Children, the elderly, the deconditioned, teenagers, families — the U.S. population is filled with markets waiting to be tapped by clubs. Target marketing and demographic analysis give operators the means to reach these markets. Still, operators often overlook demographic tools, and, in doing so, miss out on niche opportunities.
Take a good, hard look around your exercise rooms. What type of people are joining your club and where do they live? More importantly, what type of people aren't joining and what can you do to attract them?
You can answer the former question just by examining your membership data. The latter question is a little tougher. You can start to formulate an answer by comparing your club against industry statistics to determine where you may be missing out.
Consider the senior market (age 55 or older), which accounts for approximately 7.4 million club members (or 22.5 percent of the total market), according to the Health Club Trend Report. This report — which provided statistics collected from the 14th annual Superstudy of Sports Participation conducted by American Sports Data Inc. (ASD) and sponsored by IHRSA — ranked seniors as the third-largest population in health clubs today (behind ages 18-35 and 35-54, respectively). But how many seniors actually use your health club?
The graying of health club memberships can mean green for clubs. The majority of seniors have both a disposable income (although they may be conservative about spending it) and high retention rates, says Ed Tock, a partner with the New York-based Sales Makers, a consulting firm with more than 20 years of experience.
“We're no longer the 18-to-24-year-old market that we were 15 to 20 years ago,” Tock points out. “We're seeing an older client. There's no secret the population is aging.”
Casey Conrad of Communication Consultants (Wakefield, R.I.) uses a real-life example to illustrate this membership trend, and how it has proved to be financially profitable for some clubs. “I just got off the phone this morning with a client of mine,” she says. “They have 3,000 members. One thousand are over the age of 60…. His non-prime-time use of the club is now busier than his prime time.” This is because retired seniors come to the club when traffic is slow — that is, when other people are at work.
Overall, clubs have witnessed a growing number of elderly members. In fact, senior membership has jumped 379 percent since 1987, the highest increase for any age group.
“Ten thousand people per day turn age 50 in the United States…,” says Jim Smith, president of Peak Performance Systems, a consulting company out of Bellevue, Wash. “And that's going to continue for the next 14 years.”
Still, not all club operators have accepted the senior demographic as a viable market. These operators should consider this: While seniors only took third in terms of mass numbers, they came in first in terms of club attendance. According to the report, members over the age of 55 averaged 97 club visits annually, compared to 92 for the baby boomers and 88 for Generation X.
This isn't to suggest seniors — or any other demographic — will join a club and stick with it. To reach the elderly, clubs must offer programming that appeals to older adults.
Older adults enjoy low-impact and mind/body exercises, and participation studies seem to show that the growing senior market is influencing these activities. Specifically, from 1998 through 2000, participation increased in recumbent cycling (32 percent), yoga/tai chi (30 percent) and aquatic exercise (15 percent), according to Harvey Lauer, president and founder for ASD. Furthermore, Pilates, which was measured for the first time last year, registered 1.7 million participants, 60 percent of whom were new to this particular exercise program.
Although more seniors are coming into fitness facilities, and the activities that they prefer are enjoying greater participation, many health clubs have not actively marketed to the elderly. In fact, while the senior population is the “fastest-growing segment, it's still, in most clubs, the smallest segment,” says Smith. “Although there's been a lot of progress in that area…, clubs have barely scratched the surface.”
This gets to the heart of demographic analysis and target marketing: It's not enough to know the population size; you also need to know how to market to the population in question.
Again, take a look at older adults. Industry advertising continues to focus on young, beautiful hard bodies — imagery that doesn't appeal to older adults. So club operators who wish to broaden their markets must examine their own promotions and how it relates to their own perceptions. What people are they trying to attract, and what members are they actually attracting?
“The demographic [of the membership] is a reflection of the owner and what he/she is about,” says Charley Swayne, owner, Valley View Fitness & Racquet Club, La Cross, Wis.
