HOW DOES YOUR FITNESS FACILITY USE TECHNOLOGY? Survey Report, June 2017

Foreign Countries: 23

U. S. States: 33

For-Profit: 72%Not-for-Profit: 28%

Decision-makers: 96%

Responses: 1,594 clubs

Copyright Fitness Industry Technology Council/ & MSS Network

Table of Contents2. Category/size facility operated3. Type facility operated

4. Wearable tracking device useMobile app use

5. Texting useSocial media use

6. Email useWebsite use

7. Can consumers buy memberships online?

8. Can members buy programs online?Can members buy training online?Can members buy specialty classes online?

9. Can members schedule programs participations online?Can members schedule trainings online?Can members schedule specialty classes participations online?

10. What technologies does your club and/or your staff use?

11. What percent of marketing budget is your “digital spend”?

12. Does digital marketing provide customer insights?13. Do you understand use of social media to market your club?

14. Do you use equipment-based or sensor-technologies systems?

15. Do technologies used “track” participations?16. What payment options are available?17. Is club/member management system Cloud-based?18. Does your organization use technologies is sales, training,

education?19. Who manages technology in your organization?20. Have you identified a reliable source for data analysis?21. Do you have enough technology information to make good

decisions about technology use?22. What consequences if you do NOT embrace technologies?23. How do RESPONDENT facilities use (or not use) technologies?

29. Net Scores & Best/Worst 31. Noteworthy

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Introduction & Executive OverviewJuly 7, 2017

Dear Fitness Industry Professional;

With nearly 1,600 fitness facility respondents across 23 countries, and 33 U.S. states this technology adoption survey shares keen insights about the state of technology adoption in fitness facilities today. The report includes some comparisons to a prior research report concluded in 2015. Here are a few of the findings:

• While 66% of Facilities Use Social Media Over 34% Say They Are Unsure How To Use It;• 60% of Respondents Spend Less Than 30% Of Marketing Dollars On Digital Advertising;• Over 50% of Facilities Are Using Cloud Based Club Management Systems;• 63% Of Facilities Report They Do No Have A Reliable Resource To Analyze Their Data;• Only 3 Out Of 10 Respondents Think They Have Enough Information To Make Informed Technology Decisions; and• 42% Of Respondents Show Little To No Concern About Falling Behind To More Technologically Savvy Competitors.

The mission of the fitness industry technology council is to educate the industry regarding technology in order to increase adoption resulting in enhanced user experiences that will help growth the overall fitness industry space. The organization is made up of dozens of leading fitness brands and professionals, many of whom are adopting and creating new solutions for fitness customers and business models.

We thank our supporters for their support in sharing this information with the industry as a whole. On a personal note, this research was compiled in concert with Michael Scott Scudder, a long-time colleague and dear friend who suddenly passed away July 2, 2017. This was his last substantial research work which we collaborated on and concluded in early June just before his death. We wish to thank Michael Scudder for his work and recognize the great contributions he has made to FIT-C and the industry at large. He will be sorely missed by many.

Sincerely,

Bryan K. O’RourkePresident FITC

3

4

What category/size fitness facility do you operate?

NFP less than 5,000 ft2

NFP 5,000-9,999 ft2

NFP 10,000-19,999 ft2

NFP 20,000-34,999 ft2

Not For Profit (NFP) 35,000 ft2+

FP less than 5,000 ft2

FP 5,000-9,999 ft2

FP 10,000-19,999 ft2

FP 20,000-34,999 ft2

For Profit (FP) 35,000 ft2+

0% 8% 15% 23% 30%

29.8%

17.7%

11.6%

16.7%

16.7%

16.7%

4.7%

5.1%

4.7%

5.6%

Responses total more than 100% due to multiple sizes of facilities reported (companies operate more than one size of facility)

5

What type fitness facility do you operate?

