Lifetime Fitness 2012 Annual Report Download - page 16

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multiple centers that create certain efficiencies in marketing and branding activities, but we select each site based on
whether that site and trade area can support an individual center.
After we identify a potential site, we develop a business plan for a center on that site. This requires analysis from
certain functional areas of management and approval from the finance committee of our board of directors. We
believe that our disciplined, structured process reduces the potential for developing a site that the market cannot
support.
Design and Construction. Our wholly owned subsidiary, FCA, provides us with construction management,
architecture and design services and millwork fabrication. With approximately 125 employees, FCA is dedicated
solely to the design and construction of each new center and the remodel of existing and acquired centers.
Our architecture division has developed a series of prototypical plans and specifications that can be easily adapted to
each specific site. Project architects along with our construction management teams monitor quality and oversee the
construction progress throughout the development of each new center.
FCA's construction management teams provide 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, 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’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 performs services solely for us, we do not recognize
any revenue or profit related to FCA's operations.
Marketing and Sales
Overview of Marketing. Our in-house marketing and creative design agency is responsible for promoting and
differentiating the Life Time Healthy Way of Life brand so as to attract, connect and engage existing and new
customers to our centers, products and services. Our marketing and creative design initiatives focus on our
comprehensive, healthy 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 ancillary
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. By delivering centralized
marketing and creative design services to our centers and ancillary 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.
Overview of Sales. We have trained, commissioned member engagement advisors (sales team) in each center who
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 professionals. 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.