Les Mills International Relaunch, 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 StatisticsOutput 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 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 Clubs 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 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