Taking It To The Next Level Squash Ontario Annual General Meeting Saturday June 14, 2014 Presented by:

John Frittenburg The JF Group

General Physical Activity Environment

• Activity recognized as a positive health factor

• Clear link between fitness or sport activity and weight management

• There is now a defined health care cost reduction linked to an active population

• A healthy lifestyle is admirable – even “cool”

Consider Societal and Leisure Trends

• Aging population

• Lack of free time

• Move toward unstructured activities

• Diversity – ethnic, multi-generational, etc.

• Competing priorities for disposable income

Where the Industry is Going

• Self scheduled programs

• Focus on individual or small group activities

• Self directed learning

• Holistic wellness into fitness programs

• Home or outdoor focus

• Be environmentally friendly

• Offer a quality experience every time

• Must provide valued benefits

Thoughts from Milner re: 50+ Market

CEO - International Council of Active Aging

• Functional solutions to stave off physical deterioration

• Health and lifestyle coaching

• Medical and alternative therapies

• Outreach – take your services to them

• Fall prevention

• Engagement and fun – not sweat and burn

A combination of US and Canadian IHRSA Data

A Decade of Steady Member Growth

1999 2000 2001 2002 2003 2004 2005 2006

But Now - More Turbulent Times

2007 2008 2009 2010 2011 2012

-3%

10%

0%

11%

2%

-3%

People have Choices and Sectoral

Lines are Blurred

0%

5%

10%

15%

20%

25%

30%

35%

Multi-Purpose Fitness Only YMCA Munic/N-F-P Corporate

25% 32% 22% 29%

7%

Market Share by Sector 2012

Year Over Year Club Usage is Fluid

2007 2008 2009 2010 2011 2012

90

101 102 98 104 99

Average Attendance - Days per Year

More than 4 of 10 Members are Core

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2007 2008 2009 2010 2011 2012

39% 45% 42% 44% 47% 44%

Core Members (100+ Days per Year)

Longer Term Members = More Club Use

0

20

40

60

80

100

120

140

2011 2012

70 79

108 104

140

115

137

123

104 99

Average Attendance - Days per Year

1 Yr

2 - 5 Yrs

6 - 9 Yrs

10 Yrs

Average

Motivation to Join a Club

0% 10% 20% 30% 40% 50% 60%

Get/stay healthy

Overall well being

Convenient location

Equipment variety

Reach fitness goals

Fun environment

Exercise classes

Financial obligation

Friends

Access fitness prof.

Socialize

57%

57%

53%

47%

40%

30%

20%

19%

18%

16%

12%

Why People Join and Stay

Motivation to Leave a Club

0% 5% 10% 15% 20% 25% 30% 35% 40%

Too expensive

Not using facility

Free alternative

Not convenient

Too crowded

Felt out of place

Injury

Interests changed

Job loss

Goals changed

No instruction

Too intimidating

No friends at facility

Met goals

37%

33%

23%

17%

12%

10%

8%

8%

7%

5%

5%

4%

4%

3%

Why People Quit

Data from the Canadian Health Club Report

Club Membership Levels 2011 - 2012

All Fitness Only Multi-purpose Multi-club Independent

-1.3% -2.2%

0.8%

-2.5% -1.8%

Retention Rates - 2011 to 2012

All Fitness Only Multi-purpose Multi-club Independent

71.6%

65.6%

73.6% 74.3%

70.0%

Source of Revenue - 2012

Dues 68%

Personal Training

10%

Other 22%

Cost Structure – as % of Revenue

Payroll 45%

Other 35%

Net Income 20%

Payroll as % of Revenue

All Fitness Only Multi-purpose Multi-club Independent

45% 35% 48% 44% 46%

• Differentiating your value proposition;

• Serving internal customers; and

• Appealing to external customers

What Makes You Different

• Remember why people join and stay

• Affirm your niche family friendly, adults, older audience

junior programming and instruction

competitive, social

multi-faceted facility and programs

• Focus on being the best in your “club class”

What’s Your

Growth Strategy

Increase market penetration – attract a larger proportion of current participants

Market expansion – cultivate new participants (non-players or the inactive market)

Product expansion – create new products or services (new program types)

Diversification – develop different delivery mechanisms (outreach for example)

Internal and External Customers

• Internal – existing members and staff focus on meeting members’ expectations

make staff part of the solution

create a sense of community

• External – non members and potential partners marketing vs. advertising

become part of the community

become the go-to place for your specialty

It’s All About

RETENTION

Top quality customer service is now a must

Consistency is expected

Strive to delight – preplan small surprises

Always deliver what you promise

Questions or what ever else is important to you!!!

It’s been a pleasure