the evolution of a health club member

8/3/2019 The Evolution of a Health Club Member

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Kym Wimbis owns and operates the Access FIT blog (http://accessfit.typepad.com), an essentialresource for health, fitness, wellness, leisure, sports, and recreation businesses. Kym hasundergraduate degrees in Exercise Science and Law and a Masters degree in exercise prescription

for special populations, combined with over a decade of professional-industry experience incommercial, community, university, and corporate settings. Kyms education, frontline andmanagement experience, practical problem-solving approach, and commitment to innovation andcontinuous improvement have motivated his important ongoing contributions to strategic businessdevelopment.
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ContentsINTRODUCTION 4THE HEALTH CLUB MEMBER EXPERTISE CURVE 5

MEMBER EVOLUTION... FROM SURVIVING TO THRIVING 6The Beginner Stage (Survival Zone) 6The Intermediate Stage (Expansion Zone) 8

The Advanced Stage (Consolidation Zone) 9

THE CONTRIBUTION OF MEMBER EXPERTISE TO BUSINESS VALUE 10SURVIVAL OF THE FITTEST IS NOT A RETENTION STRATEGY 13IMPLICATIONS OF THE EXPERTISE CURVE FOR OWNERS AND MANAGERS 14

Structure the business (physically, organizationally, and culturally) around the members evolutionaryprocess 14

Target health club members higher on the expertise curve for acquisition 15

Implement specific strategies to accelerate beginners up the expertise curve 15

Apply specific strategies to each members stage of evolution 16

Match the customers experience to his or her stage of evolution 16

Employ strategies that enable the identification of, and facilitate access to, at-risk members 17

Allocate resources for maximum returns 17

Evaluate the efficacy of existing strategies in the context of member evolution 17

Develop products, services, and programs that target members evolutionary stages 18

Develop policies, procedures, protocols, and practices that target members evolutionary stages 18

Manage the interactions between beginner, intermediate, and advanced health club members 19

Be strategic about the mix of expertise within the health club 19

THE MISSING LINK 20NOW WHAT? 21


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IntroductionIn his seminal 1859 book On the Origin of Species, renownedEnglish naturalist Charles Darwin introduced the world to hishighly controversial theory of evolution predicated on theprinciple of natural selection. Darwins theory later becamewidely known as Survival of the Fittest(the phrase was actually

coined by one of Darwins contemporaries, Herbert Spencer), aterm that Darwin adopted as a synonym for natural selection inthe fifth edition of On the Origin of Speciessome ten years later.History tells us that Darwins inclusion of the term Survival of theFittesthindered rather than helped illuminate the central tenetsof natural selection but enough about Mr. Darwin.

The term Survival of the Fittest is, however, entirely appropriateto describe the prevailing strategy of health, fitness, andwellness business owners and managers when it comes tomember acquisition and retention.

Certainly much has been said and done in the name of member retention over the years.Dishmans early examination into exercise adherence revealed that 50% of exerciseparticipants drop out within six months. Subsequent studies confirmed Dishmans findings in avariety of exercise settings (clinical, community, and commercial). In order to further explain thedropout phenomenon, a number of researchers have applied specific psychological andbehavioral theories and frameworks to the exercise context. However, despite many decades ofeffort an enduring solution to the retention problem continues to remain elusive.

Of course, industry associations, publications, consultants, and pundits have all proffered theirown solutions to the retention problem. Unfortunately, many so-called retention strategies aresimply variations of the same old industry platitudes that have been around for years. We needto improve our customer service We need the latest group exercise class We need tomake sure this place is spotless We need to be more competitive on price

Most conventional retention (and acquisition) strategies are unsuccessful because they fail toaccount for the significant differences in expertise between members (and prospectivemembers) and the implications of those differences to the members health club experience.The truth is that most retention strategies simply apply generic tactics equally andindiscriminately to all members, regardless of need. Customer service is a prime example.Exemplary customer service for one member can be an unwelcome annoyance for anotherdepending on his or her level of expertise.

If we apply Darwins thinking on evolution to member acquisition and retention we can see thatnot all members are created equal some are more highly evolved than others are. Membersneeds, expectations, and values vary considerably according to their stage of evolution. And,equally important, some members are more valuable than others are (for a variety of reasonswhich will be discussed), based on their stage of evolution.


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The Health Club Member Expertise CurveWhen we plot the evolution of a health club member from novice (beginner) to expert(advanced), it resembles Figure 1. The acquisition of expertise over time follows an S-shapedcurve (sigmoidal, for the technically minded) starting low, increasing slowly, then suddenlyincreasing quickly for a defined period until finally leveling off and continuing to increase, but ata more moderate rate once again.

The rate of acquisition of expertise varies depending on a number of factors corresponding to

the members stage of evolutionary development. For example, early-stage beginners requireconsistent, ongoing, positive reinforcement from club staff; without it, they are extremelyvulnerable. Early-stage beginners who are deprived of the necessary positive reinforcementprogress poorly and are at high risk of dropout. Intermediate and advanced health clubmembers require less positive reinforcement from club staff because they have betterdeveloped internal motivation (based on their previous successes) and better access to positivereinforcement from their peers. However, it is typical for health club staff to spend adisproportionate amount of time with intermediate and advanced members who tend to be morecomfortable (and social) in the cluba critical misallocation of resources that invariablycontributes to member attrition and adversely impacts the clubs bottom line.

