Growing Membership and Profit by Les Mills

LES MILLS INTERNATIONAL © 2011 1

LES MILLS INTERNATIONAL © 2011

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Health & Fitness facility attendance has

become the biggest adult ‘sport’ in the

Western world.

Bigger than football, tennis and golf

combined …

We thought all stars we aligned for further

growth…

US Adult Fitness Club Participation



• Membership retention is the largest problem facing our industry today

• Based on commodities and lacking the excitement and social

engagement of sports - We behaved more as gyms than as true health

clubs.

• Competitive industries are evolving faster than us, eg:

• Virtual exercise

• New sports

• Nutritional science

• Medicine

• Stagnating industry - Segmentation rather than innovations – The

industry has started to turn into itself – we are fighting for the same

customers instead of innovating to attract new ones (Budget clubs;

micro Gyms)


Many facilities worldwide are being hurt

by low-budget competitors.

At the same time, there are successful

new fitness models emerging (micro

gyms) eg:

• Cross Fit Studios

• Orange Theory - $23 per class

• Kosama, Omni, Fitness Together, Title Boxing

• Soul Cycle and Flywheel (US) – $32 per class

• Pure Yoga (Asia and US) –

$145 to $165 per month

• Exhale Spa (US) – $195 pm for classes-only

membership

• People are willing to pay for value…

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Many operators focus solely on sales and profit. Sophisticated clubs and recreation

centers add membership numbers and retention statistics. These are valid but BUT

can not guide management decisions –We need to manage using leading

measures which predict what the outcomes will be.

There is one number that has a more powerful effect on success than any of the

others, that influences everything else: Member attendance.

Regular attendees renew their memberships, refer their friends and promote their

clubs at staggering rates when compared to members who pay but seldom use their

gyms.


For all the good efforts of the equipment

companies, it’s not about the machines.

It’s about becoming more than just a place

where people come to pump iron and run on a

treadmill.

Leave that to the budget gyms that charge

$10 a month.

LES MILLS INTERNATIONAL© 2011

Design a high-energy workout environment

Create a relationship selling and new

member induction system

Recruit a team of great personal and small

group trainers

Build a ‘club within a club’ system for

sports and other activities

Develop a member education and social

network communication system



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78% say room to exercise is extremely/very important!

60% say the ambience of the room is extremely/very important




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From Hard/Transactional selling to Relationship Selling to Educative

Selling:

Shifting the MCs’ focus on providing relevant ‘solutions’ for a healthier

and happier lifestyle – not selling a gym membership

People join to get results and motivation but they stay because they

make friends - The Membership Consultant (MC) can be the first

powerful relationship…

People research and buy online more and more

We need to be more than the low-budget club – MCs need to bring

additional value to online buying

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MCs to become Membership Coaches responsible for setting up the new

member for success

– 24 Hour Fitness

–80% of prospects have been member of a gym before…

–No sales commission since last year

–They have cut from 12 sales consultant to 5 membership coaches

per centre

–Prices has increased and January 2012 has seen the highest

number of sales ever

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MCs to become Membership Coaches responsible for setting up the new

member for success

– LMNZ

–Shifted from hard selling to relationship selling in 2005

–MCs prescribe a training plan before the membership solutions: – It increases the perceived value and allows for an educated decision to be made

– It creates ‘buy-in’ and commitment from prospect… It paves the road for new

members to become ‘addicted’ to exercise at your facility… and it creates a bond

with the MC.

–They are responsible and accountable for new member attendance

in first 3 months (21 visits)

Recruiting and training MCs properly so they can deliver educative sales

pitch and prescribe holistic fitness prescription and relevant exercise

recommendations based on the customers’ needs

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LES MILLS INTERNATIONAL© 2011 38






Going the extra mile…

LMNZ – If a prospect doesn’t join, they leave with a 30-day exercise plan

to do at home – My Exercise Calendar

Behaviors must align with Vision…

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LMNZ - Improve the lives of New Zealanders

Our goal is to get people to exercise, if possible in a gym and if possible, in Les Mills

gym. If they don’t join today, we still want them to start exercising. At some point, we

are confident they will join because they need MORE, they need motivation and we are

the coolest gym in town. Reece Zondag, CEO, LMNZ

This approach allows us to:

– Come across as true fitness experts vs salespeople

– Preserve the relationship

– Give MCs a good reason to follow up and a real purpose behind each

follow-up call

– Focus no the talk being always about exercising, their goals, where

they are at with it, inviting them to an event vs latest greatest deal

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Implement a simple but thorough member on-boarding process

facilitating consistent attendance and focusing on usage during first

12 weeks. It will set the foundation for long-term engagement.

