Group Fit Profit

Group Fitness foundation for Finnish club doubling revenues in 2 years

lesmills — Wed, 13 Dec 2006 04:16:00 GMT

Family owned independent club

Turnover doubled in two years

January 2004 turnover € 0.6 million

December 2006 € 1.2 million

Retention* of 87 %

GF as key factor in business turn around

€ 120,000 invested in studio development

5 studios

1,300 members

63 classes per week

27% of total attendances in GF

9% of the total facility floor space dedicated to GF

Multi use facility

4,500 visits per week

Member average visits per week 3.46 times

In 2003 Liikuntakeskus Hukka (Hukka) was an old fashioned, family owned, tennis and squash facility with a small weight room in Oulu, Finland. 90 % of members were men and the business had a turnover of € 600,000 and was in decline. Yet in December 2006, Hukka has1,300 members, revenues of € 1.2 million, 5 GF studios, retention* of 87% and a gender mix of 50% men and 50% women.

The transformation began when Hukka’s owner, Johanna Riihijäarvi, visited one of the leading fitness clubs in Finland during 2003 – Wasa. There she met consultant Jalle Söderlund. “It was a real eye opener for me,” says Johanna. “I understood what a modern fitness club was all about, and what the potential was.”

Having witnessed the huge impact of GF on club success at Wasa, Johanna knew group exercise would be a vital factor in changing Hukka’s fortunes. Aiming to build GF as a source of social energy and a competitive advantage, she committed to building studios “where people want to spend time”. Johanna expands, “we just don’t compete with other sport activities, we compete with all other leisure activities.” Today Hukka enjoys 27% of its weekly 4,500 visits from GF, with only 9% of the facility floor area dedicated to group exercise in this 10,000m2 (107,500 ft2), multi-use facility. Overall member interaction is extraordinary with average weekly visits of 3.46 times, which far exceeds IHRSA’s average weekly member attendances of 1.75 times!

The keys to Hukka’s GF success

Johanna says the main drivers to their GF success today are friendly, motivated instructors and beautiful, clean and well-maintained studios. Their focus on excellent GF experiences has helped them to grow rapidly and successfully compete with other clubs in the area, despite their ‘top end’ membership fees of € 700 per year. Competitors range in size and pricing and offer annual membership fees from € 350 - € 700.

“We don’t do discounts”. And it’s interesting that Hukka hardly advertises. “Our members bring their friends. Most of our sales come through word of mouth,” Johanna states.

Investing in GF studios

Investing €120 000 during 7 months, Hukka transformed a number of squash courts into five GF studios offering 63 classes per week. Two studios are for women only (one multiuse and one for elliptical GF classes), a dedicated cycling studio with 60 bikes, a Mind Body room and lastly, a main GF studio for BODYPUMP™, BODYJAM™, BODYCOMBAT™ and freestyle classes. “We hired an interior designer recommended by our consultant, Jalle Söderlund. A big focus was on lighting and creating a great atmosphere. Colors were coordinated throughout the studios and harmonized in warm orange, yellow and brown.”

Sound system is a vital investment

Johanna believes great sound is critical to a superb GF experience. Consequently 16% of the total studio budget (€20 000), was invested in the sound system. “We appointed a local stereo company who optimized the system for each one of the studios. Music is so important for motivation; it helps you enjoy the class and gives you energy. The company made sure the sound levels was the same no matter where you where located in the room, avoiding the inconsistency and inconvenience of volume being too high or low.”

Attention to functional and experiential priorities

Committed to “exertainment” two big side screens were set up permanently either side of the stage in the largest studio - “Big Hukka.” The screens display the instructor so the participants get the feeling of being at a rock concert. Not to mention the disco bulbs in the ceiling!

In the cycle room, they have also enhanced member experience by projecting inspirational scenery from New Zealand onto wall mounted screens which was recorded by one of their instructors when she was travelling.

Ventilation was another area Johanna managed carefully. Their ventilation system measures carbon dioxide precisely and pushes more oxygen through as required. It’s effective because it works studio-by-studio and also adjusts to minimum levels when there are no classes.

Storage systems are placed in the back of the studios so they look organized and clean at all times. Entrances are at the back or on one side, so that people can “sneak” into class if they are a little late!

Maintenance is well managed with a 24-hour policy in place to fix any problems in the studios. And Hukka has contingency plans in place to make sure classes always run to schedule eg there is an extra sound system in all studios!

Instructors feel valued

Hukka’s investment in state-of-the-art studios attracted both members and instructors. CVs poured in according to Johanna, despite Oulu being a competitive environment for hiring teachers. When she looks for staff and instructors in particular, she prioritizes people who are social and like to interact with others. “We want to be our members’ friends” Johanna explains.

“We provide instructors with the best possible equipment to help them be great. Another upside is that when they have the best possible working environment, they feel valued, and stay motivated.” It’s noteworthy that the instructor team is very loyal, despite Hukka paying instructors marginally below market average, offering € 20 - € 25 per class.

Hukka also motivates instructors with more than money. For example, Hukka paid the trip and attendance fee for 15 instructors to go to a recent Les Mills’ Super Saturday convention in Stockholm, Sweden, which is 2000 km (1,250 miles) from Oulu. And each week the instructors receive an email newsletter outlining what is going on in the club so that they feel connected and involved.

Booking system helps to build relationships and track performance

Hukka’s booking and counting system helps instructors get to know their attendees. When members come to the front desk, they swipe their membership card and get a ticket for the class they want to attend. The instructor collects the ticket and greets all the participants. The ticket also states the members’ name, so the instructors gradually learn participants’ names. Additionally, the booking system provides Johanna and Sirpa Antikainen, Hukka’s full time GF Manager with all the class numbers they need to see trends and to make timetable decisions. They also use the information to follow up on members if their attendance drops!

Helping new members get the most out of GF

Sirpa organizes the timetable, leads the team of instructors and teaches 6-8 classes per week. She also runs the introductory classes for new members interested in GF. “We want the thresholds to be low for new members and so schedule a number of beginner classes at peak hours” Johanna explains. Hukka also has a special ‘beginners course’ where a group meets Sirpa twice per week during one month to guide them through the classes they want to try. This ensures they really enjoy full classes from their first experience and has proved very effective in creating participants who are GF fanatics.

Today Hukka has 1,200 GF visits per week and Johanna and Sirpa believe they are well on their way to reaching their goal of being a top GF club in Finland. Turn it up!

Liikuntakeskus Hukka is a privately owned facility in Oulu, Finland and has 5 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%]

Phillip says…

I applaud Johanna’s commitment to investing in her studios to help attract members to Hukka. It is great that her willingness to refurbish her facility and transform her business has paid off, with revenues doubling in less than 2 years. Her vision has created a business with retention* levels which are truly impressive at 87% while competing at the top end of the pricing market. Her example as an independent owner operator is inspirational.