The ability of the health club to match their members (based on their stage of evolution) with theappropriate experience is essential. Providing beginners with an intermediate experience willlead to dropout. Forcing advanced health club members to suffer through the beginner orintermediate experience will lead to dissatisfaction and defections. Treating intermediates likebeginners or advanced health club members is certain to impede their rapid progress.Therefore, understanding a members evolutionary process is imperative to managing memberacquisition and retention.

Low

High

E

xpertise

Time

Beginner (Survival Zone)

Intermediate

(Expansion Zone)

Advanced(Consolidation Zone)

BusinessV

alue

High(Profit)

Low(CashFlow)

Figure 1. The Evolut ion of a Heal t h Club Member


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Member Evolution... from Surviving to ThrivingIt is generally understood that there is a range of expertise within any given membership base.In fact, the range of expertise has actually expanded quite significantly, given the industrysmore recent efforts to broaden its markets. The gap between the least and the most expertmembers within a health club is greater today than ever before.

Most owners, managers, and staff can, fairly intuitively, identify beginner, intermediate, andadvanced health club members. Typically, these determinations are based on a number ofindicia, including a members physicality, technical proficiency, understanding and use of

jargon, and the quality, frequency, and type of interactions with others (members and staff).

In an attempt to accommodate the increasing range of expertise, many businesses do offersome, albeit ad hoc, beginner, intermediate, and advanced options to their members.However, because owners and managers dont fully comprehend the critical importance oftheir members evolutionary process, most attempts to appeal to the full range of expertisewithin the club are typically unsuccessful.

Beginner, intermediate, and advanced health club members are fundamentally different. Theirneeds, expectations, and values are fundamentally different. Their health club experience isfundamentally different. Only by understanding a members evolutionary process canbusinesses effectively manage these fundamental differences.

The Beginner Stage (Survival Zone)Initially, the early-stage beginner has very low expertise. In evolutionary terms, the early-stagebeginner is equivalent to an amoebaan unsophisticated, fragile, extremely vulnerable life formthat requires constant encouragement, support, and a highly stable environment to survive.

Early-stage beginners require ongoing attention if they are going to survive long enough tosuccessfully evolve to the next stage of development.

The early-stage beginner isextremely emotion-driven (fear,anxiety, apprehension); he or she ismost interested in surviving, notthriving. Beginners care more aboutavoiding the mirrors, not looking toostupid, keeping out of the way of thereal members, and trying to fit in

than they do about the latestequipment, programs, and classes.

Beginners are inadaptable. Their health club experience is something that happens tothem andthey feel like they have very little control over it. Consequently, to a beginner, failure is seen notas a personal failure, but as a failure of the health club. Beginners take a passive role in theirown experience because they lack the requisite expertise to modify their health club experience


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in any meaningful way. For example, if a piece of exercise equipment is out of order, theycannot reliably substitute another for it. It provides them with one more reason to feelincompetent and out of place. Beginners require consistency, simplicity, continuity, and stabilityto overcome their lack of adaptability.

Beginners are extremely self-focused, hyper-aware, and hypersensitive. As a result, beginnerscan find a hundred reasons to leave. I am not sure what I am doing I feel like everyone islooking at me No one helps me Everyone else is so much better than me I am not

making any progress No one cares about me Its always crowded and confusing Noone is very friendly Beginners will not survive in a hostile environment. Moreover, beginnerswill rarely, if ever, articulate their concerns. Therefore, it is up to the health club to understandand anticipate their various fears, anxieties, and apprehensions and put strategies in place toovercome them beforethey arise.

Beginners tend to focus on what they dont know andwhat they cant do, especially in comparison to others.As a result, they are likely to feel inferior, isolated, andincompetent. Understandably, they will not toleratefeeling inferior, isolated, incompetent, vulnerable, outof place, exposed, abandoned, intimidated,overwhelmed, or unwanted indefinitely (even if theyhave paid good money for the privilege). Beginnershave a lot to learn and a relatively short time to do it ifthey are going to be retained as members. Most healthclub attrition occurs at the beginner stage, particularlythe early-beginner stage. In fact, some researchindicates that as many as 42% of new members dropout within the first 30 days of joining.

Beginners are low on the food chain and they know it. Their expertise improves slowly, from theearly stage to the late stage of development, as they become increasingly familiar with thetechnical (understanding proper technique, using equipment, sets, reps, rest periods, programsplits, warm-up, cool-down), social (confidence in interacting with others, spotting others,working in, respecting personal space), psychological (feelings of belonging, self-confidence,self-esteem, self-efficacy), and cultural (understanding formal and informal codes of conduct,dress standards, jargon, etiquette, and other club norms) aspects of the club.

Despite their best (albeit limited) efforts, most businesses are far from beginner friendly.Owners and managers simply do not fully understand the beginner experience (because of theirown high expertise). It should not be too surprising, therefore, that most attrition occurs duringthe beginner stage of the evolutionary process. However, very few owners and managers haveadapted their businesses to the needs, expectations, and values of the low-expertise member,preferring instead to try and fit (or, more accurately, force) their low-expertise members intotheir existing model which is heavily geared to their high-expertise members.

It should be clear that the beginners journey is a particularly perilous one; therefore, anyserious retention strategy requires a direct focus on moving members efficiently and effectivelyfrom the early-stage beginner to the intermediate stage of evolution.

