Social Good Report

“Physical activity sector must unleash its social purpose to thrive” says report

Health and fitness clubs need to look to social purpose led brands such as Innocent, TOMS and Apple to thrive in the future according to a new report for the physical activity sector. Against a backdrop of increasing competition from local authority run leisure facilities and the rise of the low-cost gyms, the “Fitness Sector Social Good Report”, authored by sector expert Ray Algar, supported by national not-for-profit health and physical activity body ukactive, details the critical impact of social responsibility on the growth, value and impact of the private gym sector over the next 15 years.

Accelerating innovation services offered to members and re-focusing pricing options to more readily accommodate changes in lifestyle and circumstance are just some of the recommendations the report references, in a bid to boost the value and sustainability of the sector. However the most significant gains could be made by tapping into the collective influence of a membership base that stands at almost eight million UK consumers for social good, such as charitable donation options alongside monthly direct debits, or providing the framework for members to make small positive changes that benefit society.

David Stalker, CEO, ukactive said, “This report is the impetus the sector needs to think beyond the size of a membership direct debit run. Securing the future growth of our sector is as much about benefiting the health and wellbeing of our customers, as it is about valuing the long term business advantages of being socially responsible. We’re committed to helping our members and partners embrace this agenda over the coming years”

Ray Algar, former chair of Wave Leisure Trust, a social enterprise, and recognised expert on the health and fitness market added, “Organisations that embrace a broader definition of their stakeholders will outperform those who adopt a narrow self-serving,profit-first approach.  Inspiring people to live more active and healthier lives and pursuing this in a responsible, altruistic and compassionate way, creates a powerful halo effect around a business of goodness and success.”

The report suggests that new ways of connecting with their consumer base may be more compelling for gym businesses given recent forecasts for the physical activity sector in the wake explosion of “low cost” gyms threatening the sustainability of some of the more establish brands.

In his foreword, David Stalker laments the perception that gyms are more interested in the size of their bottom line than establishing a meaningful connection with their customers’ but highlights that it is the responsibility of organisations within the sector to tackle this issue. 

The report looks to the history of the gym movement, describing a rise in socially aware young entrepreneurs in the 1980s and early 1990’s keen to get the nation active. It attributes the possible reason for the gradual decline in the public’s perception of gyms to the takeover of these chains by bigger businesses and venture capital funds, which led to a more ruthless focus on the short-term bottom-line typical of the venture capitalists who sought to profit from the sector at this time.

Even that is changing. An example of where a more altruistic approach to investment in the business of physical activity already paying dividends in both the health of the nation and commercial success is The Gym Group.

The Gym Group believes that everybody deserves the right to live a healthier lifestyle without paying a premium price, users are not tied into a long membership contract. Fees are kept low by joining online, and as part of the sign-up process members are given the option to support small local charities by donating any amount they like. Eight out of every 10 members donate, which makes a real difference to small charities unlikely to receive significant government or public support. 

Other examples of major gym chains rising to this challenge include Fitness First which was recently acquired by Oaktree Capital. The new owners and management team at Fitness First have pledged to “Rewrite the Rules of Fitness” which include taking a greater interest in the health and wellbeing of members. 

Health is also the major theme at the heart of the purpose of the not for profit charity Nuffield Health and Wellbeing with a vision to offer joined up health and wellbeing.

The key points, advised by the 120 page report, that gyms need to consider within their growth strategies to change the public’s perception by conveying a social purpose include:

Pursuing authentic and sustainable social values by remaining relevant to stakeholders;

Promoting goodwill, resulting in a clarity of purpose that inspires staff and customers 

Building a reputation that extends beyond their geographic marketplace; 

Being generous and compassionate to customers in their good times and bad;

A relentless pursuit to create a remarkable organisation that understands what makes people tick and move to improve the health of the nation.

Read the full Social Good Report here.