Johanna’s success in making her studio ‘a destination’ with attention to both functional and experience enhancing design factors, shows Johanna to be very skilled at Key Element 5 of the Group Fitness Management System – “Develop The Best Studio You Can Afford.” The benefits for this have been substantial with instructors being more easily sourced in a competitive market and members coming to work out for a world-class average of 3.46 time per week. Congratulations!

Group Fitness initiatives deliver revenue time after time

lesmills — Wed, 13 Dec 2006 04:09:00 GMT

3,800 members

64% retention

48% of attendances in GF

Average contract term of 25 months

Premium priced - NZD 86 per month

Charge of NZD 5 for each RPM™ ride

GF used to acquire new members

Regular GF promotional activity

124 new members from instructor competition

Delivering NZD 256,000 of income

24 new members from open days

Generating NZD 48,000 of income

“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%]

New Group Fitness Management resources to support licensee success

lesmills — Tue, 12 Dec 2006 16:06:00 GMT

In January 2007, Les Mills’ Agents will receive a new Group Fitness Management (GFM) resource called “Building a World Class Group Fitness Operation”. This presentation offers more flexible options for licensees to access learnings on the 8 Key Elements of GFM.

Succinct GFM content with flexible format options

Taking at least 90 minutes to deliver as a ‘formal’ presentation, “Building a World Class Group Fitness Operation” can also be adapted to incorporate interactive sessions on particular areas of interest for attendees, so that sessions can last up to 4 hours.

Consequently we anticipate that Agents may offer it as an add-on management feature at Quarterly Workshops, which Group Fitness Managers and instructors (if appropriate) can readily attend.

This flexible nature of this presentation also makes it a convenient format for in-club delivery. Licensees may choose to request an in-club presentation with the option to concentrate on areas of specific priority for their organization.

While each region worldwide will have different pricing structures for these services, we are delighted to have received positive feedback from licensees as to its effectiveness at facility level, during a trial in USA and Canada over the last few months.

Getting the most out of GFM training

“Building a World Class Group Fitness Operation” works efficiently alongside the well-established day-long GFM Workshop, which continues to operate with global success.

Day-long Workshops facilitate deeper analysis of the drivers of GF and provides more time to solve problems in class and absorb and apply learnings to each attendees’ GF results. This means new skills are more effectively used when attendees return to work.

We have also observed that some licensees attend the day-long Workshop once each year, as they find it beneficial to set aside a whole day outside their facility to work on their GF business without distraction. Each year, they have a variety of issues to manage and so take different learnings from each annual GFM attendance.

A definitive guide to GFM available online from February 2007

As of February 2007, Les Mills’ licensees will have free access to a rigorous and comprehensive manual on GFM at www.lesmills.com . The content is designed to provide GF Managers with support at their fingertips on all factors which affect efficient management of group exercise.

The online resource has a section on each of the 8 Key Elements of GFM and is structured to be a practical guide for all licensee GF Managers. Each section covers the following areas:

• How will this section help me
• The goal(s)
• Best practice
• Every day challenges
• Tools

Select GF Managers globally have reviewed the content for effectiveness with the unanimously positive feedback.

We are very excited to bring this resource to you and believe it will provide invaluable support for GF departments in the Les Mills’ family. February 2007 – watch this space!

World-class attendance specialist shares her success formula

lesmills — Thu, 02 Nov 2006 17:33:00 GMT

As Regional Group Fitness (“GF”) Director for California Wow Xperience PLC, Judy King is responsible for group exercise in its 6 clubs in Thailand and 3 Clubs in Korea. Group exercise is viewed as a key competitive advantage in this recently listed company, so Judy knows that her strategies are under public scrutiny for effectiveness.

Judy has kindly agreed to a Q&A session on her attendance success, focusing on 1 of her 6 clubs – Silom Club, which is based in inner city Bangkok.

Could you give us a bullet point overview of Silom and its GF operations?

Description	Answer
Number of members	15,000
% of attendances delivered by GF	52%
Number of studios and capacity you can service in each class	3 studios: Studio 1: capacity of 90 with equipment or 140 without equipment Studio 2: capacity of 71 with equipment or 105 without equipment Cycling: 80 bikes Capacity of 241 – 325 depending on equipment used in classes
Capacity usage in peak timeslots	> 70% in all studios
Number of classes per week	193 in total 153 in Studio 1 & 2 40 in the Cycling studio
Les Mills programs on offer	BODYCOMBAT® BODYPUMP® BODYBALANCE® BODYJAM® RPM™
Freestyle classes on offer	A huge range including Yoga, PIYO, Stretching, Dance, Aerobics, Step and Cycling
Club size	4,500m²
Fitness Centre or Multi Use facility	Fitness Centre offering: GF Weights Cardio Personal Training Bikram Yoga Pilates Studio Juice Bar
Weekday timetable	6.30 am – 10.30pm (last class at 9.30pm) 16 hours in total
Weekend timetable	Saturday: 8.30am – 10.30pm (last class at 9.30pm) 42 hours in total Sunday 8.30 am – 8.10pm (last class at 7.10pm) 11.5 hours in total

What is your team’s greatest ambition for GF?

We will continue to strive for world-class results in world-class studios working with world-class Instructors.

We aim to lead the way in Thailand, Korea and the new countries we are looking at going into and be the driving force behind changing peoples’ lives in all aspects of health and fitness.

How would you describe the overall culture of Silom?

All our clubs are very much about FUN and high energy. So naturally our GF classes are also all about having serious FUN. Our Instructors play a key role in creating this sense of enjoyment. They are passionate, have incredible energy and are extremely talented.

What would you say particularly helps your timetable be very effective for driving attendance?

Our GF classes are scheduled off the hour and we also have a 10-minute transition period between classes.

In urban centers we find this really helps people have the time to get from work to class and this has had a positive impact on attendances.
Transitions mean that in the event a class is full, a member has the time to get into another class before it starts. Often, our members love to do more than 1 class. So the transition period also allows them to get from one studio to the next (which could be located on a different level) so this helps them get to class on time. Plus, there’s nothing worse for a member than being ready to go for it and then not being able to get a space!

How have you designed your timetable to meet the needs of your target markets?

We have different types of target market depending on the time of day and we target our classes to suit these groups. For example, one of our biggest groups is the gay community, who love BODYCOMBAT®, Dance & Step and so our evening classes consist of many of these classes.

How often do you change the timetable? How do you communicate timetable changes to members?

Generally our timetables are changed quarterly to keep the timetable fresh, exciting and flexible around seasonality.

We make weekly or monthly changes if necessary, however these changes are very minor. Our GF Coordinators are very in tune with their customers and are on the floor communicating with them whenever possible.

We also highlight our changed classes with BIG Stars around them on the weekly schedule, which is displayed on the GF notice board. Additionally we note the changes in our News section of our schedule.

How do you manage under-performing timeslots?

This depends on the class and the timeslot. However we monitor our classes monthly to ensure classes do not have less than 10 attendances as well as ensuring they are not consistently below 30% capacity.

If they are below 10, action is taken, with either a change in the program, timeslot or the Instructor – upon review. We call this the RED Zone. If they are in the RED Zone, we will also monitor and consider what could be the effect of the low numbers.

