why has it worked? Look to the passion of the staff to change people’s lives matched by a ferocious application of business systems to catalyse success. ACE certified staff deliver consistently professional service. Personal Training is driven by the APEX franchise. Group Fitness is powered by the Les Mills system with 95% of the timetable dominated by Les Mills programmes.
When questioned about the importance of GF in this system cocktail, the team is adamant that GF is key to club retention and differentiation. It’s no accident that during this period, management made a vital appointment of a new General Manager with a GF background, who has a remit to build retention gains. Add to this a new welcome system, which includes that Personal Trainers accompany new members into GF classes to build confidence and commitment. Combined with top quality instructor training and world class marketing material the team is certain that the Athletic Club and Golds offer the best Group Fit experiences in town. While local competitors rely on freestylers and locally produced promotional material, Anne, Carrie and Kris are committed to providing consistent excellence in the GF studios as a critical element to their club’s continued success.
With two clubs servicing different parts of the market the team sees great scope for continued growth. While they both sell GF as a key differentiator, they offer different facilities and price points to appeal to a wider market. The multi-use Athletic Club has the most expensive membership in the town of USD60 per month whereas the fitness only Gold’s gym has a mid range fee of USD36 per month. The gamble has steadily paid off, so that Golds now delivers 40% of the combined club’s total 3,700 members and also enjoys over 75% GF capacity utilisation. It goes to prove that perseverance and quality can pay off in a challenging local market.
*Retention has been calculated using the IHRSA formula of [1-(Aggregate dropped memberships for 12 months/12 month average beginning memberships)]