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Research: The US member journey in the age of COVID-19
Stephen Tharrett, co-founder, ClubIntel
For the US health and fitness industry, 2020 was a year framed by the unrelenting, random and often exponential growth of COVID-19, and the spillover of disruption and destruction this has caused for fitness operators, employees, and members.
The pandemic has wreaked havoc on the fabric of the industry and since March 2020, national and local governments have mandated one or more rounds of temporary facility closures, with some as short as 60 days and others lasting six months or more.
For some US operators, these closures resulted in Chapter 11 bankruptcy filings and/or permanent business closure. By some estimates, 20 per cent or more of US health and fitness businesses met extinction in 2020 due to COVID-19.
However, it’s the consumer who is the ultimate arbiter of our industry’s survival and as a result, it behoves us as operators to dive down and understand how COVID-19 is influencing member behaviour and perceptions with respect to their fitness journey and their return to the gym in the US.
Understanding the member journey
In June 2020, ClubIntel launched a longitudinal study of the member journey. The initial study explored the behaviours, experiences, and sentiments of 2,000 members over the age of 18, balanced by gender, generation, and geographic region within the US.
The results of that study were released earlier this year in a report entitled What Members Say Matters. In early November, ClubIntel launched a second survey of these same members that explored how the attitudes, behaviours, sentiments, and perceptions of this member population had changed since the earlier survey.
The goal of these two surveys was to garner a greater understanding of the member journey and how it might frame the types of changes fitness operators need to consider if they want to prevail and succeed in this era of COVID-19.
This article will begin by highlighting some of the key findings from the study, then offer some thoughts on what they mean for the industry going forward.
At the time this article was written a vaccine was rolling out in the US and UK. The roll-out will take at least a year. During that time, other steps will continue to be taken by communities to stem the tide of COVID-19.
Fitness operators will still be touched by government restrictions and low consumer confidence around the safety of returning to a fitness facility. As a result, understanding the dynamics of the member journey can help operators reframe their business approach and hopefully enhance their survival rate. In the end, it’s not just about dancing in the rain, but being the best dancer in the rain.
Those who seek a more in-depth look into the information and insights are welcome to visit the ClubIntel website at www.club-intel.com and download a complimentary copy of the full report.
• 70% of US gym members either agree or strongly agree their facility is properly addressing their safety concerns around COVID-19 in the way it is operating
• Approximately 60% of US members said their gym offered digital fitness content or fitness video on demand
• Women in the US are almost twice as likely as men to be using the video on demand content provided by their facility
• 44% of members reported using their gym’s video on demand service in addition to exercising at the gym
• 68% of US fitness facilities have reopened, 32% have not
• 18% of US members say their facility has permanently closed. This means 56% of reported closures were permanent
• Boomers in the US (56 to 74 years old) were significantly more likely to return to their fitness facility when compared with Gen Z or millennials. Boomers were also the least likely to have cancelled during closure, although they displayed the lowest level of confidence in the safety practices being implemented
• 34% of members have returned to their former facility, another facility, or engaged with a digital middleman. 26% returned to their former facility, representing 76% of returns
• Of those who returned, 44% returned the first week their facility was open
• 66% of members have yet to return to the gym. Approximately 48% of these are due to the facility not being open
• 20% of members have stopped exercising altogether
• 57% of non-returning members say the reason they haven’t returned is a lack of confidence in the pandemic being sufficiently under control
• 28% of non-returning members indicate they’re not confident fellow members will abide by proper safety policies
• 27% are not confident gym managers will adhere to safety procedures
• 82% of members said they’re not aware of a member and/or staff person testing positive for COVID-19, with 18% reporting they ARE aware of there having been a positive test
• US Women were twice as likely as men to have heard of a member or staff person testing positive for COVID-19
• US Women were significantly less confident in the steps their facility is taking to address their safety concerns
• In the US, women are marginally more likely to have cancelled their membership during closure, and marginally less likely to have returned to their facility (23% vs 29% for men)
• Gen Z and Millennials in the US were the least likely to report returning to their former facility after lockdown and when they returned, were the most likely to engage with the facility’s video on demand
• Key ways of providing a COVID-19 safe environment are seen by gym members in the US as: facility management being transparent in communicating to members if staff/members have recently tested positive; gym staff conducting daily temperature checks; management confronting and removing users that do not comply with safety policies; staff disinfecting equipment after each use by members; and staff wearing protective gloves
W Edward Deming famously exclaimed: “Change is optional, because survival is not mandatory”.
The survival of the fitness industry, as well as many fitness operators, is, therefore, not mandatory.
Fitness operators who seek to pull through this random and cruel era will need to embrace change. Not cosmetic change, but deep-down, foundational change.
Until consumers in the US are confident the pandemic is under control, only the most ardent will return. Few things an operator can do will overcome this dynamic. As a result, some US fitness operators will need to adjust their value proposition to garner more revenue from fewer members.
Prior to COVID-19, women represented a larger portion of industry memberships than men, Millennials represented the largest segment of membership, and Gen Z – the largest generation in U.S. history – was emerging as the audience of the future.
These groups had the highest cancellation rates, the lowest return rates, the least confidence in what operators are doing safety-wise and are the most inclined to use video on demand, so getting these populations to return and remain will require a paradigm shift within the US fitness industry.
Business models that garner profit from having 50 per cent or more of dues-paying members never showing up are in for a rough ride. The pandemic has put a major hurt on the ‘pay and no play’ business model.
Going forward, especially among women, Gen Z and millennials, transparency and trust will be an important currency for survival.
Practices such as auto-renewal, billing during closure, excessive small print, onerous cancellation policies, restrictive freeze policies, and treating members as hostages rather than royalty all played a role in the low rate of return among some members, especially women and the younger generations.
A larger percentage of members in the US, especially women, Gen Z and Millennials are now embracing the regular use of video on demand, compared to small group training and personal training. The rate of VOD uptake among returning members is two to three times higher than those former revenue stalwarts – personal training and small group training. ●
Stephen Tharrett was a co-founder, along with Mark Williamson, of ClubIntel a brand insights firm serving the health/fitness industry. Stephen was a former CEO of the Russian Fitness Group and former President of the IHRSA Board.
Stephen Tharrett, a much-loved member of the global fitness community, died on December 22 from a heart attack.
A few days before his untimely passing, Steve penned this article for HCM, saying he had great faith in the sector, given its resilience in facing the challenges of the pandemic.
We publish it to honour his life and work and his invaluable contribution to the industry – with his trademark proverbs firmly in place. Steve was a huge supporter of HCM and as a team, we are grateful to have been blessed with his wise counsel, kindness and encouragement.
Liz Terry, editor, HCM
