Growing Membership and Profit by Les Mills

60
Health & Fitness facility attendance has
50 become the biggest adult ‘sport’ in the
Western world.
40 Bigger than football, tennis and golf
combined …
30 We thought all stars we aligned for further
20 growth…

10 US Adult Fitness Club Participation
0
1960 1970 1980 1990 2000 2010 2020 2030 2040

LES MILLS INTERNATIONAL © 2011

• Membership retention is the largest problem facing our industry today
• Based on commodities and lacking the excitement and social
engagement of sports - We behaved more as gyms than as true health
clubs.
• Competitive industries are evolving faster than us, eg:
• Virtual exercise
• New sports
• Nutritional science
• Medicine
• Stagnating industry - Segmentation rather than innovations – The
industry has started to turn into itself – we are fighting for the same
customers instead of innovating to attract new ones (Budget clubs;
micro Gyms)

 Many facilities worldwide are being hurt
by low-budget competitors.
 At the same time, there are successful
new fitness models emerging (micro
gyms) eg:
• Cross Fit Studios
• Orange Theory - $23 per class
• Kosama, Omni, Fitness Together, Title Boxing
• Soul Cycle and Flywheel (US) – $32 per class
• Pure Yoga (Asia and US) –
$145 to $165 per month
• Exhale Spa (US) – $195 pm for classes-only
membership
• People are willing to pay for value…


Many operators focus solely on sales and profit. Sophisticated clubs and recreation
centers add membership numbers and retention statistics. These are valid but BUT
can not guide management decisions –We need to manage using leading
measures which predict what the outcomes will be.

There is one number that has a more powerful effect on success than any of the
others, that influences everything else: Member attendance.

Regular attendees renew their memberships, refer their friends and promote their
clubs at staggering rates when compared to members who pay but seldom use their
gyms.


For all the good efforts of the equipment
companies, it’s not about the machines.
It’s about becoming more than just a place
where people come to pump iron and run on a
treadmill.
Leave that to the budget gyms that charge
$10 a month.


Design a high-energy workout environment
Create a relationship selling and new
member induction system
Recruit a team of great personal and small
group trainers
Build a ‘club within a club’ system for
sports and other activities
Develop a member education and social
network communication system
LES MILLS INTERNATIONAL© 2011

13

 78% say room to exercise is extremely/very important!
 60% say the ambience of the room is extremely/very important


16

20

28

29

From Hard/Transactional selling to Relationship Selling to Educative
Selling:
Shifting the MCs’ focus on providing relevant ‘solutions’ for a healthier
and happier lifestyle – not selling a gym membership
 People join to get results and motivation but they stay because they
make friends - The Membership Consultant (MC) can be the first
powerful relationship…
 People research and buy online more and more
 We need to be more than the low-budget club – MCs need to bring
additional value to online buying

35 LES MILLS INTERNATIONAL© 2011

 MCs to become Membership Coaches responsible for setting up the new
member for success
– 24 Hour Fitness
–80% of prospects have been member of a gym before…
–No sales commission since last year
–They have cut from 12 sales consultant to 5 membership coaches
per centre
–Prices has increased and January 2012 has seen the highest
number of sales ever


 MCs to become Membership Coaches responsible for setting up the new
member for success
– LMNZ
–Shifted from hard selling to relationship selling in 2005
–MCs prescribe a training plan before the membership solutions:
– It increases the perceived value and allows for an educated decision to be made
– It creates ‘buy-in’ and commitment from prospect… It paves the road for new
members to become ‘addicted’ to exercise at your facility… and it creates a bond
with the MC.
–They are responsible and accountable for new member attendance
in first 3 months (21 visits)
 Recruiting and training MCs properly so they can deliver educative sales
pitch and prescribe holistic fitness prescription and relevant exercise
recommendations based on the customers’ needs


Going the extra mile…
 LMNZ – If a prospect doesn’t join, they leave with a 30-day exercise plan
to do at home – My Exercise Calendar
 Behaviors must align with Vision…


LMNZ - Improve the lives of New Zealanders
 Our goal is to get people to exercise, if possible in a gym and if possible, in Les Mills
gym. If they don’t join today, we still want them to start exercising. At some point, we
are confident they will join because they need MORE, they need motivation and we are
the coolest gym in town. Reece Zondag, CEO, LMNZ
 This approach allows us to:
– Come across as true fitness experts vs salespeople
– Preserve the relationship
– Give MCs a good reason to follow up and a real purpose behind each
follow-up call
– Focus no the talk being always about exercising, their goals, where
they are at with it, inviting them to an event vs latest greatest deal


 Implement a simple but thorough member on-boarding process
facilitating consistent attendance and focusing on usage during first
12 weeks. It will set the foundation for long-term engagement.