Responses total more than 100% due to multiple sizes of facilities reported (companies operate more than one size of facility)

Athletic club (multiple services, child care, and sit-down food & beverage

Fitness + classes and other limited amenitites (child care, no sit-down food & beverage)

Fitness + classes ONLY (no childcare)

Fitness ONLY (no classes, no childcare)

Goup fitness studio

Personal training and/or small group training studio

Other

0% 10% 20% 30% 40%

14.0%

27.4%

21.9%

7.0%

23.7%

34.4%

32.6%

0%

18%

35%

53%

70%

2015 2017

64%

50%42%

30%

Wearable Tracking DevicesMobile Apps

Does your facility or your staff use/integrate with…

6

0%

25%

50%

75%

100%

2015 2017

95%91%

60%73%

Texting Social Media

Does your facility or your staff use?

7

0%

20%

40%

60%

80%

100%

Email

2015 2017

96%94%

0%

20%

40%

60%

80%

100%

Website

2015 2017

95%96%

Does your facility or your staff use?

-1%+2%

8

0%

13%

25%

38%

50%

2015 2017

43%

31%

9

Can consumers buy memberships online?

+39%

2017

201533%

37%

24%

34%

29%

42%

Programs Training Specialty Classes

Can members buy online?

+2%

+45%

+42%

10

2017

201536%

40%

30%

38%

42%

43%

Program Participation 1-2-1 Small Training GroupsSpecialty Class Participation

Can members schedule online?

+11%

+27%+2%

11

TOP 3▪ Email▪ Web sites▪ Social media

MIDDLE 3▪ Mobile apps▪ Club/member management software▪ Texting

BOTTOM 3▪ Diet/nutrition software▪ Customer Engagement software▪ Net Promoter Score software

12

What technologies does your club and/or staff use?

Average percent-of-budget “spend” for all

clubs: 27%

60% of facilities spend less than 30% on digital

marketing

Digital spendWhat % of your advertising/marketing

budget is allocated to digital marketing?

6.5%

24.2%

19.1% 9.8%10.2%

9.8%

20.5%

More than 50%40 - 49%30 -39%20 - 29%10 -19%Less than 10%We don't do any digital marketing

13

14

Digital marketing

Average percent-of-budget “spend” for all clubs: 27%

60% of facilities spend less than 30% on digital marketing

Does it provide you with customer insights (age, sex, income

demographics, interests, etc.)?

6.5%

27.4%

66.1%

YesNoNot sure

2/3 of facilities say their digital marketing provides them with

customer insights

2/3 of facilities think they know how to use social media for

marketing

Social mediaDo you think you understand how to

use social media networks to market your club?

23.7%

10.7%65.6%

YesNoNot sure

15

16

Feedbacksystems

Average percent-of-budget “spend” for all clubs: 27%

60% of facilities spend less than 30% on digital marketing

Do you use equipment-based and/or sensor technologies feedback

systems?

0.9%

56.3%

42.8%

YesNoNot sure

Slightly more than 4 in 10 facilities use some type(s) of

technological feedback systems

2/3 of facilitiessay their technologies track

user’s workouts

Tracking technologyDo the technologies you use track

users’ workouts across equipment, class participations and/or training

sessions?

8.2%

27.8%

63.9%

YesNoNot sure

17

18

Payment systems

Average percent-of-budget “spend” for all clubs: 27%

60% of facilities spend less than 30% on digital marketing

What payment options are available to your members/clients?

EFT thru club/member mgmt software provider

EFT in other ways

In club i.e. cash, check, CCs

Other methods i.e. Paypal, Apple Pay, etc.

Invoice to members

Other

0% 20% 40% 60% 80%

7.0%

24.2%

14.4%

77.7%

14.9%

75.8%3/4 of facilities

use EFT or payment in club

Less than 15% of facilities use

“digital payment” methods

13.5%

30.2% 56.3%

YesNoI'm Not Sure

Slightly more than 1/2 of facilities report that their

club/member management software is Cloud-based

Management softwareIs your club/member management

software system Cloud-based?