According to Swayne, the typical advertising tactics that many clubs favor don't cut it with these older markets (or many other markets for that matter). To appeal to those over 50, he recommends a “live longer and healthier” theme.
“[They] really enjoy the social aspects much more so than the younger members do,” Swayne adds.
Older adults are also a little more discriminating about where they spend their money. Music choice, amenities offered, and even facility decor all play a prevalent role in this group's decision to come to your club.
The senior market isn't the only growing demographic that clubs may be overlooking. When it came to membership growth, children under the age of 18 ranked second, behind seniors, increasing 131.5 percent since 1987. This indicates a demand for family, teen and children memberships.
“Kids' [memberships] are picking up significantly too,” Smith says. “Really anything from toddler on up. Part of it is because there is such an increase in childhood obesity.”
Knowing that memberships are on the rise for seniors and children is important, but that's not enough to get these people into clubs. First, you must make sure that these groups — or any other demographics you would like to reach — live in your area. You can do this with the help of demographic research companies.
A reputable company can provide you with valuable statistics such as ages, income levels, gender, average number of children, and more. For example, CACI Marketing Systems, which has offices in Arlington, Va., La Jolia, Calif., and London, provides clubs (and many other businesses) with customer profiling and segmentation, custom target analysis, direct mail campaign implementation, target marketing, demographic data reports and maps, and even media planning.
For an example of customer profiling, visit CACI's ZIP code profiler at www.demographics.caci.com/zip_code_searches.htm. Plug in a ZIP code and find out about the area's prevalent consumer type. For additional help, you can also find copies of CACI's Sourcebook of ZIP Code Demographics in many libraries or you can purchase copies through the company's Web site (www.caci.com).
By profiling customers, clubs can pinpoint the best prospects for their businesses. This is a much more effective and cost-efficient approach than shotgun advertising to a wide market.
“The benefit there is a matter of economics,” explains David Huffman, the managing director of the CACI Marketing Systems Group. “This spills over to other vertical markets, not just the fitness industry…. It drives your business decisions. It helps to keep costs of advertising and costs of mailing down.”
Naturally, clubs interested in attracting seniors, children, etc., can request information based on age. However, operators should also seek information on income. Statistics point out that, in general, U.S. residents will not spend more than 1.3 percent of their annual household income on a club membership. This means that if your club is charging $750 for an annual membership, you'll need to target people with incomes of $50,000 or more.
“Having good information on the income level in the area is very important,” Smith says.
Demographic information is also helpful for developing a greater understanding of a particular group of people. For example, older adults who live in retirement communities are 29 percent more likely than the national average to join a health club, and 45 percent more likely to participate in a fitness program at a gym. According to CACI, this prosperous group has lifestyle and spending interests in playing golf, weight training, bicycle riding, camping, hiking and more.
After clubs locate the groups whom they wish to target, the next step is to market through direct mail, using all of the targeted information that the demographic analysis has provided. “With any kind of direct mail, you want to be able to target demographically as well as geographically the age and income that is appropriate for your club,” Smith explains.
To accomplish that, you need a mailing list. And before licking a single stamp, you want to make sure the contacts and addresses are good. Companies that offer cheap mailing lists may be selling outdated — and therefore useless — information.
One way to check the accuracy of a company's lists is by asking other customers if they were satisfied with the company's services. If they complain that many of their mailers were sent back because of incorrect mailing addresses, then you'll know to invest your money elsewhere.
According to Conrad, you can find reputable list companies through your chamber of commerce, local printers and even real estate agents, who all work with list companies. When you locate a list company, make sure you find out how often it updates its lists, where the company gets its information, and who is collecting the information (the company itself or a third party), states Conrad.
One list company that industry experts highly recommend is Experian. A worldwide technology solutions company, Experian compiles data from hundreds of public and proprietary sources for direct marketing purposes (see www.listsabc.com/experian). According to Smith, many of the smaller list companies simply sell outdated versions of Experian's lists (or one from another bigger list company).
