Digital workouts – and 7 other ways to drive revenue through group fitness

It’s often said that one of the biggest mistakes the fitness industry ever made was offering group fitness classes for free, because it caused clubs to overlook the value of group fitness.

Many an operator has dismissed group fitness over the years because it shows up as a cost on their Profit and Loss Statement, rather than a revenue stream like personal training. But that of course, only tells half the story.

The boom in group workouts over the past decade – aided by the rise of boutique fitness and the emergence of new technologies – has helped shift the dial on this debate and most clubs would now agree that group fitness is a key component of their retention strategy. After all, you have to sell a heck of a lot of PT to make money if you’re losing half your members each year.

Yet still, the sense remains for many that group fitness is a cost to manage and a hygiene factor, rather than the key to sustainable profit growth.

What if that wasn’t the case? What if packing the studio was the secret to long-term success and helping your club make headway in the online fitness space? For many of the world’s most successful clubs, it already is.

A thriving group fitness offering can form the backbone of member retention and acquisition. It can even become a lucrative revenue stream in its own right. Here are 8 simple steps to make your group fitness offering into a profit powerhouse:

1. Map out the bigger picture

One of the first steps to realizing a highly profitable group fitness offering is to identify how much revenue group fitness (both live and online) is contributing to various areas of your business. It may not yet have its own income stream on your P&L, but you can almost guarantee that group fitness accounts for a significant proportion of other streams.

A study by the ukactive Research Institute in 2018 found members who do 3 or more Les Mills classes per week stay with their club for 50% longer than those who don’t do classes – equating to an extra 9.8 months of dues per member. In other words, the members who were doing regular group fitness classes had twice the lifetime value of gym-only members.

For Christian Mason, Managing Director of the Virgin Active SE Asia portfolio of 14 clubs, group fitness is a key pillar of his member retention strategy, as well as helping to drive acquisition. “Group fitness is enormous for us. We’re sitting at 60 percent penetration rate for group exercise across our membership and that’s so important for our broader product offering.

“Personal Training is pretty strong for us, but group exercise is the best retention tool in the business. We know members who do group exercise visit the club more often, refer more friends, and give us the best NPS scores. It’s very short-sighted to see group exercise as a cost base. It’s a revenue driver because it’s about the reputation of your club. The pull factor of being able to attract rockstar Instructors – you can’t put a price on that.”

2. Digital workouts

Clubs that were quick to adapt to the challenges of lockdown made smart use of existing group fitness solutions available to them to quickly ramp up their digital offering to members.

According to a May 2020 ClubIntel report, three-quarters of the world’s clubs offered access to livestream group fitness classes or on-demand offerings, either through branded club apps or by teaming up with a partner. LES MILLS™ On Demand (LMOD) was the most popular third-party option, with 31 percent of clubs choosing the platform to keep their members active and engaged, along with Les Mills livestream options.

Many clubs took advantage of the 60-day free offer of access to Les Mills On Demand (LMOD) – which enabled members to continue the Les Mills group workouts they love doing in their facilities – and have since moved onto the LMOD Affiliate Program. This means clubs can support their members’ entire fitness journey by providing home workouts via LMOD, whilst receiving a share of the revenue for each sign-up. So they add a world-class digital component to their member offering, while also unlocking a handy extra revenue stream.

It’s a combination that members are keen to maintain even when their clubs are back to full capacity. Among new trialists of LMOD who took up the 60-day free offer through their club during lockdown, 82 percent would like to continue using the service via their club if they can receive a discounted rate (like that available through the LMOD Affiliate Program). Across all fitness markets, there’s been strong consumer demand for a hybrid of in-club and home workouts. Current club members account for 62 percent of LMOD users (as of May 2020) and 71 percent of these regularly attend live Les Mills classes as well.

One operator that’s taken rapid strides to enhance its member offering and unlock new revenue streams is Everyone Active. As lockdown struck, the 190-site UK operator combined LMOD with other fitness apps to create its own digital solution for members – Everyone On Demand. This pivot to digital paid off substantially, with over 10,000 members subscribing to the new £9.99 a month service, yielding vital additional revenue during lockdown and supporting longer-term member retention.

Standalone digital offerings can be a great way for clubs to win new fans online, build brand affinity, and then eventually convert them to becoming full members of the club. By taking the club experience into people’s homes, operators have the chance to reach huge swathes of the population who wouldn’t typically visit a club and help them start their fitness journey. There is clear appetite for such fitness progression among non-gym members using LMOD, with 53 percent stating they’re interested in trying live Les Mills classes in a club (research from May 2020).

3. Market your rockstars

If you’re lucky enough to have great Instructors, make sure they’re part of your marketing strategy to acquire new members, particularly as you bounce back from lockdown. Whether it’s through profiling them in paid advertising or simply asking your Instructors to promote their classes through their social media channels, rockstar Instructors are incredibly effective at pulling members through your door.

This is particularly true at Holmer Park Spa and Health Club in the UK, where star Instructor Hazel Davies’ BODYCOMBAT™ classes are consistently the most popular on the timetable, translating into big wins for her club’s bottom line, and life-changing experiences for her participants.

"I wasn’t surprised at all to hear you wanted to profile Hazel," says Assistant Manager Dan Phillips. "Her attendances for BODYCOMBAT this week alone are 100% capacity, with a further five people on the waiting list. Hazel’s next classes are typically fully booked straight after her class has just finished and we’re looking to build another studio to keep up with demand.

"Last year we had 112 new joiners in September alone, resulting in our highest direct debit of memberships in the club’s history. This has a huge amount to do with our Instructors and classes as evidenced by the feedback we receive," adds Dan.

"The returns on full classes speak for themselves – we have 60 classes a week and all are full. Each member is precious to us, so if you put that as your highest priority, with each member paying nearly £70 a month, that’s a huge revenue driver."

4. Double down on referrals

One of the reasons rockstar Instructors are so effective is because members love them. And when members love something, they want to tell their friends about it. Group fitness attendees recommend their gym to 18% more people than gym-only members, while 10% of group fitness attendees recommend to 10+ non-members (Qualtrics, 2019).

As Membership Engagement and Social Director for Crunch Fitness West Florida’s 18 clubs, Christian Dyer has pioneered a member-driven approach to social media marketing which has resulted in hundreds of new members.

“Focusing on user-generated content and incentivizing our members to post on social media has translated into a much more engaged membership who are much more willing to share about themselves,” says Christian.

“This helps to grow our brand and increase our interactions with potential members. Our strategy also serves as an identification tool for influencers and our most loyal members, so we know who our best advocates are and can act accordingly.”

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