19

18

41.9%

58.1%

YesNo

Nearly 6 in 10 facilities use technologies for sales, staff

training and education

20

TechnologyDoes your organization use technologies

to assist in sales, staff training and education, and understanding of programs

and club benefits?

Who manages technology in your organization?

We have an IT manager on staff

We use an "outside service" for IT managemetn

Our club owner

Our club manager

Our club sales/marketing manager

We don't have a "technology manager"

We have another solution for technology management

0% 8% 15% 23% 30%

5.12%

13.49%

5.12%

11.63%

19.53%

18.14%

26.98%

Only 45% of facilities employ professional management for their technologies 21

63.3%

36.7%

YesNo

Slightly more than 1/3 of facilities think they have

“reliable sources” for data analysis

Have you identified a reliable, trustworthy source for analysis of the data accumulated

by your technology systems?

22

Data analysis

3.3%

36.3%

30.2%

30.2%

YesNoNot sureTechnology NOT significant in our business

Only 3 in 10 facilities think

they have enough information to

make good decisions about technology use

Do you think you have enough information/education about technologies development to

make good decisions on technology use in your business?

Technology development

23

15.8%

26.1%

33.0%

25.1%Greatly ConcernedSomewhat ConcernedA Little ConcernedNot Concerned

42% of facilities show little or no concern about

technological competition

Are you concerned that your business may fall behind competitors if you DO NOT embrace technologies at a greater level than at present?

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Technology use

How do all respondent facilities use (or not use) technologies?

Pre-tax Profit Average Use equipment or sensor tech Enough info for tech use

25%30%

37%

58%56%

43%

66%66%

27%

0%

25

How do respondent facilities by category use (or not use) technologies?

Pre-tax Profit Average

Digital marketing provides

customer insights

Use equipment or sensor tech

Use tech for sales, staff training,

education, club benefits

Enough info for tech use

32%31%34%

56%49%49%

66%64%

20%

3%

24%32%

38%

60%59%

42%

66%68%

29%

8%

For-Profits Not-For-Profits

Pre-tax Profit Average

Digital marketing provides

customer insights

Use equipment or sensor tech

Use tech for sales, staff training,

education, club benefits

Enough info for tech use

40%49%54%

69%

51%51%

74%74%

28%

0%

23%27%34%

56%58%

41%

64%66%

27%

8%

U.S. Clubs Non U.S. Clubs

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How do respondent facilities by category use (or not use) technologies?

Pre-tax Profit Average

Digital marketing provides

customer insights

Use equipment or sensor tech

Use tech for sales, staff training,

education, club benefits

Enough info for tech use

23%44%37%49%63%53%63%72%28%9% 26%21%29%60%45%55%55%64%27%9% 19%22%31%72%38%41%59%84%26%9% 28%33%35%74%58%42%63%67%28%7% 29%32%36%60%54%47%70%66%26%8%

35K+ Clubs 20,000- 34,999 sq ft Clubs 10,000-19,999 sq ft Clubs 5,000-9,999 sq ft ClubsLess than 5K sq ft Clubs

Pre-tax Profit Average

Digital Marketing "Spend" %

Digital marketing provides

customer insights

Understand Social Media

Marketing

Use equipment or sensor tech

Club/member mgmt software is cloud-based

Use tech for sales, staff training,

education, club benefits

Reliable data analysis source

Enough info for tech use

Greatly concerned if do NOT

embrace technologies

21%34%39%53%71%53%74%71%33%12% 47%13%40%80%33%40%33%60%23%12% 36%30%38%62%46%54%54%70%29%6% 20%28%26%57%54%42%65%64%24%5% 29%35%44%69%61%44%71%72%29%8%

Athletic Clubs Fitness + Classes (FCL) Clubs, addtl svcs Fitness + Classes (FCN) Clubs, no svcs Fitness ONLY ClubsStudios/Boutiques

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How do all respondent facilities use (or not use) technologies?

