There was a day, not too long ago, when health clubs could simply count on new people walking in the front door to offset the number of members walking out the back door. But, no more. Whether you are an executive director, membership director or a COO trying to manage a multi-branch association, chances are that you are currently struggling with the challenges of a membership base that is in constant flux or is steadily shrinking. I think it’s safe to say that’s probably not the direction that you want to go.
When our industry was growing – with plenty of people looking to join health clubs (high demand), and a fixed number of facilities available (fixed supply) – we all enjoyed a big influx of new members, regardless of how much competition we had. Yes, those were the good old days.
But now, there are multiple forces at play that have dramatically changed the industry as a whole. Let’s take a deeper look to see what’s going on.
The state of the health club industry:
Less than a decade ago, there were fewer than 18,000 operating health clubs. As of the latest data survey from IHRSA in 2013, there are now more than 33,000. So that means the supply of health clubs has increased by 83% over the past decade. That’s great news, right?
Not really. The problem is that the number of health club members is shrinking, especially as technology has vastly increased the number of fitness options available to individuals. All the data that we are seeing shows that we peaked out as an industry in 2011, and have been declining ever since.
If you look at a four-year trend, you can see that for the first time in our industry’s history, the supply of health clubs is equal to the demand of members seeking to join.
Making matters worse, three-year trends also show that people are not staying with their health clubs as long as they used to. Not even the senior population that used to be the anchor keeping our member retention rates somewhat steady.
In other words, fewer and fewer people are joining health clubs, and those that do are leaving sooner.
Conclusion:
The take away here is that we can no longer attract members as fast as we are losing them. Applying proven retention strategies will have to be an integral part of your operations if you want your health club to thrive.
Learn more about proven strategies on reducing membership churn by downloading our free e-book, The Science of Member Retention.
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