By Anthony Abou-Zeid Managing Partner as originally featured in WARC
Joining a gym is undoubtedly a high-consideration purchase. Whether we attend is another matter altogether, but few people sign up to a new gym on a whim, or without considering the facilities and pricing of the various options in their area.
David Lloyd Clubs (DLC) is a business that is now more than 40 years old but, when finding itself in a sector that has for a long time been facing a race to the bottom, chose instead to race to the top. Over a seven-year period, DLC has consciously chosen to ‘premiumise’ the brand while value was stripped out of the market by newer, low-cost entrants, and continued to do so even with consumers facing constricted discretionary spending. It was only with a relentless attention to data, a commitment to an ever-evolving brand-response model and a deep belief in the power of emotional brand building that ensured DLC not only survived but thrived.
In 2018, DLC embarked on a journey of profitable, sustainable, growth, at first through driving efficient member acquisition, then by increasing revenue through higher pricing tiers. Throughout this period, they faced increasing competition from low-cost gyms and boutique studios, and the pandemic meant they had to regain members after lockdown whilst protecting higher pricing in the face of a cost-of-living crisis.
The decision to push the brand further into the premium space meant significant capital expenditure in club renovations to provide innovative class experiences and spa facilities. This required growth in both member volume and value to maximise future profits.
At The Kite Factory, our brief was to drive enquiries, understanding – that David Lloyd was more of a club than a gym, and consideration – that membership is worth the higher price.
We adopted a brand-response model – one that integrated performance marketing with long-term brand-building – that enabled DLC to premiumise in a price-sensitive environment, while balancing customer acquisition with sustainable pricing strategies.
Defining the brand-response model
A brand-response model merges performance marketing with brand investment, ensuring that marketing efforts generate immediate conversions, while reinforcing a long-term premium positioning. This approach enabled the business to shift from price-driven competition to value-led differentiation.
In this instance, there were three core building blocks of DLC’s brand-response model. The first centred around data-driven decision-making, namely establishing linear attribution, econometric modelling, and share-of-voice analysis to optimise media spend.
The second lay in understanding audience and market dynamics – tailoring their marketing efforts based on club capacity, demand fluctuations, and regional competition.
Finally, they integrated the media and creative strategy, aligning performance-led acquisition with emotional brand storytelling.
Best practices for execution
To ensure effective execution, the responsibility for customer acquisition fell to a single team to ensure alignment between performance and brand goals, while we made the case for brand investment and internal buy-in by clearly demonstrating the link between improved brand consideration and higher conversion rates.
We took a balanced creative approach, supporting emotional brand-building campaigns with performance-focused activations such as response-driven TV ads with compelling membership offers.
It was also key to keep an ear to the ground, both through a test-and-learn mindset that helped optimise marketing effectiveness, and by tapping into cultural trends to reframe premium offerings so that they aligned with consumer sentiment to enhance perceived value.
DLC’s strategic execution saw them reframe brand perception, positioning the business as a lifestyle club rather than a gym, highlighting wellness, community, and premium experiences.
Over seven years, media spend evolved from direct-response efficiency to full-scale brand-building, with a post-pandemic repositioning leveraging the cultural shift towards wellbeing and reconnection to reinforce its premium credentials.
In a period of economic uncertainty, strong brand equity was essential to sustain demand, and by positioning beyond price, we were able to create a compelling brand proposition that resonated emotionally with consumers.
And the results say it all.
Membership grew 19% in the UK over seven years, with high-tier – or premium – membership uptake increasing from 10% to a staggering 61%. DLC’s market share of revenue grew from 20% to 31% as mid-market competitors declined, and while the industry’s average monthly fee increased by just 4.5%, DLC raised fees by 28% without deterring demand.
David Lloyd Clubs’ success underscores the power of a brand-response strategy in defending and growing premium positioning within a competitive marketplace. By integrating data-driven performance marketing with long-term brand-building, this example proves businesses can drive both volume and value to secure sustainable growth in price-sensitive sectors.
Unpack the full story in our IPA Effectiveness award winning paper here