“Every year, the industry sells millions of memberships to men and women who, though

they earnestly wish that they could become regular exercisers, have not yet developed

the discipline or habit of regular exercise.” IHRSA Guide to Retention 2007

“12% of all cancellations would be avoided if all new members visited the facility at

least once per week during the first calendar month after joining.”

FIA Top Ten Strategies for Winning the Retention Battle

STATS ON LENGTH OF MEMBERSHIP WHEN USAGE IS HIGHER THAN TWICE WEEKLY IN FIRST FEW MONTHS

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LMNZ - Goal: 21 visits in 3 months

• Induction process with regular and specific

points of contact

• MCs are responsible for it (about 30% of their

commission)

• they sell the dream; they make sure the dream

happens!

• Tracks every new member over 84 days and

visits at 14, 42 and 84 days

21 visits





LMNZ: 21 visits in 84 days

Result: 50% of members achieving the 21 in 3 months (Goal is: 65%)

Give MCs a clear and genuine reason to call – Red status: Rescue call

– Orange: What more can we do to get you here more often?

– Green: High-five call!

Proven to be very successful in increasing new member usage,

maintaining member motivation by discussing exercise progression and

driving referrals earlier and more often

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• Create a personal

relationship with

your members


Social media is revolutionizing

our ability to communicate!

But… it’s not as easy as it looks.

Engagement, interest and

authenticity are key.

Otherwise it’s meaningless…



Health clubs need to become

more than just places where

people go to use exercise

machines!

We need to become true providers

of holistic health. Education

changes lives and your members

will love you for it.




Lifestyle Family Fitness (Florida)

teen fitness initiative

– FREE 2-Month Summer

Membership

– Teens can utilize all equipment

and participate in Group

Exercise classes

– Hourly restrictions in place

(ie non-prime time)

– Remember… teens have parents

and they grow up to become

paying adults

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Freelance

Programmes

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A great way to increase the quality of

on-boarding, results and connection

(member to staff)

Can be a good source of revenue

Increase income opportunities and career

opportunities for GX instructors

However: – Even the best facilities in the world have less than

10% of members using PT on a regular basis vs

50%+ in GX

– Connection is with a single staff member: if the

member is unhappy with the PT or if the PT leaves,

you could lose the member

– No prescription of other form of exercise such as

GX (which is more social and more holistic)

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Currently the holy grail of the

industry

Everybody wants successful SGT

programs – Allows more people access to PT

– Increases $ per hour for PTs

– Builds relationships between members…

They make good friends.

– Brings back the spirit of sports teams

Challenges: – Best facilities only have 3 or 4% of

their members doing SGT

– As yet, no one has really made it

successful

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• 90% of all exercisers report that they would prefer to work out in a group.1

• Members who attend Group Exercise (GX) use their facility 3 times per week compared to

IHRSA's figure of 1.9 member visits a week, on average.

• GX is cited as the biggest influence (40%) on how long people remain a member of a

fitness facility.

• GX member retention rates are higher than other member retention rates, on average.

• 60% of people rate GX as the #1 service they specifically look at when choosing a gym.2

• Satisfied GX members refer people 3 times more than other members.


Group Exercise attracts and motivates the

masses.

Some of the world’s most successful facilities

have over 50% of their attendances in GX.

“Group Exercise members attend more

regularly, remain members for longer, make

more referrals, perceive greater value in their

memberships (ie will pay more) and do not

leave when a budget gym opens nearby!”1

1. Will Phillips, The Retention Breakthrough



Many facilities worldwide are

being hurt by low-budget

competitors.

At the same time, there are

successful new fitness models

emerging (micro gyms) eg:

• Orange Theory - $23 per class

• Kosama, Omni, Fitness Together,

Title Boxing

• Soul Cycle and Flywheel (US) –

$32 per class

• Pure Yoga (Asia and US) –

$145 to $165 per month

• Exhale Spa (US) – $195 pm for

classes-only membership

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• Independent research shows that LES MILLS™ licensed facilities have

500 more members per facility than the global average.1

• Average Group Exercise attendance at LES MILLS™ licensed facilities

is 33%, with top performers above 50%.1

• LES MILLS™ class participants visit their facility at least twice as

often as the average member: 3.1 to 3.7 times per week vs 1.2 to

1.9 visits per week.2

• 71.8% of LES MILLS™ participants say they intend to still be a

member of their fitness facility in 12 months’ time.3

• 95% of LES MILLS™ participants would recommend

LES MILLS™ programs to their friends and family.3

1. Scoreboard global survey 2011 2. Nielsen (2010); IHRSA (2011) 3. IHRSA (2009)





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Nielsen Consumer Survey



Prospects and members usually

need three types of training to cover

their basic needs

Make sure you have at least one

great program you can recommend

BLINDLY in terms of quality,

experience and consistency in each

of these categories: – STRENGTH TONING

– CARDIO

– MIND-BODY STRETCH

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5 program genres comprise 75% of GX attendance every week

In order of market share, these are:

21% Strength and Weights

19% Cycling

14% Mind and Body

12% Dance

9% Martial Arts

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Do you have best-in-category

programs for the activities

members and prospects are

more interested in?