“Every year, the industry sells millions of memberships to men and women who, though
they earnestly wish that they could become regular exercisers, have not yet developed
the discipline or habit of regular exercise.”
IHRSA Guide to Retention 2007

“12% of all cancellations would be avoided if all new members visited the facility at
least once per week during the first calendar month after joining.”
FIA Top Ten Strategies for Winning the Retention Battle
STATS ON LENGTH OF MEMBERSHIP WHEN USAGE IS HIGHER THAN TWICE WEEKLY IN FIRST FEW MONTHS


LMNZ - Goal: 21 visits in 3 months
• Induction process with regular and specific
points of contact
• MCs are responsible for it (about 30% of their 21 visits
commission)
• they sell the dream; they make sure the dream
happens!
• Tracks every new member over 84 days and
visits at 14, 42 and 84 days


LMNZ: 21 visits in 84 days
 Result: 50% of members achieving the 21 in 3 months (Goal is: 65%)
 Give MCs a clear and genuine reason to call
– Red status: Rescue call
– Orange: What more can we do to get you here more often?
– Green: High-five call!
 Proven to be very successful in increasing new member usage,
maintaining member motivation by discussing exercise progression and
driving referrals earlier and more often


• Create a personal
relationship with
your members


Social media is revolutionizing
our ability to communicate!

But… it’s not as easy as it looks.
Engagement, interest and
authenticity are key.

Otherwise it’s meaningless…


Health clubs need to become
more than just places where
people go to use exercise
machines!
We need to become true providers
of holistic health. Education
changes lives and your members
will love you for it.


 Lifestyle Family Fitness (Florida)
teen fitness initiative
– FREE 2-Month Summer
Membership
– Teens can utilize all equipment
and participate in Group
Exercise classes
– Hourly restrictions in place
(ie non-prime time)
– Remember… teens have parents
and they grow up to become
paying adults


Freelance
Programmes


 A great way to increase the quality of
on-boarding, results and connection
(member to staff)
 Can be a good source of revenue
 Increase income opportunities and career
opportunities for GX instructors
 However:
– Even the best facilities in the world have less than
10% of members using PT on a regular basis vs
50%+ in GX
– Connection is with a single staff member: if the
member is unhappy with the PT or if the PT leaves,
you could lose the member
– No prescription of other form of exercise such as
GX (which is more social and more holistic)


 Currently the holy grail of the
industry
 Everybody wants successful SGT
programs
– Allows more people access to PT
– Increases $ per hour for PTs
– Builds relationships between members…
They make good friends.
– Brings back the spirit of sports teams
 Challenges:
– Best facilities only have 3 or 4% of
their members doing SGT
– As yet, no one has really made it
successful


“


• 90% of all exercisers report that they would prefer to work out in a group.1
• Members who attend Group Exercise (GX) use their facility 3 times per week compared to
IHRSA's figure of 1.9 member visits a week, on average.
• GX is cited as the biggest influence (40%) on how long people remain a member of a
fitness facility.
• GX member retention rates are higher than other member retention rates, on average.
• 60% of people rate GX as the #1 service they specifically look at when choosing a gym.2
• Satisfied GX members refer people 3 times more than other members.


Group Exercise attracts and motivates the
masses.
Some of the world’s most successful facilities
have over 50% of their attendances in GX.

“Group Exercise members attend more
regularly, remain members for longer, make
more referrals, perceive greater value in their
memberships (ie will pay more) and do not
leave when a budget gym opens nearby!”1

1. Will Phillips, The Retention Breakthrough


 Many facilities worldwide are
being hurt by low-budget
competitors.
 At the same time, there are
successful new fitness models
emerging (micro gyms) eg:
• Orange Theory - $23 per class
• Kosama, Omni, Fitness Together,
Title Boxing
• Soul Cycle and Flywheel (US) –
$32 per class
• Pure Yoga (Asia and US) –
$145 to $165 per month
• Exhale Spa (US) – $195 pm for
classes-only membership


• Independent research shows that LES MILLS™ licensed facilities have
500 more members per facility than the global average.1
• Average Group Exercise attendance at LES MILLS™ licensed facilities
is 33%, with top performers above 50%.1
• LES MILLS™ class participants visit their facility at least twice as
often as the average member: 3.1 to 3.7 times per week vs 1.2 to
1.9 visits per week.2
• 71.8% of LES MILLS™ participants say they intend to still be a
member of their fitness facility in 12 months’ time.3
• 95% of LES MILLS™ participants would recommend
LES MILLS™ programs to their friends and family.3
1. Scoreboard global survey 2011
2. Nielsen (2010); IHRSA (2011)
3. IHRSA (2009)

74

Nielsen Consumer Survey


 Prospects and members usually
need three types of training to cover
their basic needs

 Make sure you have at least one
great program you can recommend
BLINDLY in terms of quality,
experience and consistency in each
of these categories:
– STRENGTH TONING
– CARDIO
– MIND-BODY STRETCH