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The Intermediate Stage (Expansion Zone)Over time, the beginner is able to aggregate, consolidate, and understand the fundamentaltechnical, social, psychological, and cultural aspects necessary to survive in the health clubenvironment. Once this occurs, their accumulated expertise moves them from the late-stagebeginner (past the first critical inflection point) to the early-stage intermediate. In evolutionaryterms, early-stage intermediates are equivalent to lungfish; they have found their feet and arewilling, and able, to explore new territory. It is no longer simply about survival for the

intermediate health club member; its about expansion, exploration, experimentation, andexpediting progress.

Intermediates experience a period of rapid progress (physical, psychological, and social). Theirintrinsic motivation begins to develop as their expertise increases. They no longer require theclose attention or supervision from staff that they did as a beginner. They are increasinglyautonomous, preferring to modify and develop their own training programs (often informed bytheir peers). It is typical for intermediates to abandon their exercise program cards becausethey associate them with less-experienced beginners.

Intermediates begin to get increasing recognition in the club (from staff and other health club

members) because of their consistent attendance, increasing confidence, and highlyconspicuous progress. Based on initial successes, intermediates will begin to exploreadditional means to expedite their progress, such as trying new equipment/exercises/classes,purchasing training aides (e.g., gloves, straps, belts, apparel), and taking nutrition supplements.

As a result of their newly acquired status and training progress, intermediates are increasinglyconfident (very often overconfident). They begin to explore more advanced techniques,increase their training intensity, increase their training volume, increase their training frequency,and often become vulnerable to overtraining and injury. Obviously, intermediate members whodo experience extended periods of overtraining or injury become disenchanted, de-motivated,and very dissatisfied. Intermediates need an experienced instructor they respect who can

temper their enthusiasm with common sense and sound scientific training principles.

Intermediates are in the sweetspot of their trainingexperience. They are makingprogress, they are enjoyingtheir newly acquired status,they have begun to assumeresponsibility for their owntraining experience, they wantto be in the health club, and

they are willing to spend onancillaries to expedite theirprogress.

See no evil, speak no evil, hear no evil.



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The Advanced Stage (Consolidation Zone)Eventually, the intermediates rapid progression begins to plateau and the late-stageintermediate moves (past the second critical inflection point) into the early-stage advancedphase of development. Progress slows to a more modest rate, but by now the health clubmembers evolution is almost complete. In evolutionary terms, the early-stage advanced healthclub member is equivalent to early manhe or she has the confidence, competence, andexpertise to control their health club experience. They are the masters of their domain and they

are looking to consolidate their position at the top of the food chain.

Advanced health club members have taken full responsibility for, and have complete controlover, their training experience. They are highly evolved and have all the necessary skills andknowledge to continue their progress with minimal investment from the heath club. In fact,advanced health club members often share their expertise (e.g., offering advice on technique,programming, nutrition, supplements, injury prevention, and management) with other healthclub members and staff. Their collective contributions actually increase the overall expertise ofthe club. Advanced health club members also play an inspirational/aspirational role to othermembers, particularly intermediate members. Many intermediates will try to emulate the feats oftheir more accomplished peers, seek their counsel, and benefit from their experience.

Advanced health club members are willing to spend on ancillaries, but unlike intermediates,they have developed strong preferences based on personal experience. Therefore, they aremore likely to remain loyal to their brand preferences over the health club in the event that thehealth club doesnt have their brand at the right price.

The advanced health club member is more interested in function over form; old equipment thatstill does the job is preferable to shiny new equipment that does not. These members approachtheir workouts in a very workman-like fashion. They like to be as efficient and effective aspossible. They become frustrated with having to wait for equipment tied up with intermediatesdoing endless trisets, supersets, and dropsets, or oblivious beginners chatting while sitting onequipment. This frustration can manifest as irritation, impatience, annoyance, or intolerance.

These negative feelings can be interpreted by beginners (who are self-focused, hypersensitive,and hyper-aware) and intermediates (who often are seeking the approval of advancedmembers) as aggression and can create a negative, even hostile, training environment.Interestingly, advanced health club members are much more forgiving of other advanced healthclub members monopolizing equipment because they recognize that they are just doing their

job too. Advanced health club members are all about getting the job done and anyone, oranything, that gets in their way is not well tolerated.



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The Contribution of Member Expertise to Business Value

It should be obvious by now that not all members are created equal. The corollary of that is thatnot all members contribute equal value to a business. If we accept the fundamental propositionthat, for customers, Value = Benefits/Price, we can examine the differential value that beginner,intermediate, and advanced health club members deliver to a business. A high-valuemember isone who pays more (doesnt seek discounts, spends on ancillaries, renews their membership),consumes fewer resources, and contributes positively to the clubs culture/brand. A low-valuemember is one who pays less (seeks discounts or buys primarily on price, doesnt spend onancillaries, doesnt renew their membership), consumes more resources, and doesntcontributeor contributes negativelyto the clubs culture/brand.

Almost without exception, beginners are the lowest-value members for any health club (theywant more benefits at lower prices, which represents high value for them but low value for thehealth club). They are the least financially committed, consume the most resources, andcontribute the least to the clubs culture/brand. Beginners are hoping for the best, but expectingthe worst. Despite how they present at the health club (e.g., excited, enthusiastic, motivated,willing), they almost certainly have a risk-mitigation mindset in place. It is understandable, ofcourse, no one wants to waste their valuable time, effort, and money. Therefore, beginners willemploy one, or more, risk-mitigation tactics to hedge against their anticipated failure. Theserisk-mitigation tactics invariably make beginners less valuable to the health club thanintermediate or advanced members.

