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Spa Business issue 2, 2018 is now out!

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Liz Terry
CEO,
Leisure Media

Kate Cracknell
editor-at-large,
Health Club Management

Katie Barnes
Managing Editor,
Spa Business

Lisa Starr
Senior Consultant,
Wynne Business

Anna Bjurstam
Owner,
Raison d'Etre

Dieter Buchner
Founding Partner,
Urban Healing

Jean-Guy de Gabriac
Founder/ CEO,
Tip Touch Academie

Marisa Dimitriadis
Managing Director,
The Spa Consultants

Anni Hood
Owner,
Kis Lifestyle Group

Jane Scrivner
Managing Director,
Jane Scrivner

'Premium value'

08 May 2012
by Kate Cracknell, editor-at-large, Health Club Management
The biggest challenge and the biggest opportunity in the health and fitness sector at the moment is segmentation. Operators must find a way to justify charging a premium – a sense of 'club' will be key

People will pay for the things they value. That was one of the key messages from Phillip Mills, CEO of Les Mills International, when he toured the UK recently as host of the Future of Fitness roadshow.

In a marketplace where low-cost is booming, it's easy to feel you have to compete on price. But as Mills points out, while some people are trading down from £50 a month to pay £15, others are going in the opposite direction, paying £150 a month to attend so-called 'micro-gyms' with their specialist group exercise-based offerings (see Health Club Management 2012 issue 5 p28) – the likes of Orangetheory Fitness (OTF) and Soul Cycle in the US, and BOOM! Cycle in the UK. At these clubs, it's not even about full-service. It's about identifying the activities people most love in a gym and focusing exclusively on these, delivering them exceptionally well, with members surrounded by like-minded people and inspired by specially selected, expert instructors.

So how can other operators follow this trend, creating a version of 'value' that can command a premium? There are of course many contributing factors, from facilities to service levels. But as the global megabrands demonstrate, it is a deeper emotional connection rather than a purely rational decision that really makes a consumer willing to spend more. Yet as US-based consultant Michael Scott-Scudder – quoted at the Future of Fitness roadshow – explains: "Most of us aren’t really health clubs. We're not even clubs. We're just places people come to lift weights and run on a treadmill."

First of all, then, we need to address the notion of 'club'. In his interview on Health Club Management 2012 issue 5 page 30, Dave Courteen, MD of Mosaic Spas and Health Clubs, stresses the value people place on community spirit: "We want to make our club something the town is proud of in terms of what it gives back to the local community. We're working with local schools. With local NHS teams to offer pre- and post-natal exercise programmes. We want to deliver courses on parenting, marriage, drug-proofing your kids. We're hoping to get involved with social services, creating a food bank where members bring in food that's distributed to local people in emergency need." It's the sort of cause-based approach that creates a close-knit group of members – and, Courteen hopes, 'raving fans' of the club who are willing to pay a premium.

Mills also speaks of the need to create the social engagement of sport in our facilities, and here the micro-gyms are very successful. "Our offering creates communities of people with similar goals and desires, and gets them connected," explains Terry Blachek, partner at OTF. This is all packaged up with great instructors, a great atmosphere in an intimate setting, a sense of fun, and high levels of personal attention to ensure participants actually get results – monitoring, mentoring and motivation. Because as Mills says, motivation is key: "We need to deliver results, but there must be a deeper insight. Why do people come to us rather than running round the block? It's motivation they want from us." That might come from the instructor, but importantly it can also come from other members.

As Courteen concludes: "The biggest challenge and the biggest opportunity in the sector at the moment is segmentation." Operators must find a way to justify charging a premium, and a sense of 'club' will be key.



Tags: Health Club Management  executive  health & fitness  sport & recreation  spa & beauty  personnel/hr  sales & marketing  training  people 

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