Lifetime Fitness 2011 Annual Report Download - page 17

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Our construction division provides construction management teams, including on-site supervision, for each new site
and remodel, as well as administrative services, such as permitting, purchasing, project accounting and safety
administration. The construction management teams qualify subcontractors, bid each component of our projects to
ensure cost-effective pricing, and monitor cost progress for the duration of the project. By using similar materials at
each center, we not only maintain a consistent look and feel, but we are also able to maximize buying power and
leverage economies of scale in purchasing.
Through FCA Construction, we are able to maximize flexibility in the design process, retain control over the cost
and timing of the construction process and realize potential cost savings on each project. Nearly all of FCA
Construction’s costs are capitalized as a part of the overall initial investment in the new center or the remodel. Any
remaining unallocated costs are recognized as an expense in the period incurred. Because FCA Construction
performs services solely for us, we do not recognize any revenue or profit related to FCA Construction's operations.
Marketing and Sales
Overview of Marketing. Our in-house centralized marketing and creative design agency is responsible for promoting
and differentiating the Life Time Healthy Way of Life brand so as to connect and engage existing and new customers
to our centers, products and services. Our marketing and creative design initiatives focus on our comprehensive,
lifestyle-oriented approach of helping people set and achieve their health and fitness goals by participating in
activities that interest them - and helping them to identify new areas of passion - both inside and outside of our
healthy way of life destinations. In turn, these efforts further engage existing members in our corporate business
areas and generate new consumer leads for our membership sales force. Our in-house marketing and creative design
agency integrates four key areas, including member acquisition and retention, media planning and analysis, creative
development and production, and web, digital and social development that personalizes the Life Time brand for each
member and prospective member. By delivering centralized marketing and creative design services to our centers
and corporate businesses, we bring proven, experienced and innovative strategic planning, creative design, member
experience and production to our existing and new markets in an efficient and effective manner. New membership,
loyalty and corporate business results are tracked to gauge the effectiveness of marketing initiatives, which are
adjusted, as necessary, to address changing center and corporate business needs.
Overview of Sales. We have motivated, trained and certified, commissioned member engagement advisors (sales
team) in each center that are responsible for member acquisition and retention. Our member engagement advisors
are responsible for prospecting potential members, setting up personalized visits and tours of our centers, and
highlighting relevant programs, services and amenities that align with expressed member interests and goals. The
member engagement advisors inspire action on the part of prospective members to get started on their healthy way
of life and ensure they are connected to our programs and our certified experts. The member engagement advisors
also serve as a primary relationship manager for new members through consistent engagement and timely follow up.
During the pre-opening and grand opening phases described below, we have up to 12 member engagement managers
on staff at a center. As the center matures, we reduce the number of member engagement advisors on staff to
between six and eight.
Pre-Opening Phase. We generally begin selling memberships up to five months prior to a center's scheduled
opening. We market to prospective members during this period primarily through a portfolio of broad-reach and
targeted consumer and business-to-business media as well as referral promotions. To further attract new members
during this period, we occasionally offer lower pre-opening joining fees.
Grand Opening Phase. We deploy a marketing program during the first month of a center's operation that builds on
our pre-opening efforts. The advertising campaign culminates with households in a strategically designated trade
area - based on local access considerations, housing density and travel patterns - receiving targeted advertising.
Simultaneously, prospective members receive special invitations to grand opening activities and educational
seminars designed to assist them in their orientation to the center.
Membership Growth Phase. After the grand opening phase, marketing activities and costs should decrease as drive-
by visibility and word-of-mouth marketing become more influential. The goal of each center is to achieve consistent
membership growth until targeted capacity is reached. Once the center has reached its targeted capacity, marketing