Fostering Member Apostles and Advocates

“Win hearts and you have hands and purses”Lord Burleigh - 1500’s

Customer Loyalty Breeds Storytellers and Spenders!Percentage of loyal customers who exhibit storytelling behaviors

Spread the Word Buy more Don't consider other products

Join social media site

78%

69%

54%

15%

Delighted and Loyal Members Stay Longer and Refer More Often!

Dissatisfied Satisfied Delighted0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Remain a Member

Leave At Risk Stay

2x more likely to remain

than a satisfied

members

9x more likely to

refer than a satisfied member

Dissatisfied Satisfied Delighted0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Member Referral

Never Might Will

The Member Experience Relationship

Loya

lty, A

dvoc

acy,

and

Spe

nd

Member Experience

Dissatisfaction and Outrage

Satisfaction Delight

Source: Customer Delight PrincipleTim Keiningham

Problem Resolution

Emotional Engagement

The Pyramid to ProfitabilityA Hierarchy of Emotional Engagement and Profitability

Emoti

onal

eng

agem

ent a

nd T

rust

Tenu

re, i

ncre

men

tal s

pend

and

refe

rral

Delighted Loyalty & Love

High TrustAdvocates & Apostles

Won’t Leave

Satisfied Satisfied with experienceNot emotionally engaged

Trust contingentVulnerable to External Choices

Dissatisfied Expectations not metDistrust engendered

AngeredPotential Detractors & Terrorists

The Member Value EquationThe operating framework for member loyalty and advocacy

Member’s Perception of

Value

ProductQuality

FacilityQuality

ServiceQuality

EmotionalQuality

Price Time

Commodities of the ClubDrivers of Satisfaction

Advocacy/Loyalty Differentiator

A Comparison of Two Club Value Propositions

High Fees, High Dues

EQ

SQ PQ

Low Fees, Low Dues

Price

FQ

Luxury Club Loyalty Proposition Budget/Economy Club Loyalty Proposition

FQ

The Member Value EquationHow one club’s members expressed it!

Emotional Quality (EQ)

Service Quality (SQ)

Facility Quality (FQ)

Product Quality (PQ)

Price and Time (PT)

• Members are proud to belong to the club• Members have established enduring friendships• The Club helps Members achieve fitness goals

• Tenured staff provides comfort and security• Staff demonstrate sincere caring and attentiveness• The club communicates transparently and

frequently

• The facilities are very clean and well maintained• The club offers a variety of high-tech equipment• The wet areas with sauna, steam and whirlpool are

unique in the market

• The club has a great spa offering• The club has cutting-edge mind body classes• The club regularly introduces new programs and

services targeted toward our interests

• The bonus program provides great opportunity to get discounts on in-club services

•The 30 minute classes make it easier to get in and out

The Experience Creates Loyalty and Advocacy The Real Picture of the Member Experience

Member Experience Member Beliefs & Feelings Future Behaviors

Member Pridein Belonging

Appearance and Condition of the Physical

Environment

Staff Knowledge, Attentiveness and Empathy

Social Environment and Opportunities for Building

Relationships and Connecting with Community

Love My Club Member Delight

Will Remain a MemberWill Recommend

Brand EngagementConnections & Relationships

Brand AdvocatesApostles, Advocates & Fans

Measures of Loyalty and AdvocacyMember Delight…How well are you doing with FQ, PQ and SQ?

30% 35% 37%

51%51% 51%

11%9% 8%

7% 4% 4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

September 2009 April 2010 October 2010

Not satisfied

Could be better

Acceptable

Satisfied

Fully satisfied

12% 21%

*Clubology Metric = Top – Bottom 3 as %

25%*

Measures of Loyalty and AdvocacyHighly Likely to Remain…Emotionally Engaged and Don’t Want to Be Without You!

19% 19%

*Clubology Metric = Top – Bottom 3 as %

27%*

33% 37% 36%

54%53% 55%

11% 9%8%

2% 1% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

September 2009 April 2010 October 2010

Definitely Will Not

Probably Will Not

Might or Might Not

Probably Will

Definitely Will

Uncover Key Loyalty DriversExample of the Underlying Influences on the Big Four

Pride in belonging

Relationships with other members

Attentiveness and recognition from club staff

Club's image in the community

Relationships with fitness staff

Variety and quality of group X programs

Ability to get assistance with fitness program

Ease of bringing friends as guests

Convenience of using facilities

Availablity of fitness equipment

Ability to meet other members with similar interests

Variety of fitness equipment

Cleanliness of the club facilities

Availability of amenities in the locker rooms

Cost of additional services (e.g., food, lessons, etc.)

