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Healthy Markets
By: Matt Bolch
Issue: 2007may
Before you flex your promotional muscle in health and fitness-related markets, you’d better build up your knowledge of what buyers in these fields are after.
If there’s any doubt about America’s obsession with all things health, just scan the magazine aisle at your local bookstore or flip on the TV and pay attention to the headlines. Baby boomers are aging. American waistlines are expanding, creating a push by health practitioners for more exercise. And the number of people getting cosmetic procedures and spa treatments is on the rise.
To help businesses and organizations targeting senior citizens, fitness buffs and consumers seeking a little nip and tuck, promotional consultants must understand these markets and the clientele within them. Here, Promotional Rx presents an overview of these three markets and the diverse needs within them.
Marketing To Aging Americans
The graying of America is no secret, but you may not realize the huge opportunity awaiting those willing to solicit companies that cater to this fast-growing demographic. Adults ages 50 and up represent 28 percent of the total U.S. population and control more than three-fourths of the nation’s financial wealth, according to the U.S. Census Bureau. By 2015, this group will comprise 45 percent of the population.
The aging of the American population also means more competition among senior living facilities, nursing homes, rehabilitation clinics and other agencies that cater to mature adults. In fact, Linda Heyse-Highland, president of distributor LinJen Promotions, Inc.(UPIC: LINJEN) in Mokena, Illinois, says senior housing and rehabilitation centers are among the four biggest segments of the senior market in general (the others being financial and travel).
Companies in the senior housing market should remember the importance of referrals from physicians, nurses, social workers and others in the healthcare industry, Heyse-Highland says. To entice seniors directly, she suggests tote bags, nightlights, pill cutters, pill containers, stuffed animals (“strangely,” Heyse-Highland says), umbrellas and food items.
“Food is a great item in general, and seniors like anything in a brightly colored package of red, yellow and blue,” Heyse-Highland says. “They like to see [the item] in their purses. And that’s not being sexist because the clientele is mostly women.”
Janice Cassidy, an independent rep for distributor HALO/Lee Wayne Corp. (UPIC: LEEWAYNE), says inexpensive promotional products can go a long way for marketers in the senior housing industry. One of Cassidy’s clients is an agency that assists seniors so they can remain independent in their own homes. While appearing at a community expo aimed at the senior crowd, she has helped her client tempt seniors with a wide array of inexpensive items, including bookmark magnifiers (“Everybody loves those,” Cassidy says), flashlight key chains, pens, calendars, sticky notes, mints, magnets, compressed sponges and letter openers.
The senior expo operates on an annual theme, so Cassidy sits down with her client to brainstorm ideas that fit the theme and appeal to the target demographic. The ability to meet a client face to face should be a strong selling point for marketers. “Somebody at the other end of an 800 number can’t do that,” says Cassidy, who’s based in York, Maine. “Once you establish a relationship and [the client] can see what you can do, it creates loyalty.”
When dealing with companies that cater to the housing and rehab needs of clients, marketers should ask about employee retention and what the client is doing to recognize and reward employee efforts. “It’s hard to keep staff at a lot of these places because they’re not highly paid,” Cassidy says. “The client needs to give some recognition, and one of the best ways to do this is with a gift.”
Shirts, tees, coolers, tote bags, upscale sports bottles and picnic blankets with vinyl on one side are possible ways a company could express appreciation. Penetrating the senior market “is no different from prospecting in any area,” Cassidy says. “Obviously, the best way to succeed is through a personal referral, but flyers and catalogs can work, too.”
Senior Market Snapshot
• By 2015, Americans ages 50 and older will comprise 45 percent of the population.*
• By 2030, Americans ages 65 and older will account for roughly 20 percent of the population.
• Advances in medical care have shifted the leading causes of death from infectious diseases and acute illness to chronic diseases and degenerative illness. Currently, about 80 percent of older Americans are living with at least one chronic condition.
• The U.S. aging population is increasingly diverse, and the health of minorities lags behind that of non-minorities.
• Thirty-nine percent of non-Hispanic white adults aged 65 years or older reported very good or excellent health, compared with 24 percent of non-Hispanic blacks and 29 percent of Hispanics.
• The cost of providing healthcare to an older American is three to five times greater than the cost for someone younger. As a result, by 2030, healthcare spending is projected to increase by 25 percent because of these demographic shifts.
Sources: *U.S. Census Bureau; all other information from The State of Aging and Health in America study by the Centers for Disease Control and Merck Company Foundation
All Fitness Centers Are Not Created Equal
Any city with more than five traffic lights likely has at least one fitness center or community wellness center, which makes the fitness market an attractive one for promotional consultants to enter. More than 41 million Americans belong to a health club, according to statistics from the International Health, Racquet & Sportsclub Association. The industry features more than 29,000 clubs that generate annual revenues of $17.6 billion.