Maureen Gilroy, the senior marketing manager for Experian, advises club operators to make sure they narrow their marketing scope before sending out any mailers. “They really, truly need to be very targeted,” she says. “The tighter you define your [list] parameters, the better person [i.e., prospect] you're going to get.”
For instance, a narrowly targeted list would include all the names of pre-natal women within a five-mile radius of the club with a household income of $60,000 or greater. You could then send mailers to these women advertising a moms-to-be exercise class.
There is one downside to gathering all of this information: “The more specific data you ask for, the more expensive the list,” Conrad says. “But you have to weigh it against the returns. The more specific the data, the more qualified the lead.”
If you do wish to go with a targeted mail, yet you're fearful of the costs, you can save money by culling information from your database. Conrad advises sending mailers to the areas already dense with your members (you can determine this from your computer software programs). Find out what percentage of people in your club come from what ZIP code, and mail accordingly. But don't mail beyond five to eight miles from the club, Conrad says. People don't want to travel that far.
In the end, the least expensive list for targeted marketing may be closer than you think. “The best mailing list you can buy is the one you make yourself,” says Conrad. “How? All your missed guests.”
The average club has 100 to 200 guests per month, according to Conrad, and in most health clubs, the closing rate is 50 percent. Think of all the names that you're missing!
The Deconditioned: The Lost SegmentWhy health clubs are missing out on the biggest demographic of them allDespite the availability of target marketing and demographic studies, the health club industry still only reaches a small minority of the population. “The latest data is that 10 to 11 percent of people belong to a health club,” says Ed Tock of New York-based consulting firm Sales Makers. “That means when you go to the supermarket, nine out of 10 people in line ahead of you don't belong to a health club.” Many of those nine people probably don't exercise at all, which partially explains the rise in obesity. In fact, the deconditioned segment accounts for a large portion of the population, making this group an excellent target for health clubs. “It's a big market,” says Charley Swayne, owner of the Valley View Fitness & Racquet Club in La Cross, Wis. “It's a tremendously big market. It's the biggest market out there.” While the deconditioned may not join health and fitness facilities for psychological (e.g., no motivation or fear of change) or physical (e.g., feel too tired to exercise) reasons, clubs themselves may be to blame for missing out on this market. “Most people who are…obese don't feel comfortable going into clubs — and rightfully so,” says Jim Smith, president of consulting company Peak Performance Systems (Bellevue, Wash.). This discomfort stems partially from the usage of beautiful models in club advertising and promotion. Instead of a place where people go to work out and sweat, many non-members view the club as a place to look good and be seen. Therefore, clubs that fill their ads with muscular models are pretty much telling the deconditioned market that these are the type of people who work out at their clubs, explains Smith. Even when deconditioned people work up the courage to buy a membership, club staff may inadvertently ignore them, creating feelings of isolation and frustration. For example, personal trainers or instructors may chat with their friends in the club — in other words, exercise enthusiasts to whom the fitness professionals can relate. As a result, deconditioned members may feel left out and may not stay with their exercise program, Smith says. Some staff can even be condescending toward overweight members, an extremely unprofessional attitude, to say the least. “Staff need to be supportive in their attitude and in their actions and in what they're wearing,” he says. Smith relates a story that focuses on this latter point. At a recent trade convention, he was eating dinner with some group exercise instructors when the topic of workout clothing came up. Smith pointed out how body-hugging, skin-baring clothing can intimidate some members. The instructors disagreed. Their reasoning? “‘We wear thong leotards in our aerobics class all the time, and it's not an issue because there are no obese people in our class,’” Smith says, recounting their conversation. The instructors never considered that the thong leotards were keeping the obese people out. To make the deconditioned feel more comfortable in fitness facilities, clubs must teach employees how to make them more comfortable. “It starts with educating your staff on the importance of being sensitive and open to working with the deconditioned market,” Smith says. It also requires persistence. Staff should schedule workouts with new exercisers and follow up with a phone call whenever these members miss a session. “If you get a deconditioned person into your club, even on a sample basis, they need a lot of hand-holding,” Swayne says. |
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