Can peple buy online?

Wearables used?

Texting used?

Email used?

Websites used?

Net Promoter Score

Member mgmt software used?

63%

25%20%

53%

95%

38%

96%95%

59%64%

42%

62%67%

28

How do respondent facilities by category use (or not use) technologies?

Can peple buy online?

Wearables used?

Texting used?

Email used?

Websites used?

Net Promoter Score

Member mgmt software used?

56%22%22%37%88%29%97%93%51%62%39%58%69% 67%27%22%50%98%40%96%95%64%65%45%62%66%

For-Profits Not-For-Profits

Can peple buy online?

Wearables used?

Texting used?

Email used?

Websites used?

Net Promoter Score

Member mgmt software used?

57%11%31%57%94%23%94%100%66%71%54%71%60% 64%27%19%45%96%40%96%94%59%64%41%59%67%

U.S. Clubs Non U.S. Clubs

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How do respondent facilities by category use (or not use) technologies?

Can peple buy online?

Wearables used?

Texting used?

Email used?

Websites used?

Net Promoter Score

Member mgmt software used?

42%21%7%37%93%30%88%95%49%67%57%65%63% 76%19%17%45%98%36%100%95%62%64%40%62%57% 45%21%0%37%100%47%89%92%55%76%50%59%66% 60%28%28%56%95%40%95%100%63%63%28%63%74% 74%24%33%54%97%43%97%94%59%73%50%68%74%

35K+ Clubs 20,000- 34,999 sq ft Clubs 10,000-19,999 sq ft Clubs 5,000-9,999 sq ft Clubs Less than 5K sq ft Clubs

Can peple buy online?

Wearables used?

Texting used?

Email used?

Websites used?

Net Promoter Score

Member mgmt software used?

76%19%17%45%98%36%100%95%62%64%40%62%57% 60%20%20%47%100%27%100%100%60%60%27%67%67% 66%18%14%48%96%26%96%96%64%60%52%58%66% 60%21%25%51%94%35%96%95%58%63%40%58%69% 71%31%38%54%99%50%97%94%67%78%49%71%72%

Athletic Clubs FCL Clubs, addtl svcs FCN Clubs, no svcs Fitness ONLY Clubs Studios/Boutiques

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0%

+1 point for result above the average +2 points for best in category -1 point for result below the average -2 points for worst in category

Net Scores & Best/WorstHIGHEST

▪ TYPE: Athletic Clubs with large footprints use technologies most fully and rank highest (+26) with no “Worsts.”

▪ SIZE: 35,000ft2+ clubs rank highest (+11) with no “Worsts.”

▪ FOR-PROFITS (+10) outrank NOT-FOR-PROFITS (-12) with no “Worsts.”

▪ INTERNATIONAL clubs (+12) outrank U.S. clubs (-5).

LOWEST

▪ TYPE: Clubs that offer Fitness + Classes with limited additional services (child care, juice bar, etc.) rank lowest (-18) with 2 “Worsts.”

▪ SIZE: 10,000-19,999ft2 clubs rank lowest (-13) with 5 “Worsts.”

MOST PROFITABLE

▪ Studios/Boutiques (12% average pre-tax profits), which use technologies considerably more than traditional membership clubs.

▪ Fitness-only clubs (12%), though they score worst in 6 technology-use categories.

31

NET SCOREFor-Profits 10Not-For-Profits -12 4 Worsts

All U.S. Clubs -5All Non-U.S. Clubs 12 6 Bests 2 Worsts

35K+ Clubs 11 1 Bests20,000- 34,999 sq ft Clubs 8 2 Bests 1 Worsts10,000-19,999 sq ft Clubs -13 2 Bests 5 Worsts5,000-9,999 sq ft Clubs -1 3 Bests 1 WorstsLess than 5K sq ft Clubs -7 1 Bests 4 Worsts

Athletic Clubs 26 6 BestsFitness + Classes (FCL) Clubs, addtl svcs -18 2 WorstsFitness + Classes (FCN) Clubs, no svcs 0 2 WorstsFitness ONLY Clubs -5 5 Bests 6 WorstsStudios/Boutiques 8 5 Bests 1 Worsts

Noteworthy

DIGITAL MARKETING SPEND. ▪ Average digital-marketing spend as a percent of marketing budget is 27%.

