12 July 2022,  by Till Pitschel

How do demographics affect customer loyalty?

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The status of fitness within society has developed very positively in recent years. The increased status has also changed the target group, which is now more than five years older on average than it was 15 years ago  (DSSV, 2007). The evolved perception of fitness, greater professionalization of the industry, and an aging target group raise the question of changes in member user behavior. This article will shed light on the opportunities for the fitness industry and which target group pays attention to which parameters in their care.  

 

The population is getting older

It is no secret that the German population is getting older. For years, there has been talk of the "population onion". In concrete terms, this means that every second citizen in Germany is now older than 45 and every fifth person is older than 66 (Federal Statistical Office, 2020). But not only that, life expectancy is also rising. In addition, the number of deaths exceeded the number of new births by 250,000 in 2020. So not only are we getting older, we're also getting fewer. The average age of fit people in Germany is currently still 40.5 years (DSSV, 2022). This figure is bound to rise in the coming years as the population continues to age. How old the average member will be in ten years, however, can only be speculated. 

 

Industry positions itself in the health sector

Fitness is now much more than heavy iron. Above all, fitness means health. The German fitness industry has recognized that the target group for fitness is changing. And with it, the needs of those exercising are changing. Currently, 44.2 percent of German studios have positioned themselves with a focus on health, and the trend is rising. This trend is no coincidence. After all, 51 percent of all sick days in Germany are due to causes that could have been prevented through exercise and a healthy diet (TK, 2020). The industry has also recognized this and reacted to meet these needs. At first glance, for example, the number of further training measures for employees is absolutely optimistic: according to the key data report, 68.3 percent of facilities invested in further training with regard to equipment-based strength training, 47.6 percent with a focus on equipment-based cardio training (DSSV, 2022). Unfortunately, the report does not indicate whether these further training measures will be applied in practice and how many facilities will invest in age-appropriate support or provide barrier-free access to studios. Only time will tell.

 

Changing user behavior

It is not only the training needs of the aging population that are changing. There are also big differences in user behavior between age groups. For example, a report from IHRSA (2016) shows that people's propensity to churn decreases as they age, while average membership duration increases in parallel. We observe that people older than 35 tend to stay members longer and change studios less often. However, we also see that it is precisely the young, less sedentary segment of the population and the target group of lifestyle studios that likes to change providers frequently.

 

With regard to studios positioned in the health sector, the aging population offers a great opportunity. Health studios appeal to the target group with the highest loyalty potential; it is only a matter of exploiting this and ensuring lower churn within the industry in the long term. Andreas M. Bechler explains in great detail why an average customer turnover of 28.6 percent (DSSV, 2022) is too high in his article „Why the fitness industry lies to itself with the belief of a low turnover rate“. 

Critics like to claim that data-based customer engagement is "useless unless the fundamentals are executed satisfactorily." However, these basics differ immensely between audiences. While some basic factors such as cleanliness, usability of equipment and opening hours have the same value congruent with the target groups, the interpersonal component ranks much higher with the older population than with generations Y and Z. For example, 83 percent of people over the age of 55 prefer direct contact with a human being or telephone advice when they need help (Businesswire.com, 2014). Among the "best agers" (generation 60+), more than 80 percent of respondents consider a personal relationship of trust important in business relationships (YouGov, 2013), digital processes and online communities play a subordinate role here. 

 

Implementation

If you position yourself as a provider in the healthcare sector, it is immensely important to be able to personally present your customers' needs for expert advice. Workout apps, digital course concepts or comprehensive FAQs on the company website are just as little help here as promotions via Instagram and the like. So, in the course of customer loyalty and long-term business success, it is important to train staff well and also take into account the soft factors that play into the advice given to members. As an entrepreneur, it's perfectly normal to set certain budgets at the beginning of the year. After all, budget planning makes sense. If operators learn about grievances in exchanges with their members or there is a strong desire from the target group regarding a service, it can be quickly decided to what extent these are to be implemented. Employee training, investments related to the infrastructure of the studio or the planning of an event for customer loyalty can thus take place much more concretely and quickly.

 

Conclusion of the author Till Pitschel

"The fitness industry has the best prerequisites to become Germany's most successful industry in the long term. If we manage to draw the right conclusions from the changes, we will be able to continue to grow as we did for years before the Corona pandemic. The focus of politics and society is shifting in our favor, the target group addressed by health is very loyal if properly cared for, and our employees are becoming increasingly qualified. As a fitness industry, we have all the assets at our fingertips and just need to play them wisely to realize this potential for success."

 

About the author

Till Pitschel is an expert in fluctuation management and customer loyalty processes, author, speaker and personal trainer. Together with two partners, he runs the startup "Keep Your Members" to provide comprehensive advice to studio managers on attrition processes and customer retention strategies. For more information, visit www.kym-solutions.de