Where's the Beef? Health Clubs Fight Member Churn

Focus On: Health Clubs
Top business challenge: Attracting and retaining members
Solution: Making customer interactions easier and offering value-added, personalized services
How IT can help: By implementing CRM software and Web-based services

The gym called 24 Hour Fitness Lakeshore Towers in Irvine, Calif., looks more like a resort than the dank, dark facilities of yesteryear. Stretching across 100,000 square feet, the complex features valet parking, dry cleaning, babysitting facilities, retail outlets and, of course, tons of weights.

Along with the amenities, the business model for the $15.9-billion health club industry has evolved accordingly. Over the past decade, the number of health clubs has more than doubled to some 29,000, while the number of members has trailed more slowly, growing only 60% during the same period to 41.3 million this year, according to the International Health, Racquet & Sportsclub Association (IHRSA). About half of health club members sweat at commercial venues, a segment dominated by a handful of midmarket companies such as 24 Hour Fitness and Bally Total Fitness, each of which claims more than 3 million members. The remaining club goers are served by nonprofit fitness promoters, such as the YMCA, college-run facilities, or corporate and hotel gyms.

This was first published in December 2006

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