New markets
irstly the good news: playing host to the biggest sporting event in the world next year is probably the greatest commercial and philanthropic opportunity we will ever have in our lifetime. I suspect that planning for this new market opportunity wasn’t top of many people’s agenda when we won the host nation title back in July 2005; however, I do suspect that it probably is now. From an industry perspective, it is an opportunity for us to crash through the 1214% market share glass ceiling evidenced in memberships, and demonstrate our relevance and value to the 50% of people who are not active enough to derive any health benefits. We also have the Department of Health promoting physical activity as a core element of their public health strategy, which according to health secretary Andrew Lansley is, “A radical plan to go further and faster in tackling today’s causes of premature death and illness and reduce health inequalities, with a public health service to make it happen … funding from the overall NHS budget will be ring-fenced for spending on public health – a recognition that prevention is better than cure. Early estimates suggest that current spend on areas that are likely to be the responsibility of Public Health England could be in the range of £4 billion.” This has also provided us with a green light to step outside the shadow of ‘12% fitness enthusiasts’ and enter a world where the emphasis is on prevention and the budgets are there for those who can prove that they could help the Government address their multi-billion pound problem. Let’s not also forget the Responsibility Deal as a catalyst which will allow us to sit at the top table with every single major food, drink, leisure and retail brand as an expert (as the ‘activity specialists’) and an equal. This has also included a number of pledges by the Physical Activity Network, including revised activity guidelines developed through the chief medical officer, promoting more active travel and activity in the workplace, along with tackling barriers to participation. And it gets better. Technology is evolving so fast that we now have mobile phone apps to help stimulate, motivate and excite exercisers and potential exercisers. There is also smart monitoring and analysis kit to tell us how successful (or unsuccessful)
we have been in adhering to our activity plans. Throw in an array of interactive multimedia technology and 2012 looks like the year that our industry will take a giant step forwards.
New markets, old problems? Although we do have the positive outlook which the 2012 Olympics/Paralympics and Government strategies have afforded us, there are still some issues that our sector needs to address, whether we choose to venture into these new markets or not. Namely, service and contracts. Despite a huge leap forwards in service since the days of the traditional golf or racquet club, can we really call ourselves a service-led sector? From the moment customers walk through our doors, are they faced by a smiling, welcoming, highly emphatic team? Is the service attentive, supportive and helpful – be it the membership sales team, the instructor team, the facilities/support team or even the management team? Even more compelling in terms of reaching out to new and untapped
According to Neil King, commercial director at Sports and Leisure Management, “The concept of membership contracts is quite old now. It stems from the old golf club mentality and was reinforced by sales trainers and business models of the 1980s.” However, for some, 12-month contracts are still more attractive than short-term ones. Creative Fitness Marketing CEO Dave Wright believes that contracts remain a viable option, as he says, “We need to focus on contracts being a good thing rather than a bad thing – if clubs support their clients all the way through and offer them engagement, then it’s worth their investment. If sold with integrity, contracts gain commitment and ensure people get results.” For me, the issue is not the length of the contract, but the intent behind it. If the 12-month contract is to tie someone into a guaranteed revenue stream and hope that they (a) do not use the service and/or (b) forget to cancel it, then I need say nothing more. But, if the contract underpins a more profound relationship between someone with hope and ambition and a specialist
Technology is evolving so fast that we now have apps to help stimulate, motivate and excite potential exercisers markets, is the question of whether we are welcoming to the inactive or those who don’t want to engage with us because we do not appear to offer anything relevant to them, particularly because our environment is perceived to be hostile or the service is deemed inappropriate. If we do not tick their boxes, then we need to amend our offers. Pay-as-you-go or flexible contracts are also a box we rarely tick but we have come to realise they should now, perhaps, be part of our offering to customers. Let us assume that every operator is honourable and has no intention of browbeating vulnerable consumers into entering a financial arrangement which they might regret at a later date, especially if their circumstances change. Are 12-month contracts designed for our benefit or for our users?
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who can help them realise those ambitions, then the ball game changes. Think of the relationship between a lawyer and their client, where every act, every word, every thought is billable, and an architect who will quote for a job but will draft, redraft and keep redrafting until the client’s dream is realised. In the latter analogy, the value proposition is understood by both parties and the contract is no more than a formal agreement to work together. fpb
David Stalker is the CEO of the Fitness Industry Association. For more information about the work of the FIA, visit www.fia.org.uk
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