▪ Lowest is Not-for-Profits at 20%; highest is Studio/Boutiques at 33%.

CUSTOMER INSIGHTS.▪ General agreement among 2 out 3 clubs in all categories that technology use is providing customer insights.

SOCIAL MEDIA MARKETING.▪ Most feel they understand social media marketing, though there is a fairly wide range of usage.

EQUIPMENT/SENSOR TECHNOLOGY USE.▪ Equipment-feedback and/or sensor technologies are used by only abut 4 in 10 clubs.

CLOUD-BASED CLUB/MEMBER MANAGEMENT SOFTWARE. ▪ On average, more than half of clubs use Cloud-based software for management of members.

▪ Studios/Boutiques far outpace all other types of facilities in this category; Fitness-Only clubs lag way behind.

USING TECHNOLOGIES FOR SALES, STAFF TRAINING AND EDUCATION.▪ As evidenced by nearly 60% of facilities using tech for training and education of staff, this is a category that will likely see increases in the

future.32

RELIABLE DATA ANALYSIS SOURCE.▪ One of the two categories where use percentages were lowest.

▪ Responses indicate that there is a huge across-the-industry need for professional data analysis to help drive business decisions and strategies.

INFO FOR TECHNOLOGY DECISIONS.▪ The lowest-percentage of users category. Indications are that an industry-wide effort to educate facilities on various types of technologies is

past due.

NON-TECHNOLOGY USE CONCERN LEVELS.▪ The widest range-variance category.

▪ Overall concern that is clubs don’t use technologies they may fall prey to competitors is evidenced in only 25% of clubs.

▪ But the least technological concerns are shown in the club categories that have the lowest Net Scores.

▪ International clubs, which score substantially higher on overall technologies uses, also exhibit far greater technological concerns than do U.S. clubs.

CAN PEOPLE BUY ONLINE?▪ In general, 2 of 3 clubs have provided technologies for consumers to be able to purchase online.

▪ Larger-footprint clubs lead the way in this category; laggards are 5,000-9,999ft2 clubs and Studios/Boutiques.33

Noteworthy

CAN PEOPLE SCHEDULE ONLINE?▪ Generally, more than 60% of clubs enable online scheduling.

▪ Athletic Clubs and International clubs lead the way.

▪ Not-for-Profits and Fitness + Classes clubs bring up the rear in this category.

TECHNOLOGIES USED, HIGH MARKS:▪ Email (96%), Social Media (95%), and Web sites are by far the most-used club technologies for contacting members and marketing to

members/prospects.

▪ In the second tier of technology use are Mobile Apps (64%), Club/Member Management software (63%), Texting (59%), and Customer Relationship/Customer Engagement management softwares (53%).

▪ Use of Mobile Apps and CRM/CEM show the most significant gains, compared to 2015 data. Use of Texting shows the greatest decline in use when compared to two years ago.

TECHNOLOGIES USED, LOW MARKS:▪ Integration with Wearables (42%), use of Blogs to communicate (38%), Nutrition/Weight Management software use (25%), and use of

member-feedback Net Promoter Score software systems ran lowest.

▪ Wearables integration is up from the 2015 survey, but still not at the level anticipated.

▪ Of note is the extremely low or even non-existent use of Net Promoter Score software systems in clubs under 20,000ft2.

34

Noteworthy

(JUNE 2017)

All data collected, analyzed and reported by: Michael Scott Scudder & Bryan K. O’Rourke