Beginners are extremely price sensitive. They dont know exactly what they are looking for in ahealth club so they focus on price as the key differentiator. Thus, beginners will wait fordiscounted prices, negotiate discounted prices, or shop around for the cheapest prices beforecommitting to join up (they are anticipating failure so why pay top dollar?). In the alternative,beginners are most likely to purchase low-commitment memberships (i.e., short-term or month-to-month contracts). Moreover, beginners are most likely to drop out (for a variety of reasons).In fact, many will drop out long before they are even profitable for the club (when staff,administration, marketing, and other acquisition costs are taken into consideration).

Beginners consume the most resources. They require more staff time and attention in terms ofinstruction, assessments, programming, ongoing positive reinforcement, and explanation ofpolicy/procedures (e.g., time freeze, cancellation policy, class sign-in procedures). Beginnerseven consume more physical resources, including program cards, pens, pencils, and erasers.


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Beginners contribute the least to the clubs culture/brand. Beginners are far too focused onthemselves to contribute significantly to the club. Their lack of expertise means that beginnershave very little to contribute. They cannot assist other members competently, they spend a lotof time looking dazed and confused, they often appear uncomfortable and out of place, andthey tend to get frustrated and complain more than other members (although frequently withgood reason). Because beginners rely so heavily on the health club for their success, anyperceived failure (small or large) is generally attributed not as a personal failure, but as a failureof the club. Therefore, dissatisfied beginners can generate significant negative word of mouth

both inside and outside of the club. From a business-value perspective, think of beginnersprimarily as Cash Flowmembers. They contribute to the top line (revenues), but not necessarilyto the bottom line (profits). In general, beginners pay less, spend less on ancillaries, consumethe most resources, contribute the least to the clubs culture/brand, and are most likely to dropout. They are a high-risk, low-reward propositionunless and until they can be evolved up theexpertise curve into intermediate and advanced members.

Intermediates have acquired sufficient expertise to begin to exert control over their health clubexperience and take responsibility for their own successes and failures. Increased expertisealso allows intermediates to reduce their consumption of club resources and begin to contributepositively to the clubs culture/brand. Based on their initial successes (physical, psychological,and social), intermediates are increasingly likely to purchase ancillary goods (supplements,gloves, belts, apparel) and services (personal training, boot camp). Intermediates also have amore complete understanding of what they want in a health club and are therefore less likely tofocus on price as the key differentiator, commit to longer-term (more profitable) membershipoptions, and are less likely than beginners to dropoutat least as long as they keepprogressing. However, as previously discussed, intermediate health club members present theirown unique set of challenges (and opportunities). For example, intermediates requireinstructors who are higher in expertise than they are. Even though intermediates require lessdirect supervision, only expert instructors are able to successfully manage their potential forovertraining and injury, which invariably impedes their progress.

Advanced health club members know exactly why they join a particular health club (its a highlyconsidered decision that is not based primarily on price) and they have years invested in theirtraining. Therefore, they are far less likely to drop out than beginners or intermediatesunlessyou give them a reason. Think of advanced health club members as high-value, Profitmembers. The more you have and the longer you can keep them, the more profitable youll be.

Consider the differential value of high-expertise and low-expertise members in the context ofMember Lifetime Value (MLV). MLV is the total profit generated by a member over his or herentire, aggregate, membership term. Effectively, the longer the member stays and the more amember spends, the greater the MLV. We know that low-expertise members cost more toacquire, consume more resources, contribute less to the clubs culture/brand, and are the mostsusceptible to early dropout. Low-expertise members represent a low MLV. High-expertisemembers cost less to acquire, consume fewer resources, contribute positively to the clubsculture/brand, and are most likely to continue their membership. High-expertise membersrepresent a high MLV. Therefore, all things being equal, the higher the expertise of a member,the higher his or her MLV. In fact, MLV is significantly higher for high-expertise members incomparison to low-expertise members. Consider the following example, of a typical high-expertise and a typical low-expertise member:


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Member A is an advanced health club member. He has been training at a competitors healthclub for several years, but has become bored. He walks into the club, looks around on his own(because he knows what hes looking for), has a casual conversation with a couple of members,and within ten minutes has decided to join. He has been doing his own programs for some timeand intends to keep doing so; therefore, he is not too concerned about how good the instructorsare. He approaches a front desk staff member and asks what a twelve-month term membershipcosts and, after discovering the price is essentially the same as his old health club, joins up onthe spot.

Member B is a beginner. He has never been a health club member before but has wanted tolose weight for a while. He received a flyer from a health club promoting a No Joining Feespecial on month-to-month contracts (the promotion cost the club $1000 and nets 200 newmembers for an acquisition cost of $5/new member). So he calls up to book a salesconsultation. After the sales tour, he is impressed with the facility, but is concerned that he isthe only out-of-shape person he has seen and everyone else seems to know what they aredoing. He eventually agrees to the month-to-month special (despite the salespersons bestattempts to up-sell him) because he doesnt want to commit to a bigger financial obligation inthe event that he stops coming. He returns the next week for his assessment and program andis shown through his exercise program. After a few sessions on his own, he hasnt lost anyweight, loses motivation, feels ignored, and when his month has expired, he doesnt renew(42% of new members drop out within the first 30 days).

