Gemba Group consumer research highlights key questions for the fitness industry and points a way towards reducing member churn
The fitness industry has experienced waves of innovation and change over recent years – flexible payment options, female-only gyms, 24-hour access self-serve clubs, and franchised themed clubs such as Crossfit and F45.
But it seems that none of this has solved the gym sector’s constant problem – retaining members remains a huge challenge.
A recent industry study showed that 48% of gym members in Australia give up their membership within the first year. Churn is highest among younger gym members.
With a big proportion of the customer base churning in the first year, and just 63% of all members being retained each year overall in Australia, simply maintaining membership revenue – let alone growing – is a constant battle.
ATTRACTING AND RETAINING YOUNG GYM-GOERS
To explore the issue further, we looked at some of the behaviours and preferences of young gym-goers in Australia, and the barriers to gym membership cited by those that are not members.
Research by The Gemba Group reveals that cost is rated by all age groups as the number one barrier to gym membership. A requirement to commit as a member is the second-most cited barrier to gym participation – hence the emergence of lower-commitment pay-as-you-go models. (Inevitably these models may work against retention, but membership models that “lock consumers in” create a disincentive to sign up in the first place.)
Significantly though, younger people rate “Not having anyone to participate with” as a much more powerful barrier to gym membership than older people, rating it as the third most important factor after cost and commitment.
Clearly, creating a social experience within and around the gym membership could be an important aspect of attracting and retaining this younger segment.
For those younger people that are gym-goers, participation in other activities is heavily geared towards fitness activities – swimming, group exercise, hiking, running and yoga, with much lower overlap into organised sports. For most, gym workouts appear to be about general fitness and health, rather than complements to specific training programs aligned to participation in sports such as basketball, soccer, AFL, rugby or cricket.
This suggests two potential opportunities: can gym membership expand to incorporate more of the general fitness and leisure activities that young gym goers participate in – both within (e.g. swimming, yoga, dance) or outside the gym environment (running, cycling or hiking groups)? And can gyms and fitness clubs position themselves better as complements to team-based sport training programs, either in the off-season or pre-season, or as part of in-season cross-training or injury recovery?
But perhaps the most disruptive insight from our consumer research is that this younger segment has higher passion for entertainment experiences than for fitness or sporting pursuits. Although almost 60% of young Australian gym-goers say they are passionate about gym workouts, it’s movies and music that are the most widely-held passions among Australian 16-34 year olds.
Furthermore, and unsurprisingly, 16-34 year old gym goers are avid users of digital entertainment platforms.
Does this suggest an untapped opportunity to combine elements of entertainment and digital engagement with gym membership to attract and retain young people? (Think bundled movies or music streaming services included with gym membership, as one simple example.)
The retention problem is not new. Football and golf clubs have been wrestling with it, and have leveraged emotional connection, exclusivity, loyalty and social status to reduce churn.
For the fitness industry, in an era of hyper-competition for consumers’ attention, time and cash, some creative innovation may be required. Virgin Active, for example, brought a youthful brand, a sense of exclusive Club membership, a variety of activities and services, plus entertainment elements to the market.
But can gyms reimagine their offer for a new generation that enjoys fitness but hungers for even more social, entertaining and fun experiences? Flexible, low-commitment offers that deliver a strong social experience at the gym, touching on multiple fitness genres and building in links to broader entertainment passions of younger gym-goers may point to the way forward in reducing member churn.
Some questions for Fitness Industry executives on retaining young gym-goers:
- How can we create even more flexible, lower commitment products that alleviate barriers for the 16-34 segment?
- How can we create products that deliver a strong social experience at the gym, to attract and retain this segment?
- How can we incorporate multiple fitness genres within our facility, to increase engagement and keep young people coming back?
- Can we partner with the entertainment industry to deliver additional benefits as part of membership packages?
- How can we deliver an engaging digital experience to supplement physical participation in the gym?
- How can we create a more “sticky” proposition by delivering intangible benefits offered by other member-based organisations (e.g. AFL clubs, golf clubs)?