Marketing Plan for Snap Fitness Essay

Executive Summary With today’s society stressing a greater demand for flexibility, and ease of access to goods and services, a trend has emerged for extended trading hours for service organizations. One of the main profiteers of this trend is gym franchises. With over 1 billion people in the global population being overweight, and the still present economic uncertainty leading to longer working hours for most people, there is a demand for less rigid opening and closing hours of gyms. Consequently, the boom of the 24 hour gym came about. 3C’s Analysis The following section contains an analysis of the company, customer and competitors of Snap Fitness. Analysis of the Company The Snap Fitness franchise has become a global leader within the budget health club industry since starting in 2003. It has since established a large client base of over 1 million members in over 2000 clubs worldwide and 100 clubs throughout Australia (Sloan, 2014). Snap Fitness provides a 24/7 service with limited staffed contact hours ranging from 30 to 40 hours per week, and utilises a â€Å"no-contract† payment system. Additional services include high quality targeted fitness classes, nutritional consultation and access to accredited Personal Trainers. Snap Fitness was ranked by Entrepreneur Magazine as No.1 â€Å"Best in Category’ for fitness franchises in 2009. As well, Inc. Magazine at No. 16 on its annual â€Å"Inc 500† which is a list ranked by Inc Magazine of privately owned businesses. (Snap Fitness, 2014) Customer Analysis A gym can essentially recruit any type of person interested in fitness to sign up because of the variety of services offered, such as weights, cardio machines, group fitness sessions, dieticians etc.. This being said, 60-70% of Snap Fitness customers in Australia are already â€Å"experienced gym users who just want to get in and get started† upon joining (Australian Leisure, 2010). This leaves around 30-40% of members to be inexperienced gym users  that will require help getting started, whether this is by group fitness sessions or personal training sessions. Snaps Fitness offers low prices and the gyms are open 24/7 meaning potential Snap Fitness members are seeking convenience rather than quality. Snap Fitness doesn’t have facilities such as saunas and pools etc. that other gyms such as Fitness First regularly feature and the size of these gyms are smaller in comparison to other big gyms such as Goodlife, and Genesis. This means that Snap Fitness will generally attract people who work out recreationally a few times a week as opposed to a bodybuilder who is training for competitions and would benefit from these additional services. In Australia 13% of the total adult population participate in fitness activities. Within this segment the most significant demographic is the age group bracket is 15 to 34 years in both the female and male segments and females aged 34 to 54 years. Overall there is greater female (16% of the population) participation then male (9.4% of the population) across all age brackets (Australian Bureau, 2009). Analysis of the Competitor With the market for gym-goers being so extensive, there exists steep competition between gyms for patrons. One such competitor of Snap Fitness is Jetts gym. A membership with Jetts is slightly more expensive than Snap, costing $13.95 per week, with an additional joining fee of $89 and $59 for an access card. Jetts also offer an advance 12 month membership, costing $549, paid in one lump sum at the time of joining. Jetts offers its members 24/7 access to all of its 200+ clubs in Australia with the use of the swipe card, delivering a high level of convenience for its members (see figure 1.2). However with Jetts, as opposed to Snap Fitness, once the card is registered in the security system, no further registration is required to gain entry to multiple clubs – the card is usable immediately, creating convenience for its members. (Jetts, 2014) However, unlike Snap Fitness, Jetts has no member benefits to retail outlets or other service centres. Jetts has received a Canstar award t wo years running. For the years of 2012 and 2013, Jetts was voted as the No.1 gym chain in Australia for customer satisfaction. (Jetts, 2014) Another similarly competitive gym is Stepz. As well as operating 24/7, Stepz is entirely Australia owned, with clubs only within Australia. While this, to some people, would be a selling point, it  also poses a threat to Stepz whereby is creates less convenience for its patrons by having fewer clubs members can attend (see figure 1.2). (Stepz, 2014) A Stepz Memberships costs $13 a week, with a one-off joining fee of $89, payable upfront and an access card fee of $55, with which the member has access to any Stepz club Australia-wide. (Stepz, 2014) As too with Jetts, Stepz has no membership perks for gym members that exist outside the