One hundred clubs and still counting…
Twelve years ago Nelson Mandela phoned Richard Branson and asked him to save thousands of jobs by taking over the liquidated Health and Racquet Club. Branson agreed and set in motion what was to become one of South Africa’s most loved and instantly recognisable brands. As Virgin Active celebrates the opening of the 100th club in Balfour Park Mall, Gauteng, there is no doubt that Branson’s decision was not only a smart business move, based largely on his legendary ‘gut feel’ but one that would have a far reaching impact on how South Africa embraced a new way of getting fit and healthy.
Over the 12 years, Virgin Active has become an aspirational brand. In a series of surveys done every 18 months, Virgin Active consistently has 96% unaided brand recognition, prompted only by the question “Do you know any health clubs in SA”. The most recent survey shows that familiarity with the brand runs at an equally high 96% and more importantly 98% of respondents would consider joining.
Now firmly entrenched as part of a South African lifestyle, Virgin Active South Africa has come a long way in many respects. With MD Ross Faragher-Thomas at the helm, the task of repositioning the brand and bedding down the business took five years at which point the expansion began in earnest. “Globally we are fortunate to have a portfolio of demographics: developing, emerging, mature and start up, allowing various expansion and improvements in each country. Currently we have a presence in the UK, Spain, Italy, Portugal and recently, Australia. Reaching the 100 club mark is a fantastic milestone but that doesn’t mean we can relax,” he says. “We are always looking at new clubs and more importantly, regularly refurbishing existing clubs. We set aside a significant percentage of our turnover for refurbishment only.”
But it is Virgin Active South Africa that has shown such phenomenal growth. As the 100th club opens there are unique selling points to the brand. Faragher-Thomas says the health club has become the significant ‘third space’ – after work and home – in the lives of city dwellers. It is no longer the exclusive domain of sportsmen, students and body builders. The club now attracts a wider audience and has become a social space and experience – rather than just a place to exercise. A space to escape from the stresses and strains of daily life. It appears to be a winning formula – you just have to ask the 130 000 plus people of diverse backgrounds who access health clubs across the country each day.
“We see the diverse markets in South Africa as an opportunity, not a challenge,” says Faragher-Thomas. “We understand that South Africa is unique and have made it our business to understand our members and what works for them and cater to them. Inevitably there is a standard recipe for certain equipment and facilities but like a good chef we add a personal and unique touch. By way of example, you are unlikely to find an African dance class in Bellville or a live DJ in Sandton. Our clubs are differentiated: there’s Classic, Flagship, Club and Fitness and soon we’ll be opening entry level clubs countrywide. This doesn’t mean low cost, but rather geared around what the consumer is prepared to pay. Underpinning all of this is the strong Virgin brand.”
Another example of a customised approach includes a parcel counter facility where market research shows that the majority of the members use public transport; in Soweto, live DJ’s, a hair braider and 20 internet access points. This micro-attention to each club’s unique target market is a powerful selling point for Virgin Active.
A Classic Club will be opening in Sandton next year and the club has targeted corporates in the area. “We will also have a suite of doctors, tailor-made meals and clothes pressing service. It is a niched market and we have embraced it. We make it our mission to really understand our markets and cater for them. We also note requests and complaints and, if they are realistic, we adapt. When an elderly member at one of our clubs couldn’t manage to get out of the pool using the standard three steps – we adapted the ladder to have six rungs.”
Listening to the consumer is a pro-active process and Virgin Active makes 900 calls a day across the country to clients who have used the club in the last 24 hours. They are asked if they would recommend the business on a scale of 1-10 according to the Net Promoter Score (NPS) system of customer satisfaction. A score of 0-6 is considered a detractor. 7 and 8 are considered passive and 9 and 10 are promoters who are likely to recommend you. The score at present is 70%. Apple scores 74% and Amazon 72%. Virgin Active South Africa is up there with the best of them.
Service scores highly along with stringent health and safety measures. The clubs are all equipped with Oxygen AED (defibrillator) machines, medical stretchers, an evacuation chair and basic life support equipment, standards of health and safety global best practice. “We have saved a number of people’s lives with our defibrillators,” says Faragher-Thomas, “and they have been one of our best investments.
“It is not just about bricks and mortar, architectural design and facilities,” he says. “We hire attitude because the experience at the club is overwhelming shaped by contact with staff and it must be as pleasant as possible. Considering a multi-cultural 150 000 people use the clubs every day, all wanting to de-stress and relax, we need to treat them as individuals. Our staff is pivotal in this sense and we’ve all worked hard to shift attitude from having a job to being in a great career and to encourage entrepreneurial style and attract great talent.” It is not surprising that Virgin Active South Africa was voted the 2nd best company to work in in South Africa in 2011 in the Deloittes Best Company to Work for Survey.
Innovation is top of the agenda at Virgin Active and a good idea is shared globally. Faragher-Thomas sites the ‘Colour me Fit’ project which enables clients to look at the detailed programme and identify, by colour, whether they want to do a cardio, strength or core class. “It’s simple and user friendly,” he says. “There’s a reason why a two year old can use an apple – and why it is such a successful brand.”
No business can operate without a CSI division but at Virgin Active there is no ‘cheque book charity.’ “That’s not sustainable,” says Faragher-Thomas. “After a refurbishment all equipment is donated to the community. But in addition to this we recently embarked on a pilot project at the Lavender Hill Senior School in the Western Cape. This included equipping a full gym for students. A space in which learners can exercise, learn skills and be part of a mentoring programme by qualified sports and life skills coaches. In addition we are linked with the Branson School of Entrepreneurs in South Africa and take great pleasure in nurturing young people to reach their full potential.”
Where to now Virgin Active? What of future growth of the company? “We open around six to 10 clubs annually and are well into the development of the entry level clubs – a new and exciting market for us. We believe in the future of Virgin Active South Africa and while there is still a demand we will continue to supply exactly what the consumer wants and needs,” says Faragher-Thomas.