Community

“Group Fitness (GF) is the source of our competitive advantage.  We do it better than anyone else in the area and that’s why 48% of our total weekly attendances consistently come from group exercise,” explains club manager, Jaci Griffin of Les Mills New Lynn (LMNZ) in New Zealand. 

Premium priced with average membership term of 25 months

Only 5 minutes by car or 15 minutes walk away sit 8 competitors with lower prices  (up to NZD 26 less per month) and shorter membership terms.  LMNZ has an average monthly fee of NZD 86 and average contract terms of 25 months, which means that each new member has a revenue value of circa NZD 2,150.  Recognizing that their competitors offer shorter, cheaper contracts and casual memberships, LMNZ provides an alternative to casual membership with a 10-visit card for NZD 150.  This has proved to be a very effective way of converting a prospective joiner to a fully signed up member.  Head office is always looking for the next ‘audacious goal,’ which is to increase the average membership term to 36 months!  This will no doubt continue to push existing retention* beyond its current levels of 64%.

A strong club culture supports success

A significant success factor also lies in the LMNZ culture.  The 3,800 members are multi cultural and love the very strong community spirit enjoyed at the facility. Often entire families are members and “all the members treat each other like extended family.” Jaci laughs as she explains that often in GF classes, there is so much noise because everyone is excited to see each other, that the instructor has to give them a friendly reminder to get started!  Jaci and her full time GF Manager, Amy Barnes thrive on a culture where members and staff know each other’s names and are very watchful to make sure staff maintain this personal and caring approach.

The RPM™ phenomenon at NZD 5 per ride

RPM™ is packed out despite members paying NZD 5 for every ride.  LMNZ offers 16 RPM™ classes per week between 6am – 11.15 am and 5.30pm – 7.30pm and has 39 bikes using 80% of the capacity available in those classes.  Whereas Les Mills Auckland’s RPM™ studio profiled in May 2006 is run by an independent business, LMNZ’S RPM™ studio is owned by the facility, which initiated this policy of charging for rides when the club opened in June 2001.  “It’s always been an extra charge from Day 1, so members have accepted it as standard,” Jaci states.  Meanwhile the revenue comes in every week from RPM™ fees, despite the facility being premium priced in the area.

The marketing power of instructors – 124 new members in a month

In October 2005, LMNZ ran an internal competition for the program with the greatest percentage increase in attendance over a 4-week period, with the prize being a team dinner valued at NZD 500.  Each of the 7 LES MILLS™ programs teams were given NZD 200 to promote their classes with amazing results.  With every team doing their best to encourage class attendees to bring-a-friend, backed by a membership special offer, LNMZ secured 124 new memberships by the end of October 2005. The offer created urgency to join immediately - new members didn’t have to pay anything for one month as long as they signed up by the end of October 2005. 

The numbers look enticing.  124 memberships with 2 year contracts and an average value of NZD 1,032 per annum equates to total income of NZD 256,000 and an investment of only NZD 1,900 for both the dinner and each program’s promotional budget. 

In addition the 35 LMNZ instructors loved the friendly competition and the BODYCOMBAT™ team won with a 16% increase in attendances in the month, which they celebrated in style! 

A month of open days and a payback of > 9 times

October 06 saw LMNZ holding a month of weekend open days, which were free to non-members.  Jaci takes this approach to create the habit in non-members of coming to the facility.  The total investment across the club was NZD 6,100 including a mailbox drop, two banners at major road intersections and a full-page advert in a local newspaper.  24 GF new members have joined, delivering income of approximately NZD 58,000 due to the majority of new members signing up for 36 months.  This is a payback of 9.5 times which demonstrates that even with smaller membership wins, return on investment can still be very powerful.

Sponsorship drives new member acquisition success

Over 5 weeks in July – August 2006, LMNZ launched a campaign where they mailed existing members with a 1-month voucher, which a non-member friend could use for free.  All members who introduced a friend who then joined the club were entered in a prize draw for a trip to Tahiti, valued at NZD 8,000.  This initiative delivered 213 new members representing income of approximately NZD 440,000 over two years.  The only investment by LMNZ was the mail out to existing members and decorating the club, which cost approximately NZD 7,000.  Even though “GF new members” were not tracked independently, we know that 48% of attendances are delivered by GF, so it would be conservative to assume at least 30% of these 213 members were GF new members.  In other words - a huge success all round!  It is also impressive that the Tahitian holiday cost LMNZ nothing.  Tahiti Tourism provided the holiday package for free as they wanted to raise the destination’s profile among the LMNZ member demographic.

Plan for red carpet nights for existing members only

It’s great that sales initiatives continue to be very effective, but LMNZ also want to make sure it keeps existing members happy.  So they will be holding a Pre-launch the Friday night before re-launch in the first quarter of 2007.  A red carpet will be laid out with roped barriers to the entrance and members will be welcomed in.  They can then take their classes, enjoy some free wine, beer and nibbles and catch up with their friends after a good sweat!  Members look forward to the LMNZ’s parties, so Jaci and Amy expect it to be very well attended. 

With Christmas coming up fast, we imagine LMNZ will have some more innovations to share in 2007. We look forward to hearing about their future successes, which build on its winning formula!

Les Mills New Lynn is part of the Les Mills New Zealand Chain and has 7 Les Mills programs

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