Why is Virtual Fitness a Good Investment for Club Groups?

Wexer Blog

17 September 2015

By Paul Bowman, CEO at Wexer Virtual

Looking back only 3 years, when I worked in club operations, conversations around virtual fitness were more of a theory and ‘great idea’ rather than a key delivery mechanism for group exercise. This is now no longer the case, as the majority of the top clubs globally have clued up to the importance of returning value on their studios as well as an attraction for group fitness users, as we know group exercise users keep their membership longer than non-group fitness users.

The fitness industry talks about the need for technology in order to best serve members and finally this is being adopted and implemented at club level as our industry and club owners recognize that today’s consumers want flexibility. If you, as part of this equation, want to offer group exercise classes at all times during opening hours, virtual classes are the only thing that makes sense. The significant change is due to constant improvement in both content and delivery mechanism (size and type of screen, audio, lighting). There is a great likeliness that we will continue to see virtual gain momentum due to this, as more high quality content is being developed and the technology is constantly evolving, allowing an even better end-user experience at a lower cost. However, in the same period of time, we have seen an increase in the flow of members from virtual to live classes; an increasing amount of club groups report more than a 10% uplift in their live class attendance, following their implementation of virtual, showing how virtual and live co-exist in harmony. My conclusion is that virtual will most likely raise the bar in regards to how well an instructor needs to perform but will never replace the instructor.

To understand if group fitness is a good investment, you need to understand your members’ usage pattern and preferences. For most clubs, who manage their group exercise offering well, the attendance of group exercise classes is high enough for it to be a profit center.

It is fairly easy to put up a very simplified return on investment calculation, looking at the total cost relating to group exercise and its total income. It is, however, not always so easy to tell what part of the total membership fees can be directly related to group exercise. If you have 30% of you members doing group exercise – would you only have 70% of your members left if you took out group exercise? Maybe – maybe not.

Looking at virtual in this perspective, it is proven that it has marketing value and it is expected to have a positive effect on retention. However, looking at hard numbers, clubs should ask themselves what the value is of a service that can (currently) take 5-15% of the traffic in the club. Making the easy calculation, if you take 5%-15% of your membership income – would that be more or less than the cost of virtual? Our cases typically show a 600-1,000% return on investment applying this methodology, which can be argued, but no matter which way you run numbers on virtual, it will show a significant return on investment, which is obviously the final and most significant argument to why virtual is becoming a must-have in clubs around the world.

More recently we are seeing an increasing amount of club groups combining virtual with live instruction, either to make the live class even more engaging or to free up the instructor to allow for more enhancement or the ability to enhance the instructor’s interaction with the participant. Therefore, virtual being used alongside live delivery, further increases the value proposition as the reach of virtual goes beyond the 5-15% using virtual solely and begins to enhance the experience for the 30% using live classes. First movers are now taking virtual on to the gym floor to increase usage of functional equipment now available, increasing the potential investment return further.

AuthorPaul Bowman