RED Zone Classes are reviewed monthly and action taken immediately after review. We video assess the Instructors and give them feedback to help them improve their class. We also motivate and encourage them to find ways to increase their class numbers by going the extra mile. If we feel it is the program that is the issue, we will run an in-house promotion to help increase member awareness of that particular program. If we do not see positive changes on a monthly basis – after 3 months, we will either change the Instructor, timeslot or the program, depending upon which we think is the main cause of the low attendances.

We then monitor the class closely. If numbers remain stagnant, we will go through the above process again during a further 3-month period, until we find the solution. If class numbers continue to be below 10 or in the RED Zone and we have evaluated all areas with no positive outcome, the class will be canceled.

The GF Coordinator will then attend the class and communicate with the members that the class is not performing as expected, outline the proposed changes and explain the reason for the timetable alterations. We are fortunate that due to our large timetables, we are always able to offer members something else.

How does your team manage member complaints re GF?

We have comment forms available in the clubs for members to note their feedback. These get given to the GF Coordinators and are brought to Management meetings for review and discussion.

After group discussion a decision is made and the GF Coordinator personally calls the member back to explain the outcome. In some cases, members will email or call directly to our customer service line. These complaints are often emailed directly to me, as Regional GF Manager and I reply to them personally, via email or phone or in some cases my District GF Managers will deal directly with the complaint.

Give an overview of your GF Marketing Plan.

We have a 12 month GF Marketing Plan in which we have specialty/promotion classes 2 times per month This creates excitement, energy, fun, social interaction, great atmosphere and maximizes class numbers. These specialty classes also include our Re-Launches every quarter. We take Re-launches very seriously and they are always a HUGE event. We normally invest USD $50 for decorations, over USD $200 for prizes / giveaways and USD $100 for branded Instructor outfits for each event. (Luckily for us we can get great value for our money). Often, my GF team put in their own money and come up with some creative and unique “costumes” of their own!

In addition we conduct 2 big Events per year and one of our most successful has been our GF Challenge. The GF Challenge gives each member a passbook, in which they had to attend a certain amount of classes in each class category (Aerobic/Step, Cardio, Strengthening/Toning, Mind/Body, Dance) over a 4-week period. If they achieved the required amount of classes, they won a small prize and went into the draw to win a trip for 2 to the island of Phuket. The prize for 2nd place was a Stereo System by LG and 3rd prizes were MP3 players. The outcome was that people tried classes they never had attended before, which has helped to grow attendances across the timetable.

Are other parts of the gym incentivized to introduce members to GF? If yes, how?

There is no incentive – just teamwork and cross promotion from departments. Our GF Coordinators meet with the Personal Trainers (“PTs”) every quarter to encourage their support and keep them informed with the latest trends and information for GF. PTs schedule GF Classes into their clients’ programs for cross training and to help promote GF.

It is recognized that GF is a key service we provide and all departments understand that we play a huge role in member retention. Therefore this supports the entire club with member renewal and referrals.

How is GF incorporated into a new member’s plan for success?

New members are booked into our GF Orientation Class by the sales counselor. These classes are always held in off peak times – normally late afternoon and/or weekends.

How is GF incorporated into tours for potential new members?

GF Studios are a highlight for the sales tour, as GF classes are normally packed and huge energy! Non-members are drawn to the fun.

Describe your Instructor team.

At Silom, we have 5 Full Time Instructors (one of which is the GF Coordinator) and we have 35 Part Time Instructors. This club was our first club in Thailand and therefore has our most senior Instructors.

We have a very high quality team and the GF Coordinator provides constant feedback and encouragement to help them improve. The team is always going the extra mile to provide an awesome experience for their members and the Instructors develop very strong relationships with the members in their classes.

The Instructors are EXTREMELY loyal to our team and our club. They work well together, they are creative, inspiring and willing to go beyond the call of duty to give the members the best experience possible.

How much does management support training of Instructors?

Training of our team is a crucial part of our success. We run in-house education, seminars, workshops, tuitions, challenges, and jam sessions. Also, Instructors are assessed every 2-3 months, using video or in-class review. At least every 6 months we have a Guest Trainer come from either USA or Australia to conduct Instructor development training. We also have 3 Les Mills Trainers as part of our GF Management Team, who are wonderful role models. We always aim to keep the team inspired and at the top of their game!

How would you summarize the key elements of the success of GF in Silom?

Huge commitment/dedication from the team. Willing to learn, improve and be the best they can be. The team is extremely talented. They are hard workers and understand what we expect from them. WORLD CLASS!
With a wide variety of programs on offer, our schedule is creative and generates enormous interest for a wide variety of members.
Another huge factor contributing to the success of GF in Thailand is the demographics. GF is just as popular amongst men as women and 75% of my team is made up of men!
Our internal Marketing Plan which constantly drives energy and excitement, which in turn attract attendance.

Any final words on your winning strategies?

Provide leadership to your team and inspire them to fulfill their potential. Always remind them that we are there for the people in our classes, and not vice versa. Match that with strong programming and attendances will grow.

Silom Club is owned by California WOW Experience PLC in Bangkok, Thailand

Group Fitness delivers 38 new members at quarterly open days

lesmills — Thu, 02 Nov 2006 06:14:00 GMT

Quarterly two-day event

GF as main draw card

48 new members secured

38 new members due to GF

Cost of AUD 570

Payback of over 80 times

Contra deals for give-aways

Management support for the event

Cross club involvement

4,400 members

Been open for 11 months

28% of total attendances from GF

56 classes per week

Competitive local environment

Fitness First Adelaide (“FFA”) knows how to get the most of its quarterly events. It’s a win-win for everyone - existing members feel appreciated and love the party buzz while the club makes a huge return on investment. At a recent Open Day/Mega Launch, FF secured 48 new members, 80% of which were due to Group Fitness (“GF”) and exceeded normal foot traffic by 15% with 1756 people coming through the facility during the two days of the event. Overall payback was huge at over 80 times, due to savvy promotional strategies, which reduced the cost of raising awareness about the open days.

Management support as critical success factor

A vital factor in FFA’s success is the mindset of the management team. National GF Director, Yvette Flacke, actively encourages these events, due to a keen desire to prove that GF can generate revenue directly from its activities. Add to that the “can –do” attitude of the FFA club manager, Michael Vodopianoff and GF Manager, Kim Haynes and you have a dream team. Michael describes Kim as “the most enthusiastic Group Fitness Manager ever” and backs her to ensure GF is the main draw card at every open day FFA holds.

Club management support for these events means that Kim had cross-club buy-in to the event. As a result there were 5 membership consultants available throughout the two-day event and specific scripts for reception to help them sell the experience into non-members. The club was also decorated from reception all the way upstairs to the GF studios, with streamers and balloons plus a DJ playing constantly to enhance the party feel. Michael also sets aside the time to keep the sales team up to date with what’s happening in GF and regularly communicates the differences between programs. Consequently, membership consultants find it easier to sell relevant yet exciting fitness packages to member prospects.

