Although referrals and direct marketing are the fitness industry's time-tested methods for attracting new members, smart club owners are looking to digital options, such as Internet and e-mail marketing, to reach new clients during the current economic recession.
More traditional advertising vehicles, such as print and TV ads, are losing ground to digital media campaigns, according to Advertising Age's 2008 Agency Report. Revenue at U.S. digital specialty agencies rose 27 percent during 2007, compared to a 9 percent revenue increase for all agencies.
"You have to have a presence on the Internet. It's critical and cost-effective," says Rick Bouza, owner of RHB Solutions, a consulting firm that specializes in single-source management for health clubs.
Community strategic alliances and referrals have always been core marketing strategies for health clubs when the economy gets tough, Bouza says, but the same messages that were used in the past with much success now are being used with only moderate success. For instance, club owners who normally relied on direct mail may not be getting the same return on investment with those campaigns today, so they may need to rethink their marketing options.
"People get hundreds of pieces of mail, and you really have to scream to get noticed," he says.
Instead, Bouza says that club operators need to use a five- or six-pronged approach to marketing, rather than the two- to three-pronged approach of the past. That's why traditional lead generation techniques now are being combined with digital outreach campaigns as a cost-effective way to add a new dimension to the sales strategy at many clubs. In a down economy, club owners should use every tool available to reach their target market and cut back on options that don't work, Bouza says.
Even national club chains like Curves are using a multifaceted approach to draw new members. Curves spokesperson Becky Frusher says a versatile approach, coupled with an enticing offer, helped make January 2009 a successful month for her company, a month in which leads were up 113 percent over the same time last year
"These are hard leads — either phone calls from TV ads or people who filled out an e-mail request for more information," Frusher says.
Curves advertised a special discount offer for 50 percent off the membership fee, plus 30 days free. The company also promoted its CurvesSmart personal training technology to attract new members. By using a variety of media choices, Curves was able to reach a broader demographic.
Although TV ads helped Curves announce national promotions, TV and radio advertising is expected to decline by about 5 percent in 2009, while online ad spending is expected to rise 9 percent, according to projections by eMarketer, a digital marketing company. eMarketer estimates that search engine optimization (SEO) Web marketing will grow nearly 15 percent this year, and that e-mail marketing will grow 3.5 percent. SEO involves using targeted search and keyword strategies to ensure a site appears among the top search engine results (see SEO and Social Networking story).
"We do print and TV ads, but this year, I plan to cut that budget back by 20 percent and put that into Web-based advertising," says Howard Brodsky, CEO of New York Health & Racquet Club. "The Web is our No. 1 priority by a long shot."
By turning to a Web-based strategy, club owners can capitalize on generally cheaper ad rates, save on printing and mailing costs, and reach a targeted demographic.
Bouza, who advises his clients to opt for online marketing, says, "In our experience, the market overwhelmingly is looking to the Internet for health club information, especially if you are between 18 and 50 years old, which is a substantial part of health club goers."
Web demographics are evolving to reflect more women coming online, as well as more users ages 35 and older, eMarketer says. It predicts that in 2009, the number of U.S. Internet users will grow to 200 million people — nearly 65 percent of the population.
Brodsky notes that members of Generation X and Generation Y are prime online target markets. Though the age ranges vary slightly by definition, Generation Xers were born roughly from 1965 to 1981 — a group of approximately 50 million 28- to 44-year-olds. Generation Y members were born mostly between 1977 and 2002, which includes more than 70 million Americans ages 7 to 32 years old.
"Generation X and Generation Y want answers quickly," says Brodsky, whose company prides itself on quick turnarounds for online inquiries. "Web information has been collected for a long time, but typically you get a next-day response. We respond to someone within 10 to 20 minutes. I think we get a hold of our prospects faster than anyone. Our conversion rate is excellent."
Promotions for New York Health & Racquet Clubs are designed to send prospects to the company's Web site. Its home page features its current promotion and encourages viewers to fill out a form for more information. The form notifications are sent directly to Brodsky, who distributes them to the appropriate people at his clubs, usually within 90 seconds, he says.
