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Boost Gym Revenue & Retention with Corporate Sponsorships

Working with corporate partners offers a range of benefits for operators, sponsors, and members.

According to IHRSA’s20 Million by 2030 report, corporate wellness offers a great target for club operators seeking to push revenues and member retention. When you consider that 56% of health insurance coverage in the U.S. is employer-based, the target makes great sense. Currently, approximately 70% of companies have some form of a wellness program, while 90% to 95% of large corporations offer programs that look at employee well-being.

The report notes the significant cost savings delivered by such corporate investment: studies show that wellness programs have a return on investment of $1.50 to $3 per dollar spent over a two- to nine-year timeframe. Healthy employees, healthy bottom line.

And, as the IHRSA report notes, clubs are a natural corporate wellness partner, providing corporate clients a variety of solutions to employers seeking to improve the well-being of their employees.

Taking a Different Approach to Corporate Sponsorships

Life Time, based in Chanhassen, MN, operates 155 clubs across the U.S. and Canada. The company currently has more than 1,700 active partnerships, encompassing nearly 50,000 members.

“The key differentiator between Life Time’s corporate partnership program and what most of us have experienced in terms of corporate programs at other clubs is that we don’t simply offer large group discounts,” notes Ryan Chapman, senior director, corporate partnerships at Life Time Inc. “We only partner with organizations that are willing to invest with us. Our model is not ‘the number of employees you have equals a 15% discount.”

Life Time’s agreement structure is fairly simple: it partners with companies that specifically contribute toward employees’ monthly dues and matches that contribution. Based on that approach, employees may perceive their memberships as being heavily discounted, but it’s actually the partner and Life Time matching subsidies on a full-price membership.

“We avoid doing any discounting and we also base the agreements on a usage model,” he says, “meaning your organization customizes the number of visits that are going to be required based on what your overall wellness objectives are.

“I’ll give you a couple of examples,” Chapman continues. “If you’re a small law firm and you’re just trying to recruit the best young talent coming out of law school, then maybe you’re fully subsidizing memberships. On the other end of that spectrum, if you’re Samsung Electronics America, you’re going to require eight or 10 visits a month in order to get the subsidy because statistically, that’s where your employees are actually getting healthier and costing less to insure. So, depending on the number of visits each employee logs, they either get their subsidies or they don’t. They have skin in the game.”

Member retention Life Time woman yoga mat Limited Use column

Chapman adds that Life Time corporate partnerships are completely customizable. For example, some partners spur usage by offering higher subsidies for each employee visit. The programs can also be split into tiers in which executives’ memberships are fully subsidized and the general employee tier might offer a percentage discount. In addition, every member joining through a corporate-sponsored membership gets Life Time’s best enrollment offer, meaning they don’t pay anything to join, get free onboarding, and a $100 Life Time Bucks credit to spend in the club.

“That helps remove a hurdle for all those folks in the deconditioned or sedentary populations that have never joined a health club,” says Chapman. “We make it simple for them to try it for the first time.”

An Array of Benefits

Among the positives of corporate programs are the benefits for both employers and employees. Employees are actively encouraged to live healthier lives, which then equates to lower absenteeism, greater productivity, and lower medical bills. In fact, according to a proprietary study by Medica Insurance Group, employees who go to Life Time eight-plus days a month, save an average of 33.6% on their medical bills.

There also have been several benefits for Life Time. For example, while there tend to be seasonal spikes in member acquisition on the B2B side—e.g., corporate planning often takes place in the third quarter, so higher acquisition is typical during that time—corporate partnerships drive 5% to 5.5% of its new business on average. On the retention side, corporate members generally stay about nine months longer than a typical member on average and are approximately three percentage points better on overall attrition.

“In addition to those advantages, the corporate partnerships give us access to people who may not otherwise be Life Time members,” says Chapman. “Our average dues are about $119 a month and we know that not everyone can afford that. Marco Foods, for example, is a partner that has a lot of blue-collar workers who typically wouldn’t join. So, the agreements help us bring in different types of members, while protecting the brand and maintaining our high-end, luxury resort feel.”

If you do decide to undertake a corporate partnership program, don’t base it on discounts, he advises.

Discounting is ultimately sort of a ‘race to the bottom,’” he says. “When you start offering discounts, what companies realize right away is that the partnership is a great way to put your logo on a poster in the breakroom or internal website. But nobody who’s costing you a lot from a healthcare standpoint—none of your sedentary population, folks who are overweight or obese—are going to activate on a fitness program because they get 15% off.”

Corporate Program Resources

Exerp, a best-of-breed club management solution, has invested heavily in helping operators partner with local businesses to incentivize their employees to come to the club.

“Exerp helps address common challenges with operationalizing corporate partnerships,” notes Karl Koutroupas, VP of strategy and customer insights at Exerp. “These include catering to the unique health and wellness goals of each business; managing and governing corporate discounts; coordinating corporate billing with member billing; scaling to hundreds of corporate agreements; maintaining accurate active corporate member counts for invoicing; and retaining sponsored members when those members change employers.”

Member retention Exerp Menu column

Here’s how Exerp addresses those issues:

  • Corporate sponsorships and discounts. Easily customize each corporate agreement—how much and what type of health club spend a business sponsors, what discounts an employee enjoys, and benefit tiers based on employee type, role, etc.
  • Corporate packages. Sell large-quantity session packages to companies (e.g., 1,000 PT sessions) and allow them to define how the clips are to be distributed among its employees, for example, giving every employee up to two PT sessions per year.
  • Corporate billing. Automated corporate invoicing can be done on any recurring cadence agreed between the operator and the company. Furthermore, corporate billing is tightly linked with member billing to ensure the member and company are both paying their fair share.
  • Simplified product catalog. In Exerp, operators don’t need to create duplicate memberships and products to enable corporate agreements. For example, an operator doesn’t need to create separate memberships for Company A, separate memberships for Company B, etc. Instead, operators simply offer their normal set of memberships and the corporate agreements on each member’s account will automatically adjust the membership’s price and billing.
  • Member saves. Exerp offers automation capabilities to convert sponsored members to either new corporate agreements or regular, unsponsored pricing when a member changes employer. That way the member’s subscription is uninterrupted and operators are a step ahead for retention.
  • Eligibility verification. Configure validation fields and workflows to ensure each corporate member always pays the right amount for products and services.

To learn more about the Exerp system can help you manage a successful corporate partner program, contact info@exerp.com or visit their website.

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Jon Feld

Jon Feld is a contributor to IHRSA.org.