A focused, low cost event strategy

Kim’s main promotional tools were free passes, which Instructors gave to members so they could bring a friend for free. Instructors were given a specific script to advertise the open days in class, for two weeks prior to the event. All promotion was internal so the timetable retained the same class format as normal but had big yellow stars all over the open days, so that people couldn’t miss it! The timetable was posted on the GF notice board and also on the website, while posters and flyers were placed all over the club to help spread the word.

Food, drink and give-aways were financed by ‘contra deals’. A member provided food and wine for free to help promote his business. A local food franchise also provided more free food to drive awareness that they had recently opened. And attendees could drink as much Red Bull as they wanted to keep them maxing out in the GF studios. Prizes for raffles, cardio bingo and the lucky door prizes were FF branded T-shirts, caps and bags, which had more perceived value than cost for attendees.

A large return on investing in the event experience

Team teaching is a must at FFA open days. Each of the 7 Les Mills programs are taught by two Instructors who are both paid the full hourly rate for their time. Instructors practice for free with such intensity that re-launches of the Les Mills programs occur just two weeks after the Super Quarterly. Profiling all 7 programs during the two open days, wage costs totaled AUD $320. When added to the cost of the DJ - AUD $250 for 2 days – the total investment in the event was only AUD $570.

The number of new members hit FFA’s target, with 48 new joiners signing up for their promotional offer. FFA waived the joining fee of AUD 100 so that the average annual membership fee was AUD 1000. This equates to AUD 48,000 of revenue from the event for a discrete cost of AUD $570. Michael noted that GF was responsible for 80% of the new members, concluding that group exercise created over AUD 38,000 of turnover. The rest of the new members came from people who just dropped in to check out the party or existing prospects that the sales team converted during the open days. Michael states that in the 11 months since FFA opened, each event has delivered this level of revenue for the facility. Very impressive work.

Group Fitness as a core competitive advantage

It’s clear that GF is one of FFA’s critical success factors with 28% of visits from its 4,400 members being delivered by group exercise during 56 classes per week. The management team really understands their local market and mixes 45-minute lunch classes with standard class formats, to meet the needs of their time-pressured members. Being a city-based facility, FFA has 3 competitors within 10 minutes walk, all priced at a similar level including one club, which also offers Les Mills programs. With average class usage being at over 65% of capacity, Kim sees their winning GF formula being in the quality of the fitness experiences they offer. “We lead by example and have a passion for teaching and are determined to demonstrate the potential of GF in the fitness arena.”

Michael, Kim and the team are always looking to improve. So the next event will have an extra BODYPUMP® class to meet demand and free passes will be given out only a week in advance to ensure the message stays fresh and exciting for members. Beyond events, Kim aims to bring GF attendances as a percentage of total attendance to over 30%. Given what Kim, Michael and the team have achieved in the 11 months FFA has been open, we imagine this goal will be met very soon! Congratulations.

Fitness First Adelaide is a member of the Fitness First Chain in Australia and has 7 Les Mills programs

Phillip says……

FFA’s success shows the power of having management support for GF driven promotional events. With Michael’s backing and Yvette Flacke’s strong encouragement, success became much more probable. Further, increased cross-club buy-in has helped to create very substantial returns on investment.

The FFA team has implemented the key learnings of Key Element 6 of the Group Fitness Management System – “Create a Group Fitness Marketing Plan” where the impact of quarterly events is emphasized. Add to that, Kim’s commitment and passion for getting the best out of GF for her members and her team, demonstrates key qualities of a top GF Manager as outlined in Key Element 8 – “Hire or Be a Great GF Manager”. Excellent results from a great team!

Group exercise positioned to service Baby Boomer fitness needs

lesmills — Thu, 02 Nov 2006 05:44:00 GMT

Responding to the Baby Boomer phenomenon, Les Mills International has created a new group exercise program BODYVIVE™ to help fitness facilities meet the needs of this highly influential, aging generation.

Everyone knows that the Baby Boomer generation (born between 1946 –1964) is a rapidly expanding market to service. You only need to look at a few statistics to get an accurate overview:

Over the past 15 years the defining characteristic of [fitness] industry change has been in the population of older health club members(1)
Taking the USA as a barometer for the rest of the western world, “As of January 1, 2006, this enormous cohort, almost 80 million strong, ranged in age between 43 and 60....Totaling 31% of the US population."(2)
This market segment in relative percentages is now growing 4 times as fast as young adults 18-34 and twice as fast as adults 35-54(2)
The majority - 68% - of fitness club members are aged 35 or older, up from 43% in 1988(2)
a projected 78% growth in available programs is required to meet the needs of the aging population(3)

Yes – it’s big. Yet in the largest western market in the world, Baby Boomers are not being given the attention they deserve when it comes to designing and marketing products and services. Consequently, 10% of the marketing dollars are spent targeting people over 50 years old, while they account for half of all consumer spending in the USA(3). So what do Baby Boomers want and how can the fitness industry help?

A snap shot of the target market

In their current life phase, a large proportion of Baby Boomers are redefining retirement. Many retire early and view retirement as an opportunity to enjoy the fruits of their labour instead of it being the end of their productive lives.

Consequently, they are a group who measure themselves by what they can accomplish rather than how old they are(3). Their goal is to enjoy more for longer and the fitness industry can help them do just that.

This market is aware of the benefits of physical activity. The International Council on Active Aging notes that 98% of 50+ adults surveyed by the American Association for Retired Persons, know that getting enough exercise is important. They are also being incentivized to exercise as health insurers offer lower premiums for more physically active clients.

Further, 45% of adults aged 50-79 are interested in attending exercise classes for people in the same age group and 71% of people aged 55 and older feel that advertising does not reflect their life nowadays(3).

This group is also well placed to prioritize their health and well being. As they grow older they will have more time for physical activity when their children leave home. Baby Boomers are also more stable with an annual house move rate of 2 or 3 times less between 40 – 60 years old than their younger cousins in their 20s and 30s. And from an economic power perspective, they are considered by many to be the most affluent demographic group in the history of western civilization(2).

Attracting the target market

As David Cook states in “The Pig in the Python, How to Prosper from the Aging Baby Boom”, ‘any company that can tap into the health worries of this generation will land a guaranteed and large market.’

As people get older they become increasingly conscious of wanting to maintain their health and productivity. These are the ‘sensible and responsible years’(2) where what you eat, drink and how often you exercise takes up much greater ‘mind space’.

This means that fitness providers need to offer programs and services to keep Baby Boomers well in three ways: physically, mentally and nutrionally.

Group exercise and Personal Trainers are two likely services to help Baby Boomers feel successful in staying active and healthy. Group exercise creates a sense of community and positive reinforcement, which can be enhanced by information on nutrition and in-center seminars on health management. Similarly, Personal Trainers are well placed to foster improved fitness with person-to-person coaching and can share information on critical health elements such as eating well and optimal physical activity.