MEMBEREXPERTISE

MEMBERSHIPTYPE

MEMBERACQUISITION

COSTS

OTHERDIRECTCOSTS

AGGREGATEMEMBERSHIP

TERM

ANCILLARYSPEND

MEMBERLIFETIME

VALUEHigh 12 Month Term

$480/Year + $99Joining Fee

Nil(Walk in)

Nil 36 Months

($1539)

Sports drinks,gloves,

supplements,apparel

$500/Year($1500)

$3039

Low Month-to-Month

Contract$45/Month

Marketing

cost/newmemberacquired $5;

WaiveJoining Fee $99;Sales tour and

consultation 0.5hours @$15/hour(-$12.50)

Assessment

and program1.5 hoursinstructor time@ $15/hour;

Program card,pencils, pens

$1

(-$23.50)

1 Month

($45)

Nil

$9

The MLV of the high-expertise member is $3039, whereas the MLV of the low-expertisemember is only $9 (when acquisition and other direct costs are taken into account). In other

words, the high-expertise member is worth more than 300 low-expertise members based onMLV. And that doesnt take into account the positive contributions the high-expertise membermakes (providing referrals, spotting other members, offering advice) and the negativecontribution the low-expertise member makes (negative word of mouth). It becomes veryobvious very quickly that not all members are created equal and that not all memberscontribute equal value to a business.


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Survival of the Fittest Is Not a Retention StrategySurvival of the fittest is the default mode of every health clubsmall or large, independent orfranchised, local or multinational. If the health club member is good enough (confident enough,knowledgeable enough, experienced enough, expert enough), he or she will survive regardlessof the health clubs retention efforts (or lack thereof). Inevitably, the strong do survive. Ofcourse, when only the strong survive a hell of a lot of members are left dead in the water.

Owners and managers, almost universally, underestimate the extent of their members relianceon the survival of the fittestphenomenon in their business. The primary reason for this criticaloversight is an excessively optimistic assessment of the efficacy of their existing memberacquisition and retention strategies.

Remember when all else fails survival of the fittest prevails.

It happens a lot more than owners and managers are willing to admit. When specific memberacquisition and retention strategies dont perform as well as expected (or sometimes not at all),members are forced to rely on their own survival instincts. Unfortunately, beginners and early

intermediates have poorly developed survival instincts. Without appropriate, stage-specificinterventions, beginners and early intermediates (who account for the majority of attrition inmost health clubs) are at high risk of dropout. Simply stated, beginner and early-intermediatehealth club members that do not receive adequate support from the club are highly likely to dropout.

Late-stage intermediate and advanced health club members have better developed survivalinstincts. They dont necessarily require specific interventions from the health club to survive.However, because more advanced members have a clear understanding of their own specificrequirements, they do require that a business demonstrate a deep understanding of theirneeds, expectations, and valuesbeyond mere survival. These members are looking for a

health club where they can thrive.

Understanding the evolutionary process of health club members is essential for their retention.Survival of the fittestsimply doesnt work for members low on the expertise curve, and withoutdedicated strategies and tactics to acquire and retain these low-expertise members, retentionwill remain a significant and ongoing challenge.


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Implications of the Expertise Curve for Owners and ManagersMost owners and managers understand, at least on somelevel, that beginner, intermediate, and advanced health clubmembers are fundamentally different. Some even make anattempt, however perfunctory or ad hoc, to cater to differingexpertise levels among their members (e.g., beginner group

exercise classes, pin-weight machines for new resistancetrainers, technique illustrations posted on the wall for newmembers).

However, the unique characteristics of low-expertise andhigh-expertise members demand that owners and managersdevelop and implement a broad range of strategies thatdifferentially, and comprehensively, target each segment. Anymember acquisition or retention strategy that ignores themembers evolutionary process will under-perform (at best),fail completely, or (at worst) actually exchange more-profitable members for less-profitable members.

Businesses that can demonstrate a comprehensive understanding of their membersevolutionary process will have a significant competitive advantage over those that cannot.Therefore, owners and managers must strategically leverage their understanding of theirmembers evolutionary process in the following ways:

Structure the business (physically, organizationally, and culturally) around themembers evolutionary processThe continued expansion of the health, fitness, and wellness industry has required a significantshift away from well-established markets (strength/physique enthusiasts, athletes, and thealready fit) to include newer, less accessible, markets (the deconditioned/overweight, thesporadic/infrequent trainer, the health/wellness trainer, and special needs trainers). The biggestchallenge for owners and managers today is to effectively meet the disparate needs,expectations, and values of these markets. However, most businesses have not sufficientlyadapted their thinking from servicing their traditional markets (high on the expertise curve) toservicing these newer markets (low on the expertise curve).

Most existing strategies to accommodate low-expertise members dont go nearly far enough forthree primary reasons: (1) owners and managers dont fully understand low-expertise members

because of their own high expertise; (2) traditional, established, markets have been relativelyhigh expertise, and so the industry has been historically geared to the needs, expectations, andvalues of the high-expertise member; and (3) low-expertise members are, generally, morechallenging and more expensive to service. The result is the kind of ad hoc tactics employed bymany businesses that ultimately have little or no impact on member acquisition or retention.