That 90-second turnaround is much faster than it was when Brodsky started at the New York Health & Racquet Club several years ago. At that time, Internet requests were processed every three months. The change was necessary since Web users are used to instant gratification online, he says, so it's important to quickly answer their requests and convert them to sales.
Consultant Karen Woodard agrees.
"It is critical that clubs check and follow up with the Web site leads immediately — faster response increases the likelihood of the sales from that lead," says Woodard, president of Premium Performance Training. "Leads generated from the club's Web site are strong, as the lead has typically done his or her homework and is interested and more educated about your club specifically."
This means people who request information from a club's Web site should be treated the same as prospects who come through the facility's doors.
However, not all club owners are able or willing to set up lead generation technology on their Web sites. Instead, some of them turn to online lead generation companies. These companies list clubs in a searchable online directory. Leads that come in from that listing are then sent to the club operator. Club owners are charged for each lead or sometimes pay a monthly fee for them.
Owners of these lead generation sites say they've recently noticed an increase in club owners signing up for their directories.
"We're definitely seeing an increase in gym owners adding themselves to our database," says the owner of one lead generation site. "We attribute that to the economy and people looking for cheaper ways to market themselves."
However, some club owners caution that when choosing an online referral company, be sure to do a Google search for the targeted keywords to see if the lead generation company you are considering appears on the first page of the search results. Viewers are less likely to visit sites ranked lower in search results, so a club may not get the desired number of leads for its money if a company isn't listed on page one.
E-mail Blasts
Targeted e-mail blasts are another way to reach customers for relatively little cost, compared with print campaigns. The e-mail blasts can be used to announce special events and offers, or to promote member referrals.
L&T Health & Fitness, a national provider of worksite fitness and wellness programs, uses member e-mail campaigns for referrals.
"A lot of our leads come from current members," says Allison Flatley, chief operating officer for L&T, Falls Church, VA. "Our most popular referral program is birthday cards. Each member gets a birthday card with coupons to give to nonmembers for a free trial. We get a 25 percent return rate, which is phenomenal. Depending on the facility and culture, many of them are e-cards."
The conversion rates for the birthday card passes range from 40 percent to 71 percent, Flatley says.
Although L & T uses its membership base for its e-mail promotion, club owners also can purchase targeted e-mail lists through agencies or online list rental companies to reach potential members.
Brodsky does e-mail blasts in conjunction with other companies already reaching his target audience. For instance, his club recently advertised in a Warner Bros. e-mail campaign that was sent to promote the movie "He's Just Not That Into You."
Ad Agencies
Despite all the online offerings, some club operators still use more traditional advertising and lead generation methods, such as print advertising and direct mail. In fact, Fitness Together, Highlands Ranch, CO, hired an ad agency to design promotional materials for its franchisees. Fitness Together is a chain of personal training fitness studios with more than 400 locations in the United States and abroad.
To build a more cohesive brand, Fitness Together worked with its agency to redesign its Web site and create new in-store displays, print ads, outdoor boards and direct mail pieces. Franchisees were given access to the materials free of charge, but they pay for their own media placement, says Sue Beranek, vice president of marketing and brand strategy for Fitness Together. She notes that franchisees sometimes band together to place ads in more expensive publications.
"We really feel like any owner or manager can stretch what we provide them to their local market," she says. "I'm hearing a lot of positives from the campaign. Franchisees are appreciative that we provided a campaign for them."
Franchisees can pay to place the ads in targeted local publications like homeowners' association newsletters or city magazines. Although its new campaign used a variety of media outlets, Fitness Together is still exploring other options, including more online solutions.
"We are looking at new vehicles to reach the public, such as outdoor boards at the train stations in New York, to testing e-mail blast and direct mail combinations," Beranek says. "Things change, and even though direct marketing has worked for us, we're always looking for new things because who knows what 2009 might bring?"
For many club operators, 2009 is bringing a new approach to lead generation that includes more online marketing, combined with traditional solutions, to reach new member prospects who are increasingly turning online for information.
Read the sidebar, SEO and Social Networking, for more information on how these tools can help club lead generation efforts.