Marketing to Baby Boomers also needs specific attention. Many images of Baby Boomers range from George Clooney look-alikes to fragile and physically restricted individuals. These visuals do not carry an appeal that resonates with older adults who prefer images of normal people in comfortable clothing(3). It’s clear that marketing imagery needs to include everyday, healthy looking people in relaxed clothes in order to communicate the right message for this market.

It’s also worth reviewing ways to encourage Baby Boomers into fitness and wellness centers by offering different membership options. Program specific memberships or user-pays options have both been used effectively for this market.

Market benefits for the fitness industry

If you were to design an ideal set of attributes for a member, they are likely to look something like this:

Doesn’t move around too much so they stay with the facility long term
Have sufficient time to visit the facility at least twice per week
Can afford the fees levied
Are results focused
Want to live their lives to the full
Enjoy a sense of community
Are part of a growing market

Such members would enhance retention and hence profitability with the additional benefit of contributing to the sense of community in the facilities they visit.

And these attributes also describe Baby Boomers as a target market.

It can be a win-win for fitness providers. They can be passionate about helping to transform the health and well being of a generation, while receiving the benefits of servicing an affluent growth segment.

A new program from Les Mills to help service Baby Boomers

Responding to this growing demographic need, Les Mills created a new program for this target market. As of early 2007 the first facilities worldwide will launch LES MILLS™ BODYVIVE™. It is a low-impact, 55-minute class, incorporating aerobic exercise for heart fitness, resistance work for strength and stability, and stretching and mobility work.

It is particularly suited to active adult gym members in their 40s, 50s and 60s and will also appeal to group exercise beginners.

Like all the LES MILLS™ programs, BODYVIVE™ is constructed around results-oriented choreography and delivered by motivating instructors to popular music familiar to participants. In addition to taking a great class, attendees will also receive LES MILLS™ nutritional information to help them on their path to being ‘fit for life’.

The program also reflects independent research conducted for Les Mills, which indicated a strong preference for a program for mature adults among club owners and instructors seeking a new Les Mills offering.

Created by a Les Mills program development team headed by Creative Director Emma Barry, BODYVIVE™ has already been trialled over six weeks in 12 clubs in five countries: the United States, the United Kingdom, the Netherlands, Australia and New Zealand. Per AC Nielsen compiled feedback, 81% of responses by triallists over 40 years of age showed they were either "satisfied" or "very satisfied" with the class and, importantly, 86% of responses indicated they would recommend, or strongly recommend, the program to others.

BODYVIVE™ has been reviewed by an international Review Panel of industry experts, whose feedback was invaluable in shaping its final form. Among the panel members were Colin Milner, CEO of the International Council on Active Aging, Peggy Buchanan, Spokesperson on Older Adult Fitness for IDEA and Cedric Bryant, Chief Science Officer for the American Council on Fitness.

Endorsement for the program has come from U.S. fitness industry leaders and Les Mills distributors Sara Kooperman and Lynne Brick (who were also members of the Review Panel).

A principal of Maryland-based Brick Bodies and a member of IHRSA’s Board of Directors, Brick says: “BODYVIVE™ combines Les Mills’ world-famous ‘exertainment’ factor with intelligently integrated exercise options".

“This program is just what clubs need to service their growing baby-boomer memberships.”

Renowned fitness education and convention provider Sara Kooperman agrees that: “BODYVIVE™ will be received with open arms by clubs who want to stay in tune with changing club member demographics.”

Should you have any queries about BODYVIVE™, please email info@lesmills.com

(1) 2004 IHRSA Profiles of Success reported by Active Aging in America
(2) Plan for Growth, John McCarthy 2006 – IHRSA
(3) International Council for Active Aging

68.8% retention in 3rd year of operation

lesmills — Wed, 01 Nov 2006 07:42:00 GMT

68.8% retention*

2.5 years old

3,300 members

“country club” style fitness centre

20% of attendances from GF

13.4% of real estate dedicated to GF

59 classes per week

30 Instructors

66% of timetable Les Mills programs

Top quality Instructors

Culture of customer service

Mid priced compared to competitors

New strategies for growth underway

In April 2004, Joyce Freeman opened her Golds Gym franchise in Camp Hill (“GGCH”), Pennsylvania. 7 months later, Joyce, her General Manager, Cindy Magnuski and her Group Fitness (“GF”) Manager, Jennifer Silvetti, decided they need to make some radical changes to improve the performance of group exercise. So they launched BODYPUMP® and reduced the 42 strong Instructor team to 20 people, following the decision to introduce pre-choreographed GF. As they explain, it took “strong and unwavering leadership” to transform the team from freestyle teachers to pre-choreography. It was very simple -“either people were on the bus or they weren’t.”

Building a quality GF offering

Today, GF has 30 Instructors, 20 of whom are Les Mills certified, while 10 continue to teach freestyle classes, which enjoy solid attendances. Offering 59 classes in 3 dedicated GF studios each week, 6 Les Mills programs represent 66% of the timetable. Prior to introducing Les Mills programs, GF was contributing circa 10% of total attendances which increased rapidly to over 20% in 10 months and has held steady at this level ever since. With 13.4% of GGCH being dedicated to GF, Joyce views GF as punching above its weight and is now planning to grow GF’s contribution from this established attendance base.

Retention success factors

With circa a fifth of attendances consistently being provided by GF, Joyce considers group exercise as a key factor in GGCH’s strong retention* of 68.8%. Joyce also attributes consistent retention to the club itself, which she describes as “a country club of fitness”. GGCH was designed to deliver each fitness experience to be larger than every day life due firstly, to the scale of the facility and secondly, to the attitude of the staff. GF has enhanced this strong customer service culture by working closely with reception to bring GF alive at front desk with both friendliness and knowledge of what programming is available. In addition, GGCH expect staff to know members’ names wherever possible and to make every contact with members personal and sincere. Staff recruitment has played a huge part in this with GGCH attracting people to work throughout the club who are passionate about fitness and are excited to help people improve their health and wellbeing.

Proud of Instructor excellence

Joyce highlights the importance of having Instructors who are role models for members and who also inspire less experienced teachers. Until June 2006, the team of 20 Les Mills certified Instructors included 2 Master Trainers and 2 Assessors. Unfortunately 3 out of those 4 top players have recently moved out of town in addition to a further 2 top BODYPUMP® teachers leaving Camp Hill, so GGCH is managing the loss of 5 elite Instructors. However their legacy carries on, so that improvement is continuously strived for. This is backed up by the majority of the 20 Les Mills Instructors being assessed quarterly, with all Instructors being reviewed a minimum of twice each year. And to ensure quality is fostered from Day 1 of teaching, newly certified Instructors are allocated a buddy post Module and team-teach on average 6 - 7 times over 1- 2 months before they go it alone. Joyce states - “you earn your right to a class at GGCH”.

