At a time when discretionary income is tight, the population most likely to view a fitness membership as a necessary expense is older adults.
Are you as confused as I am? One day the news headlines scream, "U.S. recession to be deeper, recovery weaker"; the next day, "New economic forecast says U.S. will not slip into recession." Talk about mixed messages.
As I see it, you can ignore the positive, because it just means business as usual. However, you certainly want to be prepared to deal with the negative, which is a greater downturn in the economy. So, what can you do to make a time of uncertainty work to your advantage?
Let's look at what a recession actually is. According to the online encyclopedia Wikipedia, "A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales." Simply said, people spend less money, but they still spend. The things that get cut from their budgets are the extras - the items that are not a must in their lives. For example, we must eat, but we will eat more meals at home instead of going out. Maybe we will buy one pair of jeans, instead of two. And maybe we will drop our fitness center membership because we can exercise at home or in the park free.
The key to fighting uncertain times, then, is to ensure that your products or services are viewed as essential. For this reason, the older adult market may be the secret to your success in tight economic times.
The key marketWe all know the financial data: The older adult market has more than 50 percent of the discretionary income, accounts for 50 percent of all purchases and has 75 to 80 percent of the dollars in U.S. saving accounts. Adults ages 65-plus also have been through tight times, and know there will be better times ahead. They are financially wise, and spend their money mostly on essentials. And, with this group, health is an essential.
Almost nine in 10 people over age 65 have at least one chronic condition, and managing this condition could save them considerable amounts of money. According to research from Health Partners, based in Minnesota, an adult who is 50 years or older can save $2,100 on their yearly medical costs by walking 90 minutes per week. If your membership is $500 a year, it offers an older adult an upside of $1,600.
You may wish to partner with groups like SilverSneakers, a program designed specifically for the 65-plus-age adult. Programs such as SilverSneakers bring the market to you, pay you and help you to retain these clients, all while adding to your bottom line. And a just-published University of Washington study involving SilverSneakers showed lower total healthcare costs for those enrolled in this program compared to those in a control group.
In addition, older clients stay longer, especially if you take care of them. Think of how an increase of 10 percent in your retention rate could help you to offset the doom and gloom of today's economy. If you make $1 million this year, that's an additional $100,000.
The bottom line here is that exercise is not an option for many older adults; it is a must. If you are able to tap into this market and meet its needs, your future will look brighter, despite what the headlines say.