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However, to be successful, owners and managers must acknowledge that beginner,intermediate, and advanced health club members are fundamentally different asfundamentally different as an amoeba wanting survival, a lungfish wanting expansion, and earlyman wanting consolidation at the top of the food chain. Therefore, the business must bestructured physically (layout, design, workflow, adjacencies), organizationally(management/organizational structure, staff functions/roles, incentives/remuneration), andculturally (policies, procedures, processes, formal and informal rules) to support the membersevolutionary process.

Target health club members higher on the expertise curve for acquisitionMember retention begins with member acquisition. This is soimportant it is worth repeating: member retention begins withmember acquisition. Indiscriminate take-all-comers acquisitionstrategies (especially deep discounting) inevitably lead to thedisproportionate acquisition of beginner and early-intermediatehealth club members (who are mitigating their risks). Thesemembers are more costly to service, add the least to the club,

and are the most likely to drop out. Furthermore, an excess ofbeginner and early intermediate health club members can be asignificant contributor to advanced member dissatisfaction anddefections, effectively sacrificing more-profitable members (highMLV) for less-profitable members (low MLV). Health clubmembers higher on the expertise curve have more firmlyestablished needs, expectations, and values and will only join aclub that is capable of demonstrating its ability to meet, orexceed, them. Therefore, acquiring these members requires morethan indiscriminate discounting.

If owners and managers did nothing else but increase the proportion of advanced health clubmembers and, correspondingly, reduce the proportion of beginner and early intermediate healthclub members, the impact on retention, revenue growth, and profitability would be significant.

Implement specific strategies to accelerate beginners up the expertise curveFew beginners survive the journey to become intermediate and advanced health club memberswithout significant effort from the health club. Remember that as many as 42% of new membersdrop out within the first 30 days of joining. Even though they are more costly to service, it is inthe health clubs best interest to accelerate their members up the expertise curve, because the

longer beginners remain low on the curve, the more they will continue to cost the club and themore likely they are to drop out.

Despite their best intentions, very few health clubs have the capacity (i.e., products, services,programs, policies, procedures, or protocols) to effectively and efficiently move beginners upthe expertise curve. Instead, these members, with few exceptions, are left to flounder at the



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bottom of the curve until they can, eventually, make their own way up the curve or they becomedisenchanted with their lack of progress, actively seek to cancel their membership, or passivelyallow their membership to lapse. To compound the problem for owners and managers,departing beginners are typically replaced with newly acquired beginners and the process isrepeated ad infinitum.

Apply specific strategies to each members stage of evolutionBeginner, intermediate, and advanced health club members join for different reasons, leave fordifferent reasons, and stay for different reasons. Indiscriminate, untargeted, and ad hocacquisition and retention strategies yield mixed results at best. Every business needs specificbeginner, intermediate, and advanced member strategies. For example, the low-price businessmodel attracts beginners by appealing to their need to mitigate risk. Low prices mean low risk,even if they do ultimately fail. Alternatively, Curves Fitness has developed their valueproposition specifically around the beginner (low-expertise females) by providing a less-intimidating experience (no men, no mirrors, uncomplicated equipment, intimate training area,high instructor availability). Therefore, Curves appeals to women who are less concerned aboutmitigating their financial risk but who are concerned with mitigating their social risk (i.e., feeling

intimidated, out of place, ignored, abandoned). Both are legitimate beginnerstrategies.

Match the customers experience to his or her stage of evolutionThe experiences of beginner, intermediate, and advanced health club members arefundamentally different. The beginner experience is filled with apprehension, self-doubt, anxiety,confusion, and intimidation. They want to survive. They are thinking in terms of their ownsurvival. Show beginner health club members how you can help them survive. For example,Curves has no mirrors, which tend to intimidate many beginners.

The intermediate experience is filled with exploration, experimentation, and expediting progress.They want to expand. They are thinking in terms of how they can expedite their progress. Showintermediate health club members how you can help them expand. For example, intermediateswill only respect the views of those who are demonstrably more accomplished (bigger, stronger,fitter, more coordinated). Inexperienced instructors are generally not viewed by intermediates asbeing able to expedite their progress.

The advanced experience is filled with competence, confidence, and control. They want toconsolidate. They know what they are doing and they just want to get it done. Show advancedhealth club members how you can help them consolidate. For example, advanced health clubmembers get frustrated with having to find enough weights during their session.

Beginner, intermediate, and advanced health club members need, expect, and value differentexperiences. Most businesses provide the facilities and allow their members to create their ownexperiences. However, member experiences are far too important to be left to chance.Businesses that can best match the customers experience to his or her stage of evolution willhave a significant competitive advantage in an increasingly competitive marketplace.


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Employ strategies that enable the identification of, and facilitate access to,at-risk membersKnowing that a specific group of members are at risk of drop out is only useful if they can beeasily identified, accessed, and suitable interventions put in place to militate against theirsusceptibility to drop out. Strategies that identify and provide access to at-risk members includemore effectively utilizing physical organization, layout, and design; developing beginner-specificproducts, services, and programs; aggregating at-risk members; and allocating stage-appropriate training materials (e.g., program cards/training diaries) that identify at-risk membersto health club staff.