Recruitment and rewards

Recruiting to replace top Instructors is always a challenge. To date, GGCH has recruited most successfully from members yet is beginning to enjoy its reputation for GF, having recently attracted a strong BODYPUMP® Instructor who is moving into the area. She is currently undergoing a rigorous yet friendly evaluation by Joyce, Cindy and the program team before she can hit the stage! Recruitment is also backed up by good financial rewards so that Les Mills Instructors are paid USD 18 – USD 22 per class depending on the number of programs they teach, their level of mastery and general contribution to the team. Additionally GGCH has provided a clothing subsidy for Instructors to support their wearing branded outfits, an allowance to part pay for each new quarterly release and provides subsidized membership. GGCH will also advance the cost of certifying on a case-by-case basis and recoups half the costs from payroll over time.

Quarterly events locked into the marketing calendar

The GF team works hard to maximize the impact of quarterly re-launches of Les Mills programs. In Joyce’s words “ we really play it up” and spend at least USD 500 each time we hold an event. “ Our Instructors enjoy putting on a show and members love it. It always creates a lot of buzz around the whole facility.” Each re-launch is themed with a vengeance. For example, one event was called “Club Golds” where there was a disco theme in the main Studio with velvet ropes to manage entry, windows papered over, a disco ball and Instructors dressed up in style. Launches of new programs are also themed if possible, so that BODYCOMBAT® had the tagline “get into the zone” with combat outfits for Instructors and military style decoration of the stage.

Untapped potential

Having altered the timeslots in the timetable and replaced 5 top Instructors since June 2006, Joyce and the team are taking up the challenge of both maintaining and growing GF attendances. Additional strategies for attendance growth include plans to leverage GF more effectively outside the GF studios and also beyond the facility itself. Internally focused initiatives include consistently embedding GF into sales tours to bring new members quickly to GF. Also, the team is planning to profile GF within club-wide competitions and challenges so that existing members are encouraged to try GF within a specific club fitness promotion. A further source of untapped potential under review is for GGCH to use their established success at re-launches to hold 1 or 2 re-launches per annum geared towards attracting non-members to the facility.

With their commitment to excellence and determination to grow their successes in all areas, we have no doubt GGCH will continue to impress.

Golds Gym Camp Hill is an independent franchise of Gold Gym in Pennsylvania, USA 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%]

Phillip says….

Joyce and Cindy demonstrate that commitment to quality and customer service pays dividends with strong retention of 68.8% in the 3rd year of operation.

Their focus on Instructor excellence and the importance of role model Instructors shows they have a strong understanding of Key Elements 3 and 4 of the Group Fitness Management System – Recruit World Class Instructors and Keep Them & World Class Training. It’s always difficult to fill the gap that top Instructors leave when they move on, which highlights the need to always be on the hunt for top Instructor talent to minimize the impact of staff turnover when it occurs.

With their keen sense of what it takes to build growth, GGCH is well placed to continue their successes.

From 8% - 80% capacity usage in Group Fit in 18 months

lesmills — Sun, 01 Oct 2006 23:37:00 GMT

8% capacity usage in GF 18 months ago
Quickly reduced Instructor team from 50–20 people
Average attendance in class was 4-8 people
Launched Les Mills programmes in March 2005
Successful freestyle classes maintained
Today 80% capacity usage in Les Mills classes
78% retention
54% of total attendances are from GF
Only one studio available
GF Manager negotiated use of other space for classes
Deliver 65 land classes per week
45 classes in the studio, 20 in other facility venues
Premium priced in the area
Very high quality in Instructor team
Instructor team to reach 40 people by November 2006
Minimum of 20% male attendance in Les Mills classes
Rank in the top 10 out of 250 LJCCs in USA

In March 2005. Jinda Teichmiller received full management support to transform Group Fit (“GF”) so it would become the heart of the Levite Jewish Community Centre (“LJCC”) in Alabama, USA. When Jinda took over, the average class participation was crawling along with as few as 4 attendees in a room that can fit 50 people and a timetable offering 30+ classes per week.

In 18 short months, the change is staggering. Today all Les Mills classes have circa 80% utilization with the exception of RPM™, which enjoys 100% capacity due to the much needed booking-in system for the 12 classes offered per week. “We are busting at the seams,” Jinda explains and so “it’s challenging for new members to try GF classes now”. Members are even requesting classes in the ‘dead zones’ of 2pm and 3pm, leaving Jinda grinning with delight at the possibility of a week-day timetable that runs back-to-back for up to 14 hours a day. With 54% of total attendances being delivered by GF and retention* of 78%, GF is now established a core competitive advantage of LJCC.

Creative ways around a shortage in studio space

Space really is incredibly short. There are 45 classes per week in LJCC’s single Studio, where Les Mills programmes dominate the timetable. In addition to the studio classes, the LJCC offers a further 20 land classes for yoga, pilates, circuit and other freestyle programmes wherever there is space in the facility e.g. the auditorium, library, senior lounge and weight room. GF is ‘taking over the LJCC’! With the expansion of GF beyond the studio, Jinda explains that GF is now ‘impossible to miss’ with its ‘contagious energy’ and multiple locations in the facility.

LJCC’s commitment to GF is obvious when reviewing the up and coming construction plans. The facility is going to raise USD 20 – USD 30 million with a view to expanding and refreshing the existing site and GF will benefit enormously. There will be 3 GF studios, rather than the current 1 room dedicated to group exercise: a main Studio which will ideally service 80+ people, an RPM™ room that can accommodate 50 – 60 bikes and a Mind Body studio that will cater to 50+ attendees. Jinda hopes building will start in 2007, so that GF’s growth is no longer constrained by real estate.

Tailoring the timetable to bring everyone to the party

Being sensitive to the fitness status quo in the membership in March 2005, Jinda knew she would have to make sure members felt successful from their first GF experience under her management. At the time, some members were apprehensive and concerned about change. In addition, many were de-conditioned and unaccustomed to regular exercise. Since that time, the GF environment has changed tremendously. Both the participant attitudes and physical changes have been monumental!

So choice of both Instructors and programmes were paramount to create positive momentum. BODYPUMP® was quickly followed by RPM™, BODYSTEP® and BODYFLOW™ and were taught by Instructors who created a very inclusive and helpful atmosphere. “The Instructor team has done a phenomenal job of creating encouraging relationships that have enabled our participants to feel successful and to achieve the results they are looking for,” Jinda says. Buy-in across the genders also occurred because of active recruitment of male Instructors to help bring more men into the rooms. Hence RPM™ enjoys 50% male attendance, BODYPUMP® has 40% men in the room, with BODYSTEP® and BODYFLOW™ have 20% male attendance in class on average. The gender mix achieved at the LJCC is extraordinary when you remember that worldwide women represent 85% - 90% of GF attendees.

Quality not quantity is what matters when building an Instructor team

Within 2 months of becoming GF Manager, Jinda had more than halved the number of part-time freestyle Instructors to 20 people. “These changes made some people uncomfortable but I’m OK with that. Change very seldom occurs without some discomfort, but the positive effects of these changes have far outweighed the negative ones” she states. Of the 20 Instructors left at LJCC, 16 became Les Mills certified and 4 continued on, as very successful freestyle Instructors.

