Community

68% retention in 7th year of operation 46% of visits from GF 85% Instructor retention Targeted Instructor recruitment Very specific club culture “Work out with friends” Word of mouth is top marketing strategy Bootcamp as retention and acquisition tool Regular quarterly re-launches Monthly GF promotions Above market rate pay for Instructors Very competitive environment Differentiate by service and culture Owners are passionate about changing peoples’ lives

7 years ago, 3 couples formed a partnership to buy an ailing club.  Unified by their passion to help people get the most out of life by being healthy and fit, they created a motto for Paramount Health and Fitness Club (“Paramount”).  Every action the staff takes must help to create “a better life for all of us”.  Their success lies in their passion being matched by their business skills.

A club of friends

All 6 owners work in the club, which guarantees a culture of service and friendliness that underpins their impressive retention* of 68%.  Aiming to create a powerful reputation for social energy and fun, the team of 6 launched Les Mills Programmes on Day 1 of opening the doors.  With one former and one current National Trainer in the owner group, you can imagine that every Group Fitness (“GF”) experience is world-class.  Group exercise has maintained its central role in the club’s success by consistently delivering circa 46% of total visits every month.

Brent Lavery, co-owner and GF Manager, states “Paramount’s culture is a huge contributor to our success.  It’s like working out with your mates!”  This atmosphere has helped them beat their membership target of 600 members so that membership now stands at 683 people.  Since buying the business in 1999, growth and retention have occurred despite a hugely competitive market.  There are 8 rival facilities within 5 kilometres, 80% of which offer Les Mills programmes and also charge very similar annual membership fees of circa AUD 600  - AUD 650 per annum. 

Marketing creatively

The owners also got creative around group exercise as a marketing tool.  Paramount set up Bootcamp in 2001 as an outdoor group exercise programme, inspired by watching an American TV show.  The first Bootcamp hosted 30 people in 2001.  5.5 years later, the most recent Bootcamp trained 200 people over 5 weeks and Bootcamps are now held 5 times per year.  Brent explains that Bootcamp is great for acquisition of members as well as retention.  After experiencing a great group training programme, non-members are excited to come to GF classes and join the club. 

Bootcamp has also been an excellent PR tool, with TV shows profiling the initiative and newspapers placing feature articles on the programme.  Yet despite Bootcamp’s success, word of mouth is King at Paramount.  The majority of the club’s growth has come from members recruiting other friends to come to the gym, which requires zero marketing spend and frees up funds for other areas of the business.

Savvy Instructor recruitment

Brent knows that Paramount’s Instructors are critical to club success.  Instructor retention is over 85% with only 2 team members moving on from the group of 14 part time Instructors in the last 7 years.  Paramount has concentrated on building a world class Instructor team with very selective recruitment.  

So BODYPUMP® Instructors have a background in weight lifting or are Personal Trainers, cycling Instructors include ex-Australian cycling champions, BODYBALANCE™ Instructors have expertise in Yoga and Pilates and Paramount’s freestyle boxing is run by a former amateur boxer.  50% of the clubs 14 Instructors have been recruited from members attending classes.  The rest of the Instructor team has been sourced by the owner group using their strong fitness networks to source skilled recruits that fit the programmes.

Brent has also made sure that there are strong male role-models in the Instructor team so that 6 of the 14 Instructors are men, which in turn has attracted high male attendance in GF classes.  Over 30% of GF attendees are men, beating the global average of 10% – 15% outright. 

Attractive financial rewards for Instructors 

Paramount looks after its Instructors paying them between AUD 5 – AUD 10 more per class than it competitors, with a class rate of AUD 50 – AUD 55.  They also receive club membership, attendance at Bootcamp for free – worth AUD 280 each time, lots of fun staff functions and a studio to teach in with a great sound system, top of the line microphones and excellent equipment. 

They are paid well in part because Paramount expects Instructors to take responsibility for their classes.  The Instructors organize their own substitutes, socialize before and after class to help enhance the feeling of community, initiate solutions to any attendance issues and are expected to always be professional, helpful, fun and of course, deliver extraordinary fitness experiences every time.

Consistent core GF events and promotions

Paramount keeps excitement high among members with GF events and monthly promotions.  In addition to the Bootcamps throughout the year, the club holds themed quarterly re-launches and uses free passes to encourage members to bring a friend.  Re-launches may take place over a week or with a Mega Class where all programmes – both Les Mills and freestyle– are featured, followed by some kind of party.  Monthly promotions tend to highlight individual programmes and always have a ‘bring a friend for free’ initiative.  Re-launches and monthly promotions tend to cost no more than AUD 200 each, yet create a huge amount of energy and focus on GF.

Paramount is consolidating its formula for success and so the books have been closed to new members.  Now the team of 6 can work even more effectively on helping their members achieve their fitness objectives by using a wider range of club services to coach them to success.  As Brent says, “it’s a good place to be.”

Paramount Health and Fitness is an independent club based in Melbourne, Australia.

*Retention has been calculated using the IHRSA formula of [1-(Aggregate dropped memberships for 12 months/12 month average beginning memberships) *100%]

Phillips says….

Uniting passion with business expertise is a powerful cocktail to drive success.  The ‘team of 6’ play to their strengths to build the business, by leveraging the skills of all owners.  This includes one former and one current National Trainer, who have created a GF powerhouse to help drive overall club success.  The owner’s early identification of how to extend group exercise into Bootcamps shows these guys have their finger on the pulse.

Brent demonstrates world-class skills in Key Element 3 of the Group Fitness Management System, Recruit World Class Instructors and Keep Them.  His emphasis on finding Instructors with a relevant background shows the impact of sourcing a team that fits the essence of each programme.  They will be role models for other Instructors in the club as well as for the members, which means experience in the GF studios will just keep getting better.

With their innovative development of Bootcamps, monthly promotions in GF and low cost emphasis on word of mouth marketing, Paramount also shows itself to be a sharp operator when it comes to Key Element 6 of the Group Fitness Management System, “Create a Group Fit Marketing Plan.”  All round, a savvy owner team.