Allocate resources for maximum returnsOnce it is understood that beginner, intermediate, and advanced health club members havefundamentally different needs, expectations, and values, resources can be allocated to wherethey will achieve the highest return. As mentioned earlier, beginners require moreand higherqualityinteractions (instruction, support, positive reinforcement, explanation) with health club

staff than intermediate and advanced health club members. However, health club staff typicallyspend a disproportionate amount of time with more advanced health club members. Similarly,beginners do not require cutting-edge equipment. In fact, complicated equipment can be asignificant barrier for overwhelmed beginners. And, intermediate and advanced health clubmembers will not adhere to direction from instructors who cannot demonstrate the requisiteexpertise (knowledge, attitude, technique, physicality). Therefore, allocating an inexperiencedinstructor to more advanced health club members adds little value to their experience and may,in fact, create a negative perception of the business.

Simply making the necessary resources available is not enough. They must be allocated towhere they achieve the best outcomes for members and the maximum returns for the business.

Evaluate the efficacy of existing strategies in the context of member evolutionUnfortunately, most owners and managers will find that theirexisting strategies are inadequate when evaluated in the context ofmember evolution. Does your marketing address beginners safetyconcerns? Does your sales tour demonstrate to advanced healthclub members how they can be more effective and efficient? Doesyour layout improve the interactions between beginner,intermediate, and advanced health club members? Are resources

being allocated for maximum returns?

The industry sacred cow of deep discounting during what hasbecome the critical first sales quarter is a prime example of thefailure to account for members evolutionary process. Deepdiscounting attracts a disproportionate number of beginner and



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early-stage intermediate members who are mitigating their risk. The health club numbers swellwith the influx of new members. However, beginner and early-stage intermediate membersdont get the attention they require to survive. The health club always seems overcrowded,there are long wait times for equipment, the instructors always seem too busy, and the regularmembers always seem frustrated and annoyed. More and more out of order signs startappearing because of the overuse and abuse incurred by having too many members, especiallyones who dont know what they are doing (low expertise). Malfunctioning equipment meanseven longer wait times (resulting in even greater angst among members), especially given that

every other health club is going through precisely the same thing and repair and maintenanceproviders are overwhelmed with the additional demand. In this environment, new membersinvariably begin to feel ignored, overwhelmed, and out of place. Buyers remorse sets in,memberships are allowed to lapse or are cancelled (the negative experience is compounded ifthe disenchanted member also has difficulties cancelling a membership), and beginners andearly-stage intermediates dessert the health club like rats fleeing a sinking ship.

Even exceptional sales figures are typically accompanied by poor retention figures, resulting inzero net growth. This sales and attrition cycle is repeated year after year. In fact, as a strategy,deep discounting doesnt scale very well. The bigger the discount the more beginners and earlyintermediates are acquired. The more beginners and early intermediates, the greater theburden on resources (including time and space). The greater the burden on resources, themore negative the experience. The more negative the experience, the greater the attrition.Unfortunately, for most businesses, this cycle will continue to occur until owners and managersbegin to account for the members evolutionary process.

Develop products, services, and programs that target members evolutionarystagesThe product/service mix of most businesses does nothing to address the members evolutionaryprocess. Twelve-month, six-month, three-month, one-month, and month-to-month contracts dolittle to target a members evolutionary stage or manage the transition of members through the

evolutionary process. For example, twelve-month memberships are typically purchased byadvanced (i.e., high-expertise) health club members. Most twelve-month memberships includeall programming (exercise prescription) and fitness assessments, even though advanced healthclub members are the least likely to use these services. However, many one-month and month-to-month memberships (that appeal to beginners wanting to mitigate their risk) do not includeprogramming and fitness assessments, even though the beginner would benefit enormously(and member retention would improve significantly) from the additional service.

Develop policies, procedures, protocols, and practices that target membersevolutionary stagesBeginners want to mitigate their risk. They are hoping for the best, but expecting the worst.Show them that you can mitigate their risk without just dropping your prices. For example, offerextended cooling-off periods, no-questions-asked cancellation policies, and high instructoravailability. Intermediates enthusiasm often gets the better of them. They require high-expertiseinstructors to keep them progressing (expanding) and to avoid overtraining and injury.


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Businesses whose hiring policies and practices simply involve getting the shift filledwill struggleto create the environment necessary for intermediates to truly thrive. Advanced health clubmembers want to get the job done; they dont want to waste time waiting. For example,advanced health club members dont want to wait in line at the front desk to purchase theirGatorade before a workout. Using vending machines adjacent to the lockers or near theworkout area allows advanced health club members to avoid unnecessary delays.Furthermore, front desk traffic is reduced, allowing staff to focus on customer service,membership inquiries, and sales.

Manage the interactions between beginner, intermediate, and advancedhealth club membersPrecisely because beginner, intermediate, and advanced health club members havefundamentally different needs, expectations, and values, constituents from these segments canoften find themselves at odds with each other. For example, beginners can be intimidatedworking out in close proximity to advanced health club members. If an advanced health clubmember asks a beginner if he or she can work in, an insecure beginner can view the requestas an act of aggression rather than an innocent enquiry. Similarly, if a few intermediates (who

often like to train in packs) monopolize equipment, advanced health club members can becomefrustrated and annoyed. And, oblivious beginners resting on equipment, chatting to others,wandering around aimlessly, getting in the way, and asking stupid questions can negativelyimpact the experience of intermediate and advanced health club members.