Jinda prefers to find Instructors to fit the essence of the programmes, even if that means she has fewer teachers for the short term. At first this was tough but now many members are excited about the possibility of becoming GF Instructors and the talent pool is rich with possible quality recruits. The selection process can be quite challenging but Jinda is adamant that it is necessary to be selective, to ensure both members and Instructors get the most out their involvement with GF.

This commitment to quality has started to create some positive challenges. Today, some recruits get a little intimidated by just how good the existing Instructors are and the high level of expectation from GF attendees. Jinda welcomes this response to the quality of her team. So, to help newly certified Instructors she makes it her goal to coach them for as long as it takes with 1-to-1 sessions and scheduled team teaching so they can grow into their potential. Jinda sums it up: “the team knows you have to earn a class at the LJCC and they have embraced the culture of excellence because they love playing on an A-team”.

Clear expectation management for Instructors

Expectation management has created a foundation of strength for GF. Each Instructor receives a manual outlining their roles, remuneration and training requirements. It is also made clear that Jinda is responsible for Instructor quality, while Instructors are accountable for the experience they deliver in each class they teach. Instructors must video one class per quarter and Jinda reviews and feeds back on every one of them. Even if it takes a working week to review them all!

Jinda requires her Instructors to take charge of the studio before, during and after class. So, in addition to knowing their choreography 100% and keeping technique sharp and accurate, Instructors must chat with attendees before and after class while making sure that classes start with exacting punctuality. The team is hyper conscious of members having a ‘time budget’ to exercise, so all Instructors help each other set up or clear away equipment to make sure sessions run on time, every time.

Despite being very selective about Instructor recruitment, team numbers have surged in the last 18 months. By November 2006 the LJCC Instructor team will have almost doubled to 40, once the 5th Les Mills programme - BODYCOMBAT® is launched. With recruiting clarity and a system for quality control, it’s clear you can grow an Instructor team fast while constantly creating better and better experiences for your members.

Growth despite premium pricing

The LJCC sees group exercise as a critical service to attract a diverse group of people into the facility. Celebrating 70% of its circa 2,250 members being non-Jewish, the facility wants to continue member growth from the wider community. With core members being family groups, LJCC has found word of mouth to be the most powerful marketing strategy and has noticed that the GF ‘story’ has made its way through the grapevine rapidly across a broad age range. “People are flooding in” so that in May 2005 LJCC had 30 new members join compared to May 2006, when the facility had over 100 new joiners. LJCC is enjoying this growth despite being premium priced in the area. The average monthly membership is USD 60 per month whereas competitors are charging from USD 10 per month at the local YMCA to USD 48 per month at a national chain, which also has the Les Mills programmes.

Jinda highlights why premium pricing is possible. “The LJCC is like a department store where many programmes and services are offered; it is not a convenience store of just ‘workout facilities’. As a result, service and care for our members is top of the list. Members feel successful and valued with every visit and people are happy to pay for that”.

LJCC is getting noticed for its consistent wins. Out of over 250 Jewish Community Centres in the USA, the LJCC ranks in the top 10 based on member satisfaction and so is being ‘analysed’ by Head Office to understand what makes it so successful. Facility management knows that a key factor in its success is reaching out to change the health and well being of its whole community, even though it is a Jewish organisation. This facility is passionate about making a difference to everybody’s lives locally. Long may it prosper!

The Levite Jewish Community Centers is a not for profit organisation in Birmingham, Alabama, USA and has 5 Les Mills programmes.

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

Phillip says….

It’s clear that management backing for Group Fitness shortened the timeframe required for GF to become a competitive advantage in the LJCC. Jinda was given full support to transform the GF department so it could become the heart beat of the facility and has achieved this is just 18 months – an extraordinary achievement.

Jinda’s clarity around recruiting Instructors that fit the essence of each programme shows her mastery of Key Element 3 of the Group Fitness Management System – Recruit World Class Instructors and Keep Them. She has fostered an A-team by being willing to wait to find the right people rather than allowing mediocrity to enter her department. Her commitment to training so that she is willing to review circa 40 class videos each quarter, is world-class and is a benchmark for all GF Managers mastering Key Element 4 – World Class Instructor Training.

Jinda shows powerful leadership with her vision of how the department should evolve and a willingness to deal with difficult HR issues, even it meant being unpopular. Such strength of purpose is a key attribute of a top GF Manager as outlined in Key Element 8 – Be or Hire a Great GF Manager. Wonderful work.

Research highlights how to find the profits in Group Fitness

lesmills — Sun, 01 Oct 2006 23:36:00 GMT

An AC Nielsen survey confirmed that Les Mills’ participants work out an average of 2.9 times per week in Group Fitness (“GF”) classes or 150 days per year, exceeding IHRSA’s estimate of average club attendance by 65%. IHRSA research identified that members go to their clubs on 91 days a year – or just 1.75 times a week on average.

Specific responses also showed that 39% of members attend Les Mills classes at least 4 times per week, while 90% come to work out specifically in Les Mills classes 2 times each week.

Multiple benefits from more frequent attendance

Members who come frequently to the gym are much more likely to be satisfied with their membership and less likely to quit. This will have a substantial impact on all-important membership retention rates.

Yet retention is only the beginning of the opportunities that frequent member visits offer.

Word of mouth becomes exponentially more powerful when members have a strong involvement with their clubs. It encourages members to talk about their fitness experiences to family, friends and colleagues, which in effect is free advertising.

As well as being zero cost, word of mouth offers added upsides of being both trusted and personal. It also takes some pressure of your marketing budget which can suffer from the investment required to get noticed in a competitive market.

The AC Neilsen research also benchmarked word of mouth and retention factors and concluded that 92% of respondents would “definitely” recommend
LES MILLS™ programmes to their friends and 75% agreed they might change clubs if their club stopped offering LES MILLS™ programmes.

In the medium term, higher retention increases the capacity for clubs to incrementally raise membership fees and increase profits per member.

GF as an acquisition tool – the next generation of opportunity

In our experience, facilities which enjoy a high frequency of weekly GF visits, keep group exercise fresh and exciting for members by holding quarterly re-launches of pre-choreographed and freestyle programmes. Many clubs hold these events for the retention upside they offer.

Yet a select number have gone to the next level. They hold up to 2 re-launches per annum focused on new member acquisition with extraordinary returns on investment.

Country	No of Clubs	New Memberships	Investment	Annual Income	Duration of Event
France	1	82	€ 3,300	€ 38,540	7 days
Malaysia	10	210	USD 3,000	USD 111,000	1 day
Spain	1	140	€ 6,000	€ 62,160	4 hours

A number of case studies on re-launches for profit are available - please click here: http://groupfitprofit.lesmills.com/archive/category/1019.aspx

Building a successful GF department

Yet securing these benefits requires investment in GF resources. It’s critical that clubs have a commitment to excellence when recruiting talented GF Management, world-class Instructors, maintaining quality programming and employing savvy marketing strategy.