5 program genres comprise 75% of GX attendance every week
In order of market share, these are:
 21% Strength and Weights
 19% Cycling
 14% Mind and Body
 12% Dance
 9% Martial Arts


Do you have best-in-category Are you interested in launching new
programs for the activities program(s) to primarily increase
members and prospects are retention and strengthen your current
more interested in? positioning, or to differentiate your offer
and attract new types of members?
While each club community has
a variety of programs, research • Retention and positioning
shows there are five basic strengthening: go with program(s)
genres driving 75% of global naturally matching your club positioning
Group Exercise attendance: and main target markets
• Strength and Weights (21%) • To differentiate your offer and target
new types of members: go with
• Cycling (19%)
program(s) off your natural positioning
• Mind-body (14%)
• Whatever your primary goal, Les Mills
• Dance (12%) can help you achieve it with our
• Martial arts (9%) scientifically-based programs and
proven Group Fitness Management
System

Les Mills’ BODYPUMP® is the original barbell
class, designed and scientifically proven to
strengthen the entire body. This 60-minute workout
challenges all major muscle groups by using the
best weight-room exercises, including squats,
presses, lifts and curls. Great music, awesome
instructors and individual choice of weights inspire
participants to perform 800 reps per class and to
get the results they came for - and fast!

Due to its broad appeal, BODYPUMP® attracts
big numbers across all time-slots. Best practice
suggests scheduling it a minimum of 7 to 12
times across the week to maximize attendance.
Most clubs offer at least 2 classes per day.

BODYPUMP® participants visit 4.3 times
per week on average versus the industry
average of less than twice a week for non-
Group Exercise club visits.


Les Mills is committed to building our brand and
growing demand for your classes. That’s why
we’ve teamed up with Beachbody, the best-
known provider of home workouts, to create
LES MILLSTM PUMP, a set of home-workout
DVDs. We’ve seen the power of other brands
using infomercials to drive consumer awareness.
Partnering with Beachbody will introduce a
national audience of millions to the Les Mills
brand. The exposure will help to drive more
people into your facility and classes, and make it
that much easier for you to sign up new members.


Les Mills’ BODYPUMP® is A short, sharp workout, An indoor-cycling workout Les Mills’
the original barbell class, backed by core where participants ride to BODYCOMBATTM is a
designed and scientifically conditioning research from the rhythm of powerful fiercely energetic cardio
proven to strengthen the Penn State University, BODYBALANCETM/
music. The inspiring team workout inspired by
entire body. This 60- that strengthens and BODYFLOW ® is a Yoga,
coach leads the pack martial arts such as
minute workout tones the body. It hones in Tai Chi and Pilates
through hills, flats, Karate, Boxing, Tae Kwon
challenges all major on the torso and sling workout that builds
mountain peaks, time Do, Tai Chi and Muay
muscle groups by using muscles that connect the flexibility and strength.
trials and interval training. Thai. Supported by driving
the best weight-room upper and lower body. It’s Controlled breathing,
exercises, including ideal for tightening tummy Participants sweat and music and energizing
concentration, stretches,
squats, presses, lifts and and butt, improving burn to reach the instructors, participants
moves and poses to
curls. Great music, functional strength and endorphin high! strike, punch, kick and
music create an holistic
awesome instructors and assisting in injury KATA their way through
Due to its broad appeal workout that balances and
individual choice of prevention. CXWORX™ harmonizes the body,
calories to superior cardio
RPMTM attracts big fitness.
weights inspire bands are available from
numbers across all time- leaving participants
participants to perform lesmills.com/equipment.
slots. centered and calm. Attracts maximum
800 reps per class and to
get the results they came Due to its broad appeal numbers during peak and
Best practice suggests Due to its broad appeal
for – and fast! CXWORXTM attracts big shoulder times, weekdays
scheduling it 9 to 14 times BODYBALANCETM/
numbers across all time- and weekends. While it
Due to its broad appeal, through the week to BODYFLOW ® attracts big
slots. also works very well at off-
BODYPUMP® attracts big maximize attendance. numbers across all time-
peak times, performance
numbers across all time Best practice suggests slots.
Most clubs that have is dependent on
slots. Best practice scheduling it at peak or marketing and the
dedicated cycling studios Best practice suggests
suggests scheduling it a shoulder times once or convenience of timing.
offer 3 to 7 classes a day. scheduling
minimum of 7 to 12 times twice a day. Given the 30-
BODYBALANCE™ a
across the week to minute format, lunchtime DID YOU KNOW? Best practice suggests
minimum of 5 to 7 times
maximize attendance. classes are ideal. IT’S POSSIBLE TO scheduling
through the week.
Most clubs offer at least 2 CHARGE A BOOKING BODYCOMBATTM at least
DID YOU KNOW?
classes per day. FEE FOR RPMTM TO It’s very popular in the 5 to 7 times a week.
CXWORX™ CAN BE
BRING IN ANCILLARY morning, shoulder times
BODYPUMP® USED AS A FEE-BASED,
REVENUE IN THE and during weekends.
PARTICIPANTS VISIT 4.3 SMALL-GROUP
TRAINING PROGRAM. THOUSANDS PER
TIMES PER WEEK ON
MANY FACILITIES ARE WEEK.
AVERAGE VERSUS THE
INDUSTRY AVERAGE HAVING SUCCESS WITH
OF LESS THAN TWICE A THIS BOTH IN AND OUT
WEEK FOR NON-GROUP OF THE GROUP
EXERCISE CLUB VISITS. EXERCISE ROOM.

