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Research: True value
Operators may have to increase membership fees to offset soaring costs, but would members tolerate prices rises? HCM talks to Julie Allen about a new Leisure-net pricing study
With leisure providers experiencing eye-watering hikes in energy costs and some memberships still not yet back to pre-pandemic levels it’s only a matter of time before some operators will be forced to pass at least some of these costs on to the consumer.
Lockdowns have made working out from home a viable option for many and the continued hybrid working model may strengthen the argument for terminating their gym contract if members don’t believe they’re getting value for money from their monthly membership. Armed with this knowledge, some operators are understandably cautious about applying any increase to membership fees.
A new Price Rise Sensitivity Report from Leisure-net shows the impact of potential increases on membership fees on customers across the UK.
“We’ve launched a new Consumer Insight Panel that has access to over 62,000 participants and gives us the option to do user and non-users research.” says Leisure-net’s Julie Allen.
“The platform allows a variety of question types, including sentiment analysis, to determine feelings towards the desired questions.
“It can also be used to test and benchmark ideas, explore trend relevance, review customer opinion for improved understanding and profile current or potential users within an area to give operators valuable market insight before they make important business decisions – such as increasing membership fees,” she explains.
Would members support a price rise?
Leisure-net conducted research into price sensitivity relating to health club membership fees in July 2022 using a national database and a representative sample of 400 to help private and independent gyms – as well as operators of leisure and sports centres – understand how consumers feel towards possible increases.
The report looks at price rise sensitivity by type of club (premium, low-cost, local authority and independent) and also by age, gender, region and exercise frequency. It also examined age and gender combined. Respondents were asked how they would feel about a price rise of either zero, 5, 10, 15 or 20 per cent on their current membership fee.
Overall, 42 per cent of the sample who used public centres and 33 per cent of private independent gyms/health clubs users did not want a price rise. For those who said they would accept an increase, a quarter (25 per cent) of public/sport centre users felt a five per cent increase was acceptable, along with 24 per cent of members of private independent gyms and health clubs, with the acceptance of higher increases diminishing from that point onwards.
Other topline findings show that younger men at independent gyms are most likely to accept price rises, while older women at leisure centres are least accepting of increased costs.
The survey found that 40 per cent of independent gym members would be prepared to pay up to 20 per cent more for their membership. It’s a different picture in Scotland, where nearly half of independent gym members (47 per cent) would not tolerate an increase in membership dues.
When it comes to leisure centres, a quarter of members living in London said they would be prepared to see their fees increase by 20 per cent. By contrast, 63 per cent of leisure centre members in Wales would not pay any more for their membership.
Exercise frequency impact
Digging deeper into the results, Leisure-net discovered some surprising findings.
“We were really interested to find out if the amount a person visits a facility impacts how they feel about a price rise. It did, but not necessarily in the way we expected,” says Allen.
The research showed that those who reported attending daily or a few times per week, were less likely to support an increase of more than 10 per cent, with the majority accepting a five per cent increase. Interestingly, users who attended a facility less frequently were more accepting of a 10 per cent price rise. Forty one per cent of independent gym/health clubs users who visit their facility once a month or so said they were prepared to accept a 10 per cent increase, and 11 per cent of public centre members with the same usage patterns are also happy to pay 10 per cent more for their membership.
Meanwhile, 41 per cent of members who attend daily and 43 per cent of members who attend a few times per week do not support any price increase.
“This presents an opportunity for operators to review their current member experience strategies as well as their pricing model for pre-paid and pay-as-you-go options,” said Allen.
Public/private variances
“It’s not surprising to learn that members of private/independent gyms and health clubs are more likely to support price increases than users of public sports and leisure centres, but it’s interesting to look at how the two groups differ in terms of their support for a 10 per cent increase in membership fees,” she says
“The insight gathered from our research allows operators to be agile when planning future price rises, but also provides visibility on how much members value their membership.
“While people are prepared to work out from home or outside the four walls of a club, members choose to attend their facilities for a reason – an experience. That experience needs to be delivered consistently for value to be felt and loyalty to be nurtured,” she said.
Julie Allen
