Simon Pardoe - Marketing & Business Development

The Consultancy was asked to undertake an assessment of the current membership (of an up-market health club) relative to the size and demographic profile of the local residential population.  The objective being to provide re-assurance that there was (or was not) a strong enough local demographic to allow the club (with its premium priced membership) to increase membership by + / – 1,000 and thereby justify the investment in expanding and enhancing the club’s facilities.

Demographic Profiling – Members

We therefore commissioned an appropriate data profiling agency to analyse the current membership.  It did this courtesy of their postcodes.  We then analysed the mass of data and presented it to the client in an ‘easy to digest’ format.  The results showed that 61% of current members fell into the top flight (classified as ‘Symbols of Success’) and 30% into the next flight (‘Urban Intelligence’).

Demographic Profiling – Local Residents

Once this was undertaken, we moved to the next stage and profiled all residents within (a) a 1 mile radius of the club and (b) a 1.5 mile radius of the club.  Objective: to compare the Membership Profile against these two catchment areas in order to assess the size of the potential untapped market for members, i.e. how many residents were there in these radii who fell into the same demographic categories as existing members. (Naturally, there would have been a great deal more potential members living more than 1.5 miles from the club but we had agreed to make the research as concrete as possible, in the knowledge that penetration rates fall off dramatically – for adult only health & fitness clubs – the further away from the club you go.)

Results

36% of the residents within 1 mile of the club were classified as ‘Symbols of Success’, i.e. 45,000 people.  47% of the residents were classified as ‘Urban Intelligence’ adding a further 59,000 people to the potential market (i.e. individuals with the same demographic profile as current members).  The existing club membership had a percentage penetration into these two groups of just 0.87% and 0.33% respectively.

This clearly indicated that there was a very significant untapped membership market within 1 mile.  A percentage penetration rate of just 0.5% in each of the two primary Membership Profiles would achieve a further 1,000 members.  If we added the number of residents residing from 1 mile to 1.5 miles from the club, an additional 53,000 and 45,000 individuals were potentially available.  This further strengthened the opportunity for the club to expand its membership successfully by + / – 1,000.

The investment in new facilities went ahead.  Membership was successfully increased by 1,000.