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Ray algar low-cost gym seminar Manchester UK October 2011
1. -COST GYM SECT
OW OR
L
AL
RE
OB
PO
2011 GL
RT
A STRATEGIC INVESTIGATION INTO A DISRUPTIVE NEW SEGMENT
Researched and written by Ray Algar, Oxygen Consulting UK in association with Precor
Tuesday, 25 October 11
6. 50% lower
than
country average
price
Scope to Heavy
operate 24 technology
hours and web use
DEFINITION
LOW
COST GYM
Ability to operate Predominantly a
with a single gym-only
person proposition
Tuesday, 25 October 11
7. Digital
infrastructure
Low
attendance Simplicity
MARKET
DRIVERS
Changing Affordability
consumer Consumer
sentiment
towards
clubs
Tuesday, 25 October 11
9. “A budget market hotel is one in
which the rooms are small and
the furnishings minimal. The focus
is on the essentials”
Ian Games
Outus & Co
Tuesday, 25 October 11
10. “Technology - Simple, easy
to use and intuitive interface
...you normally have a consumer
who can comfortably
interact with it”
Professor Evgeny Kaganaer
IESE Business School
Tuesday, 25 October 11
11. “Low-cost options can be status
symbols for consumers who want
to flaunt their ability
to get good deals”
Henry Mason, Head of Research
Trendwatching.com
Tuesday, 25 October 11
12. “Over the past ten years,
markets have moved. They have
traded up and traded down. No
longer is it good enough to
deliver average quality to
average consumers”
Michael Silverstein Senior Partner
Boston Consulting Group
Tuesday, 25 October 11
13. What do UK consumers think of the low-
cost gym experience?
Tuesday, 25 October 11
14. FitSpace The Gym
members Group
ex-members
Tuesday, 25 October 11
16. 20%
80%
First gym Previous gym experience
Tuesday, 25 October 11
17. How much do you agree with
the following statements?
0 = Strongly 5 = Strongly
disagree agree
Tuesday, 25 October 11
18. How much do you agree with the following statements?
3.3
3.5
Average Response
3.9
3.9
4.1
Know first name of staff team Has all facilities I need
Receive emails Staff available to provide free advice
Staff approachable
Tuesday, 25 October 11
19. How much do you agree with the following statements?
3.9 4.1 4.3 4.5
4.1
4
Average Response
4.2
4.2
4.5
Delivers on website promise Friendly atmosphere
Always feel safe Helping me to become healthier
Excellent value for money
Tuesday, 25 October 11
20. How likely are you to recommend this gym?
0 = Not all all 10 = Definitely
likely recommend
Tuesday, 25 October 11
21. How likely are you recommend FitSpace?
7.6 7.8 8 8.2
7.7
7.8
Average Response
7.9
8.1
8.2
Males Members with experience of other gyms
All members Members for whom FitSpace is first gym
Females
Tuesday, 25 October 11
22. Net Promoter Score
0-6 7-8 9-10
Detractor Passive Promoter
Tuesday, 25 October 11
23. Net Promoter Score
0 10 20 30 40
19
22
NPS SCORE
28
37
37
Age group - 25-34 Males All members Females
Age segment - 16-24
Tuesday, 25 October 11
24. Still a member in six months time?
7.6 7.85 8.1
7.7
7.8
Average Response 7.9
7.9
8.1
Males Members with previous gym experience
Member for more than one year All members
FitSpace is first gym Females
Tuesday, 25 October 11
25. Out of industry Net Promoter Scores
0 40 80
72
35
NPS
33
15
14
Apple - computers Subaru - cars Jumbo - supermarkets
Citybank - banks Sky - internet
Tuesday, 25 October 11
26. Text
The Gym
Group
ex-members
Tuesday, 25 October 11
27. 17%
Males - 60%
83%
First gym Previous gym experience
Tuesday, 25 October 11
28. How much do you agree with the
following statements?