gym, i.e., retail discounts, etc. Stepz employs a tactic whereby the number of members allowed to enrol in each club is limited. This is done to provide the members with a more personalized service, and the staff can cater to the members needs more specifically. Also, by limiting the number of patrons, it ensures that there will rarely be a wait time to use gym equipment. (Stepz, 2014) In today’s market, there exist other types of rival services in the gym racket. Not gyms that offer round-the-clock service, rather gyms that cater specifically to the specialty needs of their patrons – gyms such as Curves. Curves is a specially designed gym catering explicitly to the needs of women. Founded in 1992 in Texas, today Curves has clubs in over 70 countries, with over 300 clubs in Australia alone. Curves is the largest company being analysed in this competitor analysis (see figure 1.2). Memberships at Curves cost $18.24 a week, with a $149 joining fee. By far – out of Snap, Jetts and Stepz – Curves is the most expensive gym (see figure 1.1). However, Curves, unlike the others, has tailor-made programs targeted directly at women, for women, by women. This creates a community among the club members and enables the staff and trainers of Curves to have a competitive edge in the service industry, offering a one-of-a-kind service catering only to the needs of women. (Curves, 2014) Gyms such as Curves and Contours (another gym aimed specifically at the needs of women) has created a whole new market segment, which poses a threat to existing generic gyms, and even those that are 24 hours. Gyms that are specially designed for women may take business away from other gyms such as Snap, as a result of such gyms not exhibiting greater dedication or focus to individual needs of groups in the market segment (ie. Female gym-goers). Analysis of the 4P’s: Product Membership entitles the user access to all the gym equipment (including  cardio and weights), group workout sessions and, one initial free PT introduction session with a qualified instructor including; a weight and measure, guidance while using machines and an initial workout plan. Optional membership add-ons include PT sessions, consults with a qualified dietician and 8 week challenges. Price Single membership, joint membership and family memberships are available. The price for single membership is $25 a fortnight; this currently includes group workout sessions and access to all types of training equipment. Joint and family memberships are generally charged at a discounted rate such as $17 each a fortnight for a family membership consisting of a husband and wife. A membership with Snap is not a lock-in contract, and in addition to the fortnightly fee there is a one-off joining fee of $99, paid upfront and a further $29 for the Snap access card. Place A typical location for a Snap Fitness outlet is a high profile business strip or mall, with cafes, small convenience stores and a post office. Locations normally have access to close parking and provide a well lit exterior to ensure the safety of clients using the premise during irregular hours. Currently the most successful Snap Fitness business is located in Milton and through location analysis it was found that Snap Fitness Strathpine also possesses many of these important location characteristics (Australian Leisure, 2010). Promotion Snap Fitness promotes itself as a convenient (open 24/7 and membership grants access to any Snap Fitness location) and budget gym with a focus on physical wellbeing of young adults. Snap Fitness often has one core promotion consisting of a limited, one time offer of free joining and 1 week free gym access. If this offer is not running potential members do still get a free one day trial. Snap Fitness also have offers for current gym members such as â€Å"refer a friend† and get a month free. A consistent message present throughout promotional material is that there are no membership contracts. This means that if a member wants to leave it is a simple process and will be no cancellation fee. With a gym membership to Snap Fitness Strathpine, the member receives perks from organizations affiliated with Snap Strathpine. These benefits include a buy one, get one free scheme at the Strathpine Hyperbowl bowling alley, a 10% discount at Mega Choice and Mega Party variety stores, lunch deals at Outback Jacks Bar & Grill, and more. (Snap Fitness, 2014) Analysis of Customer Service Strategies (People/Processes) Quality customer service is key to an organisations survival in today’s market. For gym owners, the revenue source is in direct proportion to the membership base; i.e., if gym owners aren’t able to get people through the door, their profits will plummet. In order to ensure a gym maintains a competitive edge in the fitness industry, it is essential to provide a consistent level of high quality customer service. This plays