Les Mills InternationalRelaunch, Retention, Acquisition

The value proposition for the Les Mills system is that clubs owners can increase the profit they make from group fitness within their clubs by using it and three calculators have been created to demonstrate these benefits to each club owner across three different areas

• The Les Mills system has been shown to impact on the likelihood of existing members to recommend a club to prospective members, which is shown by IHRSA and FIA research to be a reason members join a particular club

• The Les Mills system has been shown to impact on the frequency that members attend a club which in turn is demonstrated by IHRSA and FIA research to increase retention

• Experience of clubs using the Les Mills system shows that relaunching programs within a club drives an increase in membership

Acquisition Retention Relaunch

Each calculator takes research from IHRSA and FIA as well as Les Mills’ research and experience to demonstrate the financial benefit of the system

IHRSA Research

FIA Research

Les Mills Research

Les Mills Case Studies

Club’s own metrics e.g.•Membership fee•Retention rate

• Increase in membership

• Increase in revenue

Theoretical Foundation Input Statistics Output Statistics

Research findings from a reputable source…

… in order to calculate the benefits in both number and financial terms to each club

…are combined with the clubs own details…

4

Increased Acquisition Through Les Mills Group Fitness (1) (2)

The acquisition calculator is based on research which shows what people join clubs for and why they choose a particular club

1,000

500

132

16 15

Median Club Size Average Number of NewMembers

Average Number of NewMembers that w ill Participate in

Group Fitness

Number of Group FitnessMembers Who Join Based on

a Recommendation

Proportion that w ould Receivea Positive Recommendation

Source: (1)IHRSA (2) AC Nielsen

In 2006 new members totaled

50% of opening club membership (1)

According to IHRSA 26.4% of new members

join to do group exercise (1)

12% of members rely on a

recommendation to choose their

club (1)

92% of members that do Les Mills programs would

recommend them (2)

The retention benefit calculator is based on research that shows increasing weekly attendance by members increases retention by 3%

Average Weekly Attendance Rate per Member Impact on Median Sized club

2.9

0.9

Les Mills US Clubs Other US Clubs

30Clubs with the Les Mills system have a

significantly higher average weekly attendance

rate and can expect a higher retention rate

Given the difference in average weekly

attendance rate, an average club could expect

an increase in average weekly attendance of 1

additional attendance per week per member, which

equates to 3% improvement in retention

or 30 members in a median sized club

Note: (1) Source: IHRSA, FIA, AC Nielsen, Aclaro Analysis

Case study analysis shows that there is a relationship between spend on a relaunch and the acquisition of additional members which the relaunch benefit calculator measures

Relationship Between Relaunch and Additional Members Acquired

20

200 Relaunch Event Spend

Additional Members

Minimum spend

Expected minimum additional members per event

Expected average additional members gained per event

given spend

Upper and lower limits of the range of expected additional

members per event