Moving Forward Strategic Plays for Constructing a Membership Model that Enriches the Member Experience and Drives Revenues Study Results and Accompanying Recommendations On Membership and Pricing September, 2015 Columbia Association Pricing Study 1
Price Sensitivities and Comparative Pricing Practices “Pricing is the exchange rate you put on all the tangible and intangible aspects of your business. Value for cash.” Patrick Campbell, CEO Price Intelligently Rates shown in this presentation reflect FY15 rates which were in effect when this study was launched Columbia Association Pricing Study 2
Fitness Membership Competitively Priced but Lacks Benefits - PPP Membership Offers Competitive Benefits at Non-Competitive Price The price of an individual CA resident fitness membership inclusive of group exercise (PPP) is higher than the market average while its basic fitness membership (single fitness club with limited group exercise) offers fewer benefits at a lower cost than the market average! Health/Fitness Club Individual Membership Pricing Comparison CA Athletic Club CA Package Plan Plus Health/Fitness Clubs - 5 County Health/Fitness Clubs - Howard Country $225 $219 $85 $78 $77 $68 $64 $47 $39 $24 $10 $10 Minimum Average Maximum Howard County Fitness Clubs Visited: Anytime Fitness, Gold’s Gym, Lifetime Fitness, Quest Fitness , X -Sport Fitness and YMCA Five County Fitness Clubs Visited: Anytime Fitness, Gold’s Gym, LA Fitness, Lifetime Fitness, Merritt Athletic Clubs, Planet Fitness, Quest Fitness, Sport and Health, X-Sport and YMCA Columbia Association Pricing Study 3
90% Premium for Hobbit’s An annual CA individual resident membership at Hobbit’s Glen is 90% above the market average for similar quality golf experiences without cart and Fairway Hills is 13% higher Golf Club Pricing Comparison CA and Surrounding Five Counties Hobbit's Glen Resident - 7 Day Access Fairway Hills Resident - 7 Day Access Competitive Golf Properties - 7 Day Access $3,168 $1,920 $1,691 Individual Annual Rate Golf Clubs Priced: Bay Hills, Blue Marsh, Bowie Golf & C.C., Eisenhower, Glen Dale, Lake Presidential, Marlton, Renditions and Waverly Woods Columbia Association Pricing Study 4
Fitness Only Membership Generates a Low Price Point When survey respondents were asked what they would be prepared to pay for a gym membership offering access to all three athletic facilities including treadmills…consumers indicated they did not place much value on a pure fitness experience (no group exercise) thus the low price sensitivities. Non-CA members have lower price tolerances than CA members! Columbia Association Pricing Study 5
Group Exercise Worth Twice as Much as Fitness Only When survey respondents were asked what they would be prepared to pay for a membership offering access to all three athletic facilities and group fitness classes…consumers indicated they were prepared to pay twice as much for a fitness experience involving group exercise as it is one without it! Columbia Association Pricing Study 6
Price Sensitivity Annual Family Recreational Membership - All Responses ( Access to all outdoor pools, swim center, and sport park/skate park) 100.00% 90.00% Pools Hold Incremental Value 80.00% When survey respondents were asked what they would be prepared to 70.00% pay for a family membership offering access to the outdoor pools and Minimum = $300 60.00% indoor swim center…consumers indicated they were prepared to pay for the recreational experience beyond fitness…it has the ability to 50.00% capture a greater share of market! 40.00% 30.00% Maximum = $345 20.00% 10.00% Price Sensitivity Optimum = $315 Annual Family Recreational Membership - Non-Members 0.00% (Access to all outdoor pools, swim center, and sport park/skate park) $240 $260 $280 $300 $320 $340 $360 $380 $400 $420 $440 $460 $480 $500 100.00% Annual Dues too inexpensive inexpensive 90.00% 80.00% 70.00% Minimum = $285 60.00% 50.00% 40.00% 30.00% Maximum = $308 20.00% 10.00% Optimum = $300 0.00% $240 $260 $280 $300 $320 $340 $360 $380 $400 $420 $440 $460 $480 $500 Annual Dues too inexpensive inexpensive Columbia Association Pricing Study 7
Strategic Plays for Creating Value and Capturing a Greater Share of Market Columbia Association Pricing Study 8
Strategic Plays for Creating Value and Capturing a Greater Share of Market Strategies for Building Greater Value, Enhancing Experiences and Growing Revenues Longer-term opportunities Restructure Short-term opportunities Membership (Packaging and Pricing) Packaging, Pricing and Improve Sale of Facilities Creating Value and Additional Capturing a Greater Services Share of Market from CA’s Membership Offerings Enhance Member Restructure Delight & Sales Systems Loyalty Columbia Association Pricing Study 9
Membership Structure and Pricing Framework Critical Principles that Apply to Recommendations • All membership and pricing recommendations are based on the results of the entirety of the research (in-depth interviews, focus groups, competitive shopping and survey). • There will be seven core membership categories and each will be available as an individual, couple or family as well as there will be benefits for employees of CA-assessed corporations • A family can only have one membership type. The main cardholder determines what category of membership the family will have. No customization. • Each of the seven proposed memberships will be available in one of three sub-categories: CA resident, CA Non-resident and income qualified • Income-qualified membership is a 50% discount. We have eliminated the 40% category (those individuals will now qualify for the 50% discount) and the 75% category for the pool (those individuals would now get a 50% discount). • HOL memberships will not be add-ons as presently offered and instead be stand alone offerings. Furthermore, access to HOL’s classes and healing environments are included with proposed group fitness membership and annual golf membership offerings. • HOL will have separate stand alone membership categories but will also offer integrated membership packages. • Hobbit’s Glen will be positioned as a semi -private or high-end public course which is aligned with present market offerings and practices. Columbia Association Pricing Study 10
Membership Categories & General Benefits Proposed Membership Categories Proposed Proposed Proposed Aqua- Proposed Group Proposed Aqua- Proposed New Annual Recreation Athletic Athletic Fitness Group Fitness Proposed 5-Day Golf Golf Individual CA $30 $47 $61 $77 $97 $125 $225 Resident Price (family price) Access to outdoor X X X X pools, swim center and skate park Access to all X X X X X athletic/fitness facilities (no group exercise) Access to tennis X X X X X X X courts complimentary Access to X X X X X treadmills Access to all group X X X fitness classes , including HOL Access to Hobbits X Glen and Fairway Hills 7 days a week Access to Hobbits X Glen and Fairway Hills 5 days a week Access to HOL X X X healing environments Columbia Association Pricing Study 11
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