a crucial role in member acquisition and retention. It is imperative that the quality of customer service is always top priority, to ensure repeat customers and positive word-of-mouth. (Fagan, 2013) A recent study has shown that customer referrals is the main reason why new customers hear about a business, or come into the business – with 30% of people stating a current member referred them. (Lewis, 2014) Snap Fitness offers a variety of customer services, such as being open 24 hours; having friendly, qualified staff; efficient handling of complaints; strong community presence through social initiatives and business partnerships; no lock-in contracts; 24 hour security surveillance; member benefits (i.e., retail discounts); and having innovative facilities to ensure convenience and comfort for members, such as having access to treadmills, cross trainers, rowing machines, free weights, shower and change rooms, bathroom amenities, stretching areas and group fitness rooms. (Snap, 2014) Snap’s main customer service strategies are promotions with neighbouring establishments, corporate tie ups, and social media facets. In March of this year, Peter Taunton, CEO of Snap Fitness, launched an initiative to coincide with National Public Health Week in the US. With word driven by the force of social media outlets, Snap Fitness, starting April 7, was offering seven days of free workouts, with no further obligations to Snap. This complimentary week was offered in support of public health and to get people motivated, and get potential members through  the door. (Taunton, 2014) With a strong presence within the community through ongoing social initiatives and partnerships with neighbouring establishments and other corporations, Snap fitness consolidates its standing as a people-friendly gym with a community-orientated outlook, making itself as attractive as possible for potential members. Analysis of the Service Environment One of the most significant problems Snap Fitness faces is during peak training times when the facilities are prone to becoming overcrowded (more demand than supply of equipment). Gym users dislike this mainly because of waiting times for machines and weights, and as a result some will completely avoid these peak times favouring a more secluded training environment. This is a difficult issue to resolve as Snap Fitness always wants more members, but at the same time if too many members are at the gym at a certain time members can become unsatisfied. Another issue with Snap Fitness is their process of making the entry cards inactive. It was found through a sentiment analysis (appendices) identified card denial as a significant area of dissatisfaction amongst users as often they have to come back during manned hours to resolve the problem. This problem stems from direct debits not clearing and is made worse by the fact that clients aren’t notified when this occurs (appendices blu eprint). Members of Snap Fitness have had to travel to the gym and be denied access, before realizing their card has been made inactive. A minor issue Snap Fitness faces is that its front counter is not always manned even during staffed hours. There are windows of time when all personal trainers who are in the gym are on the floor with clients, this could be for many reasons including assisting with a workout or maintenance to the facility. During this time if someone calls the gym or comes in to enquire about joining there may be no one available to meet these requests. This can lead to missed opportunities in gaining new clients, and a reputation for bad customer service. Recommendations In relation to the issue of equipment use during a session, one of the most viable solutions is to implement peak and off peak membership options. The way this would work is for people who choose to go to the gym during peak times would pay the rates currently being offered and would be able to also  go to the gym in off peak times. The members who purchase off peak membership are allowed access to the gyms at off peak hours for a discounted membership price. These members have the choice to attend during peak times when they swipe their card to enter the gym, however a small fee will be charged to their fortnightly bill enabling the membership to be flexible. It is worth noting that Snap Fitness aims to be a cheap, convenient gym, so without the option of expanding and adding more equipment, this is one of the best ways to encourage members to train at different times and prevent an overcrowded gym. The issue of card access can easily be solved through a change in the communication process meaning gym members should be informed if their payment doesn’t clear prior to the card being deactivated. This could be done by an automated text message or a phone call from a staff member at the gym. When a payment is declined Snap Fitness members should be given time (48 hours