It would be great to hear your stories of how you get the maximum business benefit from Group Fit. If you are happy to share your successes, please email info@lesmills.com

68% Retention in year 7 of operation with 46% of visits from Group Fit

lesmills — Sun, 01 Oct 2006 23:35:00 GMT

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.

Group Fit attendance grows by 100% in 2 years

lesmills — Sun, 01 Oct 2006 23:34:00 GMT

GF Manager’s first GF Management role

GF in decline 2 years ago

Decided to change to pre-choreographed GF

Now has 6 Les Mills programmes

Niche student market in university town

70% of 2,300 members are students

Only NZD 1,000 per annum for promotion

Grew Instructor team from 6 - 15

Rigorous Instructor training key to success

Regular in-house video assessment for Instructors

Instructors go to every quarterly workshop

Facility pays for workshop attendance

Competitors pay Instructors more

Yet facility has 80% Instructor retention

Due to GF devotees being addicted to the experience

And Instructors addicted to the high energy attendees

Ron Werner was new to GF Management in May 2004. With no background in GF, he wanted “an easier way to lift numbers”. He decided on pre-choreographed GF primarily because it offered world-class training, which saved him the hassle of keeping Instructors at the top of their game. As Assistant Manager of Massey Recreational Centre (“Massey Rec”) in New Zealand, his time was limited to reverse the decline in GF and create growth. 2 years and 6 Les Mills programmes later, Ron and his team are winning and GF is ascendant!

Rebuilding the timetable

Taking a gutsy decision, Ron decided to rebuild the timetable radically. So in October 2004 he offered only 4 programmes: a freestyle step class, BODYSTEP® and BODYPUMP® and a freestyle martial arts class. After 6 months the members had voted with their feet and only BODYSTEP® and BODYPUMP® remained on the timetable. Programmes were added at a rate of 2 per annum and by July 2006 the launch of Massey Rec’s 6th programme - BODYJAM®, saw it hosting 106 people to celebrate the programme’s arrival.

Instructor training underpins extraordinary experiences

Within 2 years Ron and his Instructor team of 15 had doubled average attendance in GF with an advertising budget of only NZD 1,000 per annum. Ron believes Massey Rec’s winning formula is the result of creating an environment of excellence for the Instructor team combined with cost effective promotion to a niche market.

Two key factors to Massey Rec’s success are their commitment to Instructors going to quarterly workshops and the appointment of Anita Mooney as Head Trainer. Every one of the facility’s 15 Instructors is going to the next workshop, which is paid for by Massey Rec. As a community organization with significant funding pressure, Ron’s decision to invest in his Instructors maintaining their ‘edge’ is notable. This external training is enhanced by in-house video assessment, which now takes place regularly every 4-6 weeks when Ron and Anita drop into classes. Anita also ensures that Instrutors are constantly working on technique, choreography and coaching to make sure that class experiences continually improve. In 2007, Ron and Anita are planning to begin Instructor Awards to recognize monthly achievements within his team and support continual improvement in class experiences and numbers. As he says, “the experience in class is everything.”

Challenges to growth

Yet Massey Rec has some significant competitive, operational and financial challenges, which influence Instructor retention and attendance growth. The facility is operating in a tough market and pays its Instructors less than its local competitors. 3 competitors are based only an 8-minute drive away, in the centre of town and they also have Les Mills programmes. They pay Instructors an average of NZD 30 per class compared to Massey Rec’s NZD 20 per class.

And while the competitors charge higher membership fees, Massey Rec’s price advantage is offset by the lack of dedicated GF space to support a full timetable. Though the facility does have an RPM® studio with 14 bikes for its 10 cycling classes per week, the other 19 weekly classes take place in a sports hall, with the last class at 5.30pm because team sports begin at 6.30pm.

Add to that, Massey Rec charges members for every RPM® ride they take with a fee of up to NZD 5. Yet despite paying its Instructors less than other gyms, charging for RPM®, having no dedicated GF space and a restricted timetable, Ron has grown his Instructor team from 6 – 15 people in 2 years, has an 80% Instructor retention rate and doubled average attendances in 2 years to over 3,000 visits in GF each month. And even though some members still sometimes complain about the RPM® fees, the current numbers speak for themselves, with RPM® enjoying over 90% capacity usage across the RPM® timetable each week.

Making the most of a niche market

So with all these challenges, what keeps Instructors staying and GF devotees locked into Massey Rec? Ron believes the final ingredient is the impact of the niche market Massey Rec services. 70% of the facility’s 2,300 members are full time students. A further 15% of members are Massey University staff with the remaining 15% of members being local residents who pay NZD 350 per annum to have access to the facility. This means that class capacities of up to 75 people are dominated by young, high-energy students from the local university. The experience is wholly addictive and exhilarating for both attendees and the Instructors. So GF continues to grow and the Instructors retention stays impressively high.

Since Ron took over the GF department, most of the NZD 1,000 promotional budget has been spent on creating awareness among the student population. Massey Rec holds an ‘open day’ at the beginning of each term with a BBQ, information booths and mini GF demonstrations by the Instructors. This normally secures 10% of its memberships from the one event. The facility also heads into town for a “market day” alongside other local businesses, so that students can see what services the local area has to offer. Additionally, the team place posters in the first year students’ halls of residence and distributes newsletters regularly about ‘what’s on’. Yet Ron believes that the most powerful marketing tools have been word of mouth and encouraging Instructors to take responsibility for promoting their classes using free passes. By fostering referrals to drive growth, Massey Rec can stay within its budget.

Growth targets for 2007

Advertising outside the campus is minimal to date with an advert in the yellow pages and some flyers sent out to parents of a local school and nearby residents. In 2007, Ron has an ambitious goal of growing non-campus members by over 50% from 350 to 550 members. Part of this growth target is expected to be achieved by building on Massey Rec’s regular quarterly relaunches, which are free to everyone. Massey Rec relaunches only use word of mouth for ‘external’ promotion in addition to posters and POS material in the gym itself. These quarterly parties will be more actively promoted to give non-members free access to the GF experience and drive new member acquisition. Good luck guys – we know you’ll do it!

Massey Recreation Centre is based in Palmerston North, New Zealand and has 6 Les Mills programmes

Phillip says….

To build growth and a great team despite significant constraints is truly inspiring. Ron and his team show us what is feasible if you believe in your goal and put in place realistic steps to achieve it. Many facilities and clubs around the world have restricted resources and yet all have potential to grow their business taking advantage of their particular market conditions, just as Ron and his team have done.

With his creation of a winning Instructor powerhouse, Ron shows us what it takes to be an expert at Key Element 3 of the Group Fitness Management System, “Recruit World Class Instructors and Keep Them.” Ron’s ability to take tough decisions, such as changing to pre-choreographed GF, demonstrates his ability to lead and follow through, which are key skills highlighted in Key Element 8 “Hire or Be a Great GF Manager.” It seems that obstacles just make the determined even stronger.