0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90

Importance of Driver to Members

Prioritizing & Leveraging the DriversKnow How Member Priorities and Club Performance Align!

Attentive staff

Background music

Clean floor areas

Clean locker rooms

Clean showers

Comfortable environment

Conducive environment for new relationships

Cost as compared to competition

Cost for personal training

Cost of kid's membership

Cost of membership

Cost-Quality Ratio

Design and decoration

Drinking water availability

Drinking water quality

Environment in general

Feeling of exclusivity

Image of the brand

Inform about the club's services

Knowledgeable staff

Latest press

Locker rooms are adequately supplied

Medical Personell

Opportunities to include family, friends

Opportunities to meet people from the same social

circles

Personal assistance if desiredPhysical layout of the spaces

Pride in belonging

Professional reception

Professional sales managers

Professional trainers

Promptness of receiving informationQuality of locker

room necessities

Reference by name

Reputation of my clubResponsiveness to

requests/questions

Safes for the valuable things

Satisfaction with Gym

Sauna overall

Security for valuables

Temperature of facility

Towels quality

TV broadcast/channels

Varied pricing and membership categories

-70

-50

-30

-10

10

30

50

70

0.25 0.3 0.35 0.4 0.45 0.5 0.55 0.6 0.65

No sig. changes

Improved

Declined

Reallocate Resources Protect

Focus on Improvement

Mem

ber S

atisf

actio

n

Importance of the attribute

The Impact of Member Tenure on LoyaltyHow Member Tenure in One Company Held a Few Surprises

35 % 33 %32 %

27 %

13 %

52 %50 % 51 %

45 %

39 %

21 %23 %

25 %

30 %35 %

0 %

10 %

20 %

30 %

40 %

50 %

60 %

Less than 6 months

Half a year One year Two years More than 2 years

Overall Evaluation

Likely to recommend

Likely to renew membership

Find Out What Your Members Say About the Value Proposition!• Discover what the members have to say and measure it• Uncover the drivers of the value proposition (FQ, PQ, SQ, EQ, Price and Time)• Clarify the major drivers of each component of the value equation

Focus On Identifying the Strategic Priorities of Your Value Proposition !• Create a matrix and determine what drivers need your focus • Develop a master strategy around the priorities (what resources need to be applied

where)

Craft Your Brand Promise and the Brand Story!• Create a compelling brand message (purpose, tone, and story)• Build your story and script, and use that to model the experience(s) you deliver• Create standards for the brand’s delivery and share them with everyone

Foster Your Internal Culture to Execute on the Brand Promise!• Clarify and codify the underlying cultural imperatives needed to deliver the promise.• Measure performance against the standards (specific metrics )• Share the results, and reward achievement of your metrics

Getting to Member Loyalty and AdvocacyA Business Progression to Enhance Loyalty and Advocacy

Member Loyalty and AdvocacyWhat business experts have said about customer loyalty and its consequences

“Win hearts and you have hands and purses”Lord Burleigh

“Do what you do so well that they want to see it again and bring their friends.”

Walt Disney

“You don’t earn loyalty in a day. You earn loyalty day-by-day.” Jeffrey Gitomer

“Talk to people in their own language. If you do it well, they’ll say, ‘ God, he said exactly what I was thinking’. And then they will follow you to death”.

Lee J. Iacocca

“Repeat business or behavior can’t be bribed. Loyalty has to be earned.”

Janet Robinson

Insight…We begin by seeking to understand, followed by analyzing the data, resulting in a story only the numbers can tell.

Inspiration…with the numbers in hand, we generate those “magic facts” that tell you the real story about your business and its impact on your bottom line.

Impact…with inspiration driven by insight, we assist you with developing and executing strategies that drive greater loyalty and profitability.

Stephen Tharrett, Co-founder and Principal | stevet@club-intel.com | 972.746.7605• 20 years leading athletic, golf and tennis as VP and SVP of Operations at ClubCorp • 2+ years as CEO of the Russian Fitness Group• 10+ years as a consultant in the fitness and private club industry• Author of 8 business books on the club industry• Former president of IHRSA

Mark Williamson, Co-founder and Principal | markw@club-intel.com | 214.232.2389• 17 years heading up employee and member insights as VP of Research at ClubCorp International • 5 years as Senior Director of the Guest Experience at Brinker International (e.g., Chili’s, Maggiano’s, On the Border, Romano’s

Macaroni Grill, Corner Bakery)• 2+ years as Executive Director of Consumer Insights at Applebee’s• 2 years as Director of Research at Match.com