would be appropriate) to resolve this issue and make the payment. If a member still fails to make the payment after this 48 hour window they should then be informed that their card will no longer permit access to the gym until a payment is made. This will ensure members are always informed of when their payments don’t clear and if a member is unable to make this payment they can then contact Snap Fitness and work out a different payment method. A way for the manned counter be solved is having very clearly defined hours designated to man the desk (clear signage of hours at the shop front and on all adver tisement material including pamphlets). During this time there would always be someone answer phone calls and talk to people who physically enter the gym to respond to questions about joining. This way it’s clear when it is appropriate to enter the gym to ask questions in person and when the best time to call up would be. Phone messages should be kept track of and returned during these staffed desk hours to ensure all customer enquiries are being answered in a timely manner. From the evaluation conducted the recommendation with the most benefit would be introducing a distinction between on and off peak membership. This strategy could attract a lot of new members because people who train at off peak times at other gyms would see how cheap this option is and consider transferring. People already signed up to Snap Fitness could also be  interested in cheaper memberships and could change their workout times from on peak to off peak, which would reduce some of the clutter in the gym. This would then help to reduce overcrowded gyms during peak times, which would then increase the enjoyment of on peak members because they would have less waiting time for equipment. Currently the gym is often close to empty at off peak times and having this extra influx of people there at these odd hours is extra money Snap Fitness could capitalize on with its 24/7 system. Appendices Appendices 1: Price positioning map High Price Curves Snap Fitness Jetts Stepz Low Price Appendices 2: Size positioning map Large in size Curves Snap Jetts Stepz Small in size Small in size Appendices 3: SWOT Analysis SWOT Analysis Strengths Weakness Large established client base Known brand name Customised workouts Well trained staff/ PT’s Open 24/7 Can go to any Snap Fitness centre No contracts – monthly payment plan Yoga & fitness classes Range of machine types 7 day trial period Accredited dietician Lockers to secure valuables 8 week challenge programs – club bonding Limited staff resources – not always manned Waiting times for equipment in peak times Smaller gym – less equipment, space and more demand on staff Opportunities Threats Potential partnerships/ sponsors – currently have some with local businesses (e.g. cafe discount) New membership types e.g. based on consumption times/types Paying for one group class without buying a membership Additional services e.g. Steam room, juice bar New health trends – types of classes offered e.g. Zumba Community orientation Expand existing complexes Discounts for locals Widespread competition such as home gyms and other similar companies such as Jetts Unmotivated staff Decreased interest in fitness Being a small, budget gym expansion opportunities could deter clients as they prefer a smaller business Original Service Blueprint Within this blueprint several key bottlenecks were identified, these include contacting the gym Booking into sessions Equipment usage Updated Service Blueprint Reference List About Us – Overview. (2014). Retrieved 4th May, 2014, from http://www.curves.com.au/about-curves/ About Us. (2014). Retrieved 1st May, 2014, from http://www.snapfitness.com.au/about-us/ About Us. (2014). Retrieved 4th May, 2014, from http://stepzfitness.com.au/about-us/ Australian Bureau of Statistics. (2009). Feature article 2: health and fitness centres and gymnasia (no. 4156.0.55.001). Canberra, Australia. Australian Leisure: Snap Fitness Plans for 200 Clubs. (2010). Retrieved from Current Levels of Customer Satisfaction at a CrossFit Gym. Digital Commons @ USU. Retrieved from http://digitalcommons.usu.edu/cgi/viewcontent.cgi?article=1241&context=gradreports Curves Community. (2014). Retrieved 4th May, 2014, from http://www.curves.com.au/community/ Fagan, L. (2013, October 4). What is gym customer service? Retrieved from http://blog.gyminsight.com/2013/10/what-is-gym-customer-service/ http://global.factiva.com.libraryproxy.griffith.edu.au/redir/default.aspx?P=sa&an=NLJ00000 20140217ea2h0000q&cat=a&ep=ASE http://www.ausleisure.com.au/news/snap-fitness-plans-for-200-clubs Lewis, S. (2013). An Online Customer Service Survey to Determine Memberships. (2014). Retrieved 4th May, 2014, from http://stepzfitness.com.au/memberships/ Prices. (2014). Retrieved 3rd May, 2014, from http://www.jetts.com.au/prices Public Health Week. Retrieved from