0 = strongly
5 = strongly
disagree
agree
Tuesday, 25 October 11
29. How much do you agree with the following statements?
3.4
3.5
3.7
3.7
4
4
4.1
Staff available to provide free advice All the facilities I needed
Friendly atmopshere Helped me become healthier person
Always felt safe Email with advice
Provided eveything promised on website
Tuesday, 25 October 11
30. How likely are you to recommend this gym?
0 = Not all 10 = Definitely
all likely recommend
Tuesday, 25 October 11
31. How likely are you recommend The Gym?
7 8 9
7.4
7.5
Average Response 7.5
7.6
8.5
Members with previous club experience All members Males Females
The Gym was first gym member joined
Tuesday, 25 October 11
32. Net Promoter Score
0 10 20 30 40
4
20
NPS SCORE
21
22
36
Age group - 35-44 Males All ex members Females
Age segment - 16-24
Tuesday, 25 October 11
33. Where are members now?
31%
Male 66%
69%
Joined a different gym Not joined another gym
Tuesday, 25 October 11
34. How long a member?
More than one year
7%
Unsure
5% 0-3 months
27%
7-12 months
26%
4-6 months
35%
Tuesday, 25 October 11
35. 26% of this group had
experience of other gyms
0-3 months
27%
Tuesday, 25 October 11
36. Shall we try OK, let’s go try
another gym?
...36% of this group
went on to join another gym
Tuesday, 25 October 11
37. How likely to recommend to a friend - by club
Birmingham 7.9
8.5
Brighton 7.4
7.4
Liverpool 7.4
7.4
Males Females
Tuesday, 25 October 11
38. “No frills, low-cost gym.
Especially important for
us students!”
Female member
The Gym, Birmingham
10/10
Tuesday, 25 October 11
39. “The friendly atmosphere,
knowing you are safe and
not being judged by staff”
Female member
The Gym, Birmingham
10/10
Tuesday, 25 October 11
40. “Cleanliness and amount of
equipment available”
Female member
The Gym, Birmingham
10/10
Tuesday, 25 October 11
41. “There was a lack of staff. I
searched for 15 minutes before
finding staff. I cancelled after
going just once”
Male member
The Gym, Liverpool
2/10
Tuesday, 25 October 11
42. “Provide more supervison
from staff”
Female member
The Gym, Brighton
6/10
Tuesday, 25 October 11
43. “I would have liked a private
changing cubicle”
Male member
The Gym, Birmingham
5/10
Tuesday, 25 October 11
44. Leading international low-cost gym brands - clubs
At September 2011
17
19
23
38
52
Kingdom of sports Fitinn Smart Fit Fit for free
Fitness24Seven
Tuesday, 25 October 11
45. Leading international low-cost gym brands - clubs
At September 2011
54
70
80
141
447
Basic Fit Easy Fitness Clever Fit McFit Planet Fitness
Tuesday, 25 October 11
47. £61,000/
£160,000
existing
gym
15,000 to £160,000/
24,000 £500,000
square new
feet gym
Planet Fitness
Club
Membership Franchise
from business
£6.50/month model
Tuesday, 25 October 11
54. How members rate Planet Fitness on Yelp
19 16 12 20 6
1 star 2 stars 3 stars 4 stars 5 stars
Tuesday, 25 October 11
55. “I love Planet Fitness. Why?
Because I will never find another
gym in NYC this cheap.
Seriously, I spend more on peanut
butter each month!”
Male member
Planet Fitness, New York
Tuesday, 25 October 11
56. “This gym is WAY too
overcrowded and there is not
enough equipment to use so I
decided to buy and bring
some of my own”
Female member
Planet Fitness, New York
Tuesday, 25 October 11
57. Planet Fitness - EBITDA margin (3 clubs)
39%
54%
42%
Club - 25th Percentile Club - 50th Percentile (median)
Club - 75th Percentile
Tuesday, 25 October 11
67. They are challenging clubs
to examine their
member proposition
Tuesday, 25 October 11
68. “It has focussed me on our
specific proposition - Why become
a member of Holmes Place?”
Neil Burton, CEO Holmes Place Central/Eastern Europe
Tuesday, 25 October 11
76. oxygen-consulting/think-tank
-COST GYM SECT
OW OR
L
AL
RE
OB
PO
2011 GL
RT
A STRATEGIC INVESTIGATION INTO A DISRUPTIVE NEW SEGMENT
Researched and written by Ray Algar, Oxygen Consulting UK in association with Precor
Tuesday, 25 October 11