The Industry Ranks Its Growth Opportunities

In October, 1998, IHRSA asked industry leaders, both club managers and fitness suppliers, to prioritize their perceptions of the industry's growth opportunities. The survey asked respondents to rank nine growth opportunities in terms of their importance to the growth of their own clubs and in terms of their importance to the growth of the industry as a whole. The same survey was sent to both club industry leaders and fitness equipment company leaders, but they were tabulated separately.

RANKING THE OPPORTUNITIES

With respect to each opportunity, respondents could give one of five ratings: "1" = very important; "2" = important; "3" = neutral; "4" = not important; and "5" = of little interest. Respondents were not restricted in the number of opportunities they could assign a given rating. Thus, they could list three or four of the alternatives as very important or, conversely, they could state that any number of the alternatives were "of little interest."

IHRSA received 578 responses from club industry leaders. The results of the survey were as follows:

The top four opportunities listed by the club industry leaders were: 1) member retention; 2) Baby Boom market growth; 3) sales and service training; and 4) promoting the health benefits of exercise. These four opportunities were each regarded as "very important" by an average of 67% of all respondents. Membership retention improvement was identified as "very important" by almost 80% of the club leader respondents.

When the same survey was sent to the leaders of fitness equipment companies, a different picture emerged. Thirty-one fitness equipment company leaders responded as follows:

Both fitness equipment company leaders and club industry leaders assign high importance to growth opportunities such as deeper penetration of the aging Baby Boomer market, more extensive promotion of the benefits of exercise, and the growing importance of special populations programming. However, they place very different values on the importance of member retention, the significance of Gen X, and minority market development.

Clearly, the issue of improved membership retention is the most significant "disconnect" between how club operators and fitness equipment company leaders evaluate the same spectrum of future growth opportunities. Whereas for club operators membership retention is far and away the most important priority, it ranks a lowly 7th (of 9) among fitness equipment company leaders. Similarly, club operators attach much greater (400%) importance to Gen X market development than do fitness equipment company leaders. By the same token, fitness equipment company leaders attach twice as much impor- tance to minority market development as do club industry leaders.

DETERMINING THE INITIATIVES

As a result of the findings of this initial survey, industry leaders were again canvassed in November, 1998. In this survey, we focused on the top two choices of the Fitness Equipment Leaders and the top three choices of the Club Leaders. The purpose of this survey was to obtain insight into what specific initiatives IHRSA might undertake that would be maximally helpful to clubs in support of their own individual membership growth initiatives.

The alternative initiatives presented to industry leaders were based on the preferences and priorities that they had specified in previous focus groups and informal meetings.

In this survey, industry leaders were asked to rate specific tactical initiatives in terms of how helpful they would be in assisting them to maximize their own and the industry's growth opportunities. In this survey, a "1" rating meant that the proposed initiative would be very helpful. A "4" rating meant that it would "not be helpful at all." In this survey, respondents had to rank each proposal as either a 1, 2, 3, or 4.

The results of this survey, which was conducted for IHRSA by Axiom Research of Cambridge, Massachusetts, and for which there were 291 responses, were as follows. (A "Rating Average" of 1.00 would mean that 100% of the respondent had indicated that the initiative would be "very helpful.")

Membership Growth Initiative Rating Average

1. The Development of Bi-Monthly 1.35 Retention "Best Practices" Publication

2. The Development of Sales/Service 1.74 Strategies for Baby Boom Generation

3. The Development of Bi-Monthly 1.79 "Best Practices" Marketing & Sales Newsletter

4. The Development of New Sales 2.03 and Service Training Videos

5. Continual Updates on Benefits 2.08 of Exercise Research

6. The Development of New "Benefits of Exercise" 2.15 Flyers/Brochures

Considered from a different perspective, the results of the survey were as follows:

Membership Growth Initiative % of Members Giving The Initiative a "1" or "2" Rating

1. Development of Bi-Monthly 86% Retention "Best Practices" Publication

2. Development of Sales/Service Strategies 84% for Baby Boom Generation

3. Development of Bi-Monthly "Best-Practices" 79% Marketing and Sales Newsletter

4. Development of new Sales and Service 71% Training Videos

5. Continual Updates on Benefits of 68% Exercise Research

6. Development of New "Benefits of Exercise" 65% Flyers/Brochures

In short, all of these initiatives received substantial support from two-thirds of the membership or more. Initiatives related to assisting the industry with membership retention issues and with sales and service issues received the highest ratings.