Simple dance moves with A fun, low-impact, whole- A cardio workout offering Using simple movements A sports-inspired cardio
chart-topping popular hits body workout that an addictive fusion of the on, over and around a workout for building
enable participants to improves fitness and core latest dance moves and height-adjustable step, strength and stamina.
shape up and let out their strength, using body hottest new sounds puts participants get huge High-energy interval
inner star – even if they’re weight, VIVETM tubes and the emphasis as much on motivation from popular training classes combine
dance-challenged! The balls for extra resistance. having fun as breaking a music and uplifting athletic aerobic
45-minute SH’BAM™ Great music, group sweat. Funky instructors instructors. Cardio blocks movements with strength
classes provide the interaction and a skilled teach participants how to push fat-burning systems and stabilization
ultimate fun and sociable instructor inspire move with attitude through into high gear, followed by exercises. Dynamic
way to exercise. participants to get fit for this 55-minute class. muscle-conditioning tracks instructors and powerful
life. that shape and tone the music motivate
Attracts maximum Attracts maximum body. participants toward their
numbers during peak and Attracts maximum numbers during peak and fitness goals.
shoulder times, weekdays numbers during peak and shoulder times, weekdays Attracts maximum
and weekends. Best shoulder times, weekdays and weekends. Can numbers during peak and Attracts maximum
practice suggests and weekends. While it perform strongly off peak shoulder times, weekdays numbers during peak and
scheduling SH’BAM™ 5 to also works very well at off- with a charismatic and weekends, shoulder times, weekdays
7 times a week. peak times, performance instructor and strong particularly mornings. Best and weekends. Can
is dependent on marketing. Best practice practice suggests perform strongly off peak
marketing and the suggests scheduling scheduling at least 3 to 5 with a charismatic
convenience of timing. BODYJAMTM at least 3 to times a week. instructor and strong
Best practice suggests 7 times a week. marketing. Best practice
scheduling BODYVIVETM suggests scheduling
at least 3 to 5 times a BODYATTACKTM at least
week. 3 to 7 times a week.
VIVE™ tubes and balls
are available at
lesmills.com/equipment

Whatever your goal and/or
vision - you need a great
team to help you get there.
A crucial factor in the
success of your programs is
the quality of the instructors
who teach them.
Great instructors drive
thousands of attendances
each year.


Partnering with Les Mills can help you
to:
• Build a brand that attracts new talent
• Develop the skills and better motivate
your team
• Ensure training and ongoing staff
education is relevant and up-to-date
• Guarantee quality and consistency to
your members and guests
• Keep your team engaged and inspired


 Massive BUZZ and interest in club during the 2 weeks building up to event
 Full focus from club team on common goals and interaction between sales,
customer experience and product departments – ‘Breaking down silos’
 Sold-out events and massive energy in clubs – all classes at 80 to 100% capacity
 Attendance: 5 to 10% membership
 20% guests per class
 50 to 70% conversion rate of guests
 Massive buzz post-event
 An increase of attendance in 2 to 3 weeks post-event of 10 to 20%


The LES MILLS™ Group Fitness
solution gives you free access to a
huge collection of valuable
marketing and promotional
resources. We are continually
working on new ways to help you
inspire your members and
prospects. Currently we’re
developing online tools, which will
allow you to customize material with
your own club logos and messages.


 WHY should your staff care about your
business and challenge themselves
every day?
 People need to be engaged in an
inspiring and meaningful purpose…


 “We are warriors in the battle against
inactivity and over-consumption.”
LMI Instructor Creed, 1998
 “Creating life-changing experiences every
time, everywhere. One class at a time,
one participant at a time.”
AIM manual
 “You have to find a way to make people
fall in love with fitness.”
Les Mills, 1968


Health and Fitness facility attendance has become the
biggest adult ‘sport’ in the Western world. Bigger than
football, tennis and golf combined.
But we have traditionally lacked the excitement and social
engagement of sports, and behaved more as gyms than as
true health ‘clubs’.
The faster we can change that, the bigger our future!


Growing Membership and Profit by Les Mills

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