While each club community has

a variety of programs, research

shows there are five basic

genres driving 75% of global

Group Exercise attendance:

• Strength and Weights (21%)

• Cycling (19%)

• Mind-body (14%)

• Dance (12%)

• Martial arts (9%)

Are you interested in launching new

program(s) to primarily increase

retention and strengthen your current

positioning, or to differentiate your offer

and attract new types of members?

• Retention and positioning

strengthening: go with program(s)

naturally matching your club positioning

and main target markets

• To differentiate your offer and target

new types of members: go with

program(s) off your natural positioning

• Whatever your primary goal, Les Mills

can help you achieve it with our

scientifically-based programs and

proven Group Fitness Management

System


Les Mills’ BODYPUMP® is the original barbell

class, designed and scientifically proven to

strengthen the entire body. This 60-minute workout

challenges all major muscle groups by using the

best weight-room exercises, including squats,

presses, lifts and curls. Great music, awesome

instructors and individual choice of weights inspire

participants to perform 800 reps per class and to

get the results they came for - and fast!

Due to its broad appeal, BODYPUMP® attracts

big numbers across all time-slots. Best practice

suggests scheduling it a minimum of 7 to 12

times across the week to maximize attendance.

Most clubs offer at least 2 classes per day.

BODYPUMP® participants visit 4.3 times

per week on average versus the industry

average of less than twice a week for non-

Group Exercise club visits.


Les Mills is committed to building our brand and

growing demand for your classes. That’s why

we’ve teamed up with Beachbody, the best-

known provider of home workouts, to create

LES MILLSTM PUMP, a set of home-workout

DVDs. We’ve seen the power of other brands

using infomercials to drive consumer awareness.

Partnering with Beachbody will introduce a

national audience of millions to the Les Mills

brand. The exposure will help to drive more

people into your facility and classes, and make it

that much easier for you to sign up new members.

Les Mills’ BODYPUMP® is the original barbell class, designed and scientifically proven to strengthen the entire body. This 60-minute workout challenges all major muscle groups by using the best weight-room exercises, including squats, presses, lifts and curls. Great music, awesome instructors and individual choice of weights inspire participants to perform 800 reps per class and to get the results they came for – and fast!

Due to its broad appeal,

BODYPUMP® attracts big

numbers across all time

slots. Best practice

suggests scheduling it a

minimum of 7 to 12 times

across the week to

maximize attendance.

Most clubs offer at least 2

classes per day.

BODYPUMP®

PARTICIPANTS VISIT 4.3

TIMES PER WEEK ON

AVERAGE VERSUS THE

INDUSTRY AVERAGE

OF LESS THAN TWICE A

WEEK FOR NON-GROUP

EXERCISE CLUB VISITS.

A short, sharp workout, backed by core conditioning research from Penn State University, that strengthens and tones the body. It hones in on the torso and sling muscles that connect the upper and lower body. It’s ideal for tightening tummy and butt, improving functional strength and assisting in injury prevention. CXWORX™ bands are available from lesmills.com/equipment.

Due to its broad appeal

CXWORXTM attracts big

numbers across all time-

slots.

Best practice suggests

scheduling it at peak or

shoulder times once or

twice a day. Given the 30-

minute format, lunchtime

classes are ideal.

DID YOU KNOW?

CXWORX™ CAN BE

USED AS A FEE-BASED,

SMALL-GROUP

TRAINING PROGRAM.

MANY FACILITIES ARE

HAVING SUCCESS WITH

THIS BOTH IN AND OUT

OF THE GROUP

EXERCISE ROOM.

An indoor-cycling workout

where participants ride to

the rhythm of powerful

music. The inspiring team

coach leads the pack

through hills, flats,

mountain peaks, time

trials and interval training.

Participants sweat and

burn to reach the

endorphin high!


RPMTM attracts big


slots.


scheduling it 9 to 14 times

through the week to

maximize attendance.

Most clubs that have

dedicated cycling studios

offer 3 to 7 classes a day.

DID YOU KNOW?

IT’S POSSIBLE TO

CHARGE A BOOKING

FEE FOR RPMTM TO

BRING IN ANCILLARY

REVENUE IN THE

THOUSANDS PER

WEEK.

BODYBALANCETM/

BODYFLOW® is a Yoga,

Tai Chi and Pilates

workout that builds

flexibility and strength.

Controlled breathing,

concentration, stretches,

moves and poses to

music create an holistic

workout that balances and

harmonizes the body,

leaving participants

centered and calm.


