Membership Development in the Fitness Industry (Essay Sample)

Membership Development in the Fitness Industry
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Word Count: 11,580
OMP Consulting Project Agreement
Acknowledgements
Glossary of Terms
Extrinsic motivation: This is the motivation caused by external factors, including rewards offered for portraying the desired behaviour and the threat associated with the likelihood of giving punishment for misbehaviour.
Intrinsic motivation: Motivation that emanates from internal factors, such as emotional and physical needs.
Kano model: A theory of customer satisfaction developed by Professor Noriaki Kano in the 1980s, focusing on the development of product and satisfaction of human needs. The model categorises product attributes into five groups, such as “must-be quality” and “attractive quality”.
Motivation theory: Any one of a set of theories dealing with internal and/or external motivation. The different theories break down into two categories: content (what motivates people) and process (how the motivation works).
PESTEL (political, economic, social, technological, environment and legal) analysis: A framework or tool used by marketers to analyse and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization.
Porter’s Five Forces analysis: A framework by which to analyse the level of competition within an industry and business-strategy development.
SWOT (strengths, weaknesses, opportunities and threats) analysis: A study undertaken by an organization to identify its strengths, weaknesses, opportunities, and threats.
Table of Contents
TOC \z \o "1-3" \u \hOMP Consulting Project Agreement 2
Acknowledgements 3
Glossary of Terms 4
Executive Summary 6
Introduction 10
Research Methodology 13
Literature Review 18
Analysis and Discussion 32
Recommendations 45
Implementation Plan and Schedule 48
Conclusion 52
Appendices 59
Appendix 1 - Primary Research - Online Survey Questions 59
Appendix 2 - Primary Research - Interview Questions 61
Appendix 3 - Primary Research - Interview Graphs 63
Appendix 4 - OMP - C Proposal 67
Appendix 5 - OMP - C Time Log 74
Appendix 6 - Client Presentation Slides 75
Appendix 7 - SWOT Analysis 84
Appendix 8 - PESTEL Analysis 87
Appendix 9 - Porter Five Forces Analysis 89
Executive Summary
This research project focused on Axxis Gym, a fitness club located in Edmonton, Alberta, Canada. Axxis’s managers recognized that the competitive landscape was changing the needs of its 748 members. Although Axxis is currently experiencing a small but steady increase in membership, its managers want to strengthen the business even further to meet long-term challenges. In order to actively increase their membership and thus continue to succeed in the fitness industry, the business owners need to understand why people choose one gym over another in general, and why current Axxis members in specific chose Axxis as their gym. Armed with this understanding, Axxis management will be better able not only to retain the members it has now, through meeting those members’ needs more effectively, but also to attract new members and thereby increase its membership base.
The objective of this project is to answer the question, “What steps does Axxis Gym need to take to grow its membership base and thus remain competitive in the fitness industry?” Since any gain in new members would be offset by an equivalent loss in current ones, this question equally involves issues of retention and attraction. The project therefore undertook, firstly, research of secondary academic and non-academic sources regarding fitness-member motivation, consumer buying behaviour, customer-satisfaction theory, strategies for increasing fitness-centre membership, and growth trends in the fitness industry overall.
Primary research was then conducted. This research was composed of two parts: 1) in-person interviews with current Axxis members about their experiences with, perceptions of, and suggestions for the fitness centre; and 2) an online survey about gym-membership choices with Royal Roads University MBA students who were also members of an Alberta gym other than Axxis. This primary research provided the qualitative data necessary to let Axxis managers understand the current state, including gym-users’ motivations and factors that influence buyer behaviour.
Existing academic literature provided information about the motivational factors responsible for customer satisfaction and loyalty. Some of the studies indicate that members’ attitude, and especially their motivations for using a gym, determines the extent to which they feel loyal to any particular fitness facility. For instance, Watts (2012) asserts that the attitude of members in the fitness industry determines aspects of attraction of new members and their retention. This suggests that in order to become the gym of choice over its potential competitors in the market, Axxis should put its main focus on factors that enhance its members’ (and non-member users’) motivation, increase their satisfaction rates, and heighten their interest in the facility.
Given that the process of membership development is strongly motivation-related, motivation theories focusing on drive and incentive were used as a theoretical framework to better understand the drives responsible for attracting and retaining customers. As well, the Kano model was used to highlight three main factors (e.g. basic needs levels of performance and excitement) that are crucial for strengthening the membership of gym facilities such as Axxis.
As mentioned, an online survey was conducted about gym-membership choices with Royal Roads University MBA students who were also members of an Alberta gym other than Axxis. These participants were selected randomly, with responses received from both male and female participants. Primary research also involved conducting in-person with current Axxis members regarding various factors that motivated them to join the facility, as well as aspects of the gym that they would like to see improved to further attract other members to join Axxis. In order to analyse the data and establish inferences from which to make conclusions and recommendations, the study adopted a descriptive statistical approach.
Four recommendations were made in relation to this research. The first recommendation focused on the retention of Axxis’ current membership. This involved employing customer-service strategies that exceed member expectations, with the end-goal being to reduce customer defections and thereby achieve strong member loyalty. The second recommendation involved the achievement of growth through implementing new-member orientation programs designed to reduce accidents and make members feel welcome. The third recommendation involved creating a sense of community for members through a supportive, close-knit environment that promotes habitual attendance and creates a fun place where people come to enjoy themselves, work towards their fitness goals, and socialize. The fourth recommendation involved using workshops and clinics to provide educational value through partnerships and collaborations.
Finally, the project suggests an implementation plan, offering a membership-increase strategy. This strategy establishes the necessity of creating a sense of urgency around the change, communicating the vision, empowering employees to act on it, and embedding the changes in the corporate culture. Once adopted, these recommendations will help managers and owners to fully understand and support the rationale for the suggested recommendations, and increase the membership in the process. By using the information and analysis provided in the primary and secondary research, the recommendations that address related issues, and the suggested implementation plan, management can make the informed decisions necessary for ensuring increased membership. This should leave Axxis well-positioned to handle the ongoing challenges and changes in the fitness industry by continuing to develop its business and be in a better position to attract more members.
Membership Development in the Fitness Industry
Incorporated in 1998, the Axxis Gym (Axxis) was called Axxis Fitness Limited until 2012, when new owner Stephen Forberg changed it to its current name. The gym operates under the Alberta Corporation, and is based in Edmonton, Alberta. The centre’s hours of operation are 5 a.m. to 12 a.m. Monday to Friday and 8 a.m. to 9 p.m. on holidays, Saturdays, and Sundays (Axxis Gym). The gym’s facilities include cable-based weight machines, kettle bells, a wide range of free weights, and a large cardio theatre. After workouts, members have access to infrared saunas, with tanning beds available for interested members to purchase tanning sessions. In the entrance to the gym, there is a pro shop selling fast-food items for members’ refreshment. In addition, Axxis has a fresh presto juice bar from which food items and smoothies are sold. The smoothie items include Cookie Monster, Mr. Universe, Monkey Madness, Berry Buff, and Berry Lean. Food items include Mexican chicken wrap, Thai chicken wrap, chicken Caesar wrap, and Egg-white wrap.
Within the North American Industry Classification System (NAICS), which categorizes organizations based on the activities in which they are primarily engaged, Axxis operates under code 71394, the Fitness and Recreational Centre industry (Statistics Canada, 2012). This industry comprises establishments operating health clubs that feature exercise and physical fitness conditioning. The Canadian fitness industry has roughly 6,000 clubs, spread between small, medium, and large chains, independent operations, and hotel facilities. Edmonton has approximately 65...