Be strategic about the mix of expertise within the health clubThe majority of health clubs will have a significant range of expertise within their membership.However, the level of expertise is not static. It changes over time in response to specificbusiness practices, industry trends, shifting customer expectations, and broader social mores.For example, industry icons like Golds Gym and World Gym were historically renownedbodybuilder gyms (i.e., high-expertise). However, more recently these businesses haveattempted to broaden their membership base to include more low-expertise members (e.g.,deconditioned, overweight, families). The challenge is much more than a branding or marketingissue. Its trying to fit low-expertise members into a firmly entrenched, high-expertise culture.

Alternatively, Curves Fitness has successfully focused its business entirely on the low-expertisememberyou certainly wont find any aspiring Ms. Olympias at Curves. Of course, thechallenge for Curves is to retain members whose expertise eventually exceeds the Curvesoffering. Over time, the basic circuit format and limited equipment eventually become mundaneas a members expertise accumulates. The opportunity for expansion is extremely restricted. Infact, one explanation for the failure of the Cuts Fitness franchise (essentially Curves for men) isthat men, unlike women, generally do not want to remain at the bottom of the expertise curveany longer than they have to. Once men had mastered the limited Cuts offering (that appealedto women), there was no opportunity to continue developing their expertise, i.e., once beginnershad progressed out of the survival zone, there was little opportunity for continued expansion.


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The Missing LinkMember acquisition and retentionremain the two most significantcontinuing challenges for mosthealth, fitness, and wellnessbusinesses. Despite the considerable

attention from industry associations,various business luminaries, industrypublications, consultants, andpundits, surprising little concreteprogress has been made towardssolving the member acquisition andretention problem.

In fact, former executive director of IHRSA John McCarthy recently made the astonishingadmission that [I]f a commercial club operation could sustain substantial profitability withattrition rates in the 35 percent to 45 percent range, so be it. The statement reflects thefrustration, shared by many within the industry, over the abject failure to ameliorate what canbest be described as a systemic and enduring retention crisis.

The fatal flaw of member acquisition and retention strategies has been the failure to adequatelyaccount for the members evolutionary process. The fundamental differences betweenbeginner, intermediate, and advanced health club members demand that owners and managersdifferentially (and comprehensively) address the disparate needs, expectations, and values ofthese customer segments.

From a research perspective, member expertise is the confounding variable (i.e., a variable thatresearchers fail to control or eliminate that compromises their ability to demonstrate a causeand effect relationship) that member acquisition and retention strategies have ignored. Forexample, it is widely accepted that high membership usage is associated with higher retention.Based on this assertion, owners and managers have been directed to encourage members touse their clubs more often, particularly early in their membership term. However, intermediateand advanced health club members are known to be frequent users (because of their splittraining routines, established exercise history, high self-efficacy, and superior discipline) andbeginners are known to be less-frequent users (because of their full-body workouts, poorexercise history, low self-efficacy, and lack of discipline). And we know that beginners are muchmore likely to drop out. Therefore, it is entirely possible that the correlation between high usageand retention is an artifact of member expertise and, as a result, a causal relationship betweenmember usage and retention is erroneous. In fact, simply trying to encourage highermembership usage in beginners may have a deleterious effect on retention, because they maydecide that they are not willing to meet the more onerous commitment.

Without properly accounting for a members evolutionary process, member acquisition andretention strategies will continue producing mixed results at best. It is precisely those mixedresults that are responsible for the kind of frustration and sense of resignation that createsacceptance for attrition rates in the 35 percent to 45 percent range....


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Now What?Understanding the fundamental differences between beginner, intermediate,and advanced health club members is only the start. Leveraging thatunderstanding to create experiences that customers value and that drivesmember acquisition, retention, and long-term loyalty to create sustainablerevenue and profit growth is where the real work begins.

Please feel free to contact me at [email protected] or through theAccess FIT blog with questions, comments, critical analysis, and feedback(positive and negative). The ideas presented here will continue to evolveover time and, as they do, this publication will be periodically updated toreflect those developments.

Coming SoonExperiential Health Club Designexplores the critical, yet oftenoverlooked, contribution of physical organization, layout, anddesign to managing the customer experience. Health clubphysical organization, layout, and design create the foundationof customer experiences and are essential to memberacquisition and retention.

Part One introduces the emerging discipline of CustomerExperience Management in the context of the health, fitness,and wellness industry; examines existing industry attitudes tohealth club design; discusses why so many businesses (evensuccessful ones) continue to get it wrong; and identifies 12strategic opportunities to improve the bottom line.

Part Two details the customer segmentation process; providesvaluable insights into understanding customer needs,expectations, and values; discusses the significance ofdefining customer experiences; deconstructs and reconstructscustomer experiences to add superior value; explains the importance of engineeringexperiences into facility design; defines customer experience zones; and uncovers a powerfulnew design paradigm that transforms customer experiences.

Part Three consolidates the concepts from Parts One and Two into a range of workablesolutions to improve customer experiences at every touch-point across the business; discusses

how to properly utilize customer experience zones; and provides practical examples for easyimplementation/execution into any business.

Part Four reveals how experiential health club design creates additional synergies that improvea raft of business issues, including customer service, sales, internal and external marketing,staff productivity, morale, and turnover, and can significantly reduce equipment costs.
mailto:[email protected]:[email protected]

the evolution of a health club member

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