BODYBALANCETM/

BODYFLOW® attracts big


slots.


scheduling

BODYBALANCE™ a

minimum of 5 to 7 times

through the week.

It’s very popular in the

morning, shoulder times

and during weekends.

Les Mills’

BODYCOMBATTM is a

fiercely energetic cardio

workout inspired by

martial arts such as

Karate, Boxing, Tae Kwon

Do, Tai Chi and Muay

Thai. Supported by driving

music and energizing

instructors, participants

strike, punch, kick and

KATA their way through

calories to superior cardio

fitness.

Attracts maximum

numbers during peak and

shoulder times, weekdays

and weekends. While it

also works very well at off-

peak times, performance

is dependent on

marketing and the

convenience of timing.


scheduling

BODYCOMBATTM at least

5 to 7 times a week.

Simple dance moves with

chart-topping popular hits

enable participants to

shape up and let out their

inner star – even if they’re

dance-challenged! The

45-minute SH’BAM™

classes provide the

ultimate fun and sociable

way to exercise.

Attracts maximum



and weekends. Best

practice suggests

scheduling SH’BAM™ 5 to 7 times a week.

A fun, low-impact, whole-

body workout that

improves fitness and core

strength, using body

weight, VIVETM tubes and

balls for extra resistance.

Great music, group

interaction and a skilled

instructor inspire

participants to get fit for

life.

Attracts maximum



and weekends. While it

also works very well at off-

peak times, performance

is dependent on

marketing and the

convenience of timing.


scheduling BODYVIVETM

at least 3 to 5 times a

week.

VIVE™ tubes and balls

are available at

lesmills.com/equipment

A cardio workout offering

an addictive fusion of the

latest dance moves and

hottest new sounds puts

the emphasis as much on

having fun as breaking a

sweat. Funky instructors

teach participants how to

move with attitude through

this 55-minute class.

Attracts maximum



and weekends. Can

perform strongly off peak

with a charismatic

instructor and strong

marketing. Best practice

suggests scheduling

BODYJAMTM at least 3 to

7 times a week.

Using simple movements

on, over and around a

height-adjustable step,

participants get huge

motivation from popular

music and uplifting

instructors. Cardio blocks

push fat-burning systems

into high gear, followed by

muscle-conditioning tracks

that shape and tone the

body.

Attracts maximum



and weekends,

particularly mornings. Best

practice suggests

scheduling at least 3 to 5

times a week.

A sports-inspired cardio

workout for building

strength and stamina.

High-energy interval

training classes combine

athletic aerobic

movements with strength

and stabilization

exercises. Dynamic

instructors and powerful

music motivate

participants toward their

fitness goals.

Attracts maximum



and weekends. Can

perform strongly off peak

with a charismatic

instructor and strong

marketing. Best practice

suggests scheduling

BODYATTACKTM at least

3 to 7 times a week.



Whatever your goal and/or

vision - you need a great

team to help you get there.

A crucial factor in the

success of your programs is

the quality of the instructors

who teach them.

Great instructors drive

thousands of attendances

each year.


Partnering with Les Mills can help you

to:

• Build a brand that attracts new talent

• Develop the skills and better motivate

your team

• Ensure training and ongoing staff

education is relevant and up-to-date

• Guarantee quality and consistency to

your members and guests

• Keep your team engaged and inspired







Massive BUZZ and interest in club during the 2 weeks building up to event

Full focus from club team on common goals and interaction between sales,

customer experience and product departments – ‘Breaking down silos’

Sold-out events and massive energy in clubs – all classes at 80 to 100% capacity

Attendance: 5 to 10% membership

20% guests per class

50 to 70% conversion rate of guests

Massive buzz post-event

An increase of attendance in 2 to 3 weeks post-event of 10 to 20%

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The LES MILLS™ Group Fitness

solution gives you free access to a

huge collection of valuable

marketing and promotional

resources. We are continually

working on new ways to help you

inspire your members and

prospects. Currently we’re

developing online tools, which will

allow you to customize material with

your own club logos and messages.




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WHY should your staff care about your

business and challenge themselves

every day?

People need to be engaged in an

inspiring and meaningful purpose…

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“We are warriors in the battle against

inactivity and over-consumption.” LMI Instructor Creed, 1998

“Creating life-changing experiences every

time, everywhere. One class at a time,

one participant at a time.” AIM manual

“You have to find a way to make people

fall in love with fitness.” Les Mills, 1968

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Health and Fitness facility attendance has become the

biggest adult ‘sport’ in the Western world. Bigger than

football, tennis and golf combined.

But we have traditionally lacked the excitement and social

engagement of sports, and behaved more as gyms than as

true health ‘clubs’.

The faster we can change that, the bigger our future!