A diverse universe of corporations, hospitals, universities, municipalities and residential communities operate health and fitness centers, and the promotional requirements of each varies widely. The three largest types of clubs, according to IHRSA, are commercial/multipurpose facilities, commercial/fitness-only facilities and those operated by YMCAs and YWCAs. These three segments comprise more than 70 percent of the industry and represent a good starting point for anyone looking to market in this industry.
“You have to know the market of the center first,” says Rebecca Kollmann, MAS, director of marketing at Adventures in Advertising Corporation (UPIC: ADVINADV), a distributor franchise firm based in Neenah, Wisconsin. “Overall, there are so many niches, and just because one fitness center or spa purchased a particular product doesn’t mean others will.”
Prime considerations should include the client’s budget, the target demographics and the strategic goals of the program. Promotional items intended for brand awareness programs will vary from those used in retention and recruitment efforts, she notes.
However, the importance of the ubiquitous sports bottle cannot be overlooked, Kollmann says. They are perfect giveaways at fitness events and family or women’s expos, and, if the recipients don’t use the bottle, there’s a high likelihood it will be passed on to someone else. Another good giveaway item is a carabiner with an attached tube of lip balm or sunscreen.
While sports bottles are obvious promotional products for this market, your offering must grab the client’s attention immediately in order to stand out from other fitness centers—and other marketers. That’s why Michael Lara, CEO of Miami-based Benison International Group (UPIC: Benison), recommends a logoed product in the shape of “pretty much anything you can put your hand around.” Barbells and bulging biceps quickly come to mind, as does any barrel-shaped sporting equipment. Innovations in the plastics molding industry have made shaped products commonplace.
Because serious fitness buffs understand the importance of staying hydrated during workouts, polycarbonate sports bottles have become must-haves for end users in this market. Therefore, promotional consultants should remind clients that higher-quality products tend to be used more often and for longer periods of time. But ordering large quantities of high-quality bottles for giveaways at the local fitness expo or other community event may not be the best use of promotional dollars, since any premium should match its intended purpose.
Pedometers are popular among fitness centers, but the current trend is to offer models that do more than count steps and calories as a sign-up gift. For instance, some pedometers also include a stopwatch function. “There’s a high stickiness factor,” Kollmann says of pedometers. “People can use them outside or as a reminder to come and work out when the weather is bad.”
Fitness towels work best as sign-up gifts because of their relatively high price points, and traditional apparel items work well to give or sell to members to get the fitness center’s name in front of more people.
Especially for family-oriented clubs (such as the 19 percent of fitness centers operated by YMCAs and YWCAs), marketing to children can help keep the client’s name front-and-center in the minds of parents who may or may not belong to the center. Tote bags and drawstring backpacks in vibrant colors appeal to youngsters, as do inexpensive flying discs or fold-up flyers that come in a pouch.
“This is a hugely growing business and will continue to be so,” Kollmann says. Those pegged as frequent health club attendees (100 or more visits a year) hit an all-time high of 17.6 million in 2005. And while general health club memberships have increased 138 percent since 1987, the number of these “core” memberships has gone up 231 percent, according to IHRA.
Fitness Center Market Snapshot
• In 2005, there were eight million health club members over age 55, an increase of more than 314 percent since 1990.
• Since 1990, the number of health club members younger than 18 has increased by 178 percent to 5.1 million members.
• Adults aged 35 to 54 now account for 13.5 million members, or 32.7 percent of the health club population. This segment has increased by 113 percent since 1990.
• Women are a growing majority of all health club members, accounting for 57 percent of the grand total in 2005. The rising female membership percentages may be due to the increase in the number of female-only health club facilities.
• In recent years, maintaining a healthy weight has become priority for almost half of both Millennials (48 percent) and Gen Xers (47 percent) in 2003, up from 34 percent and 38 percent, respectively in 2001.
Source: International Health, Racquet & Sportsclub Association
Spas, Personal Care Centers Crave Upscale Products To Recognize Clients
Those who have money for Lasik surgery, liposuction, laser hair removal and other personal care services are accustomed to being pampered. This fact should be foremost in the minds of promotional consultants who want to crack this lucrative market.
Nearly 14,000 spas in North America generate $9.7 billion in annual revenue, according to the International Spa Association. Medical spas are the fastest-growing segment of the industry, increasing 69 percent annually between 2003 and 2005. Popular medical treatments include chemical peels, microdermabrasion and natural weight loss measures such as body wraps.
Additionally, the medical industry in general, and the plastic surgery sector in particular, are incorporating spa treatments such as naturotherapy and acupuncture into their service structure. As far as plastic surgery goes, nearly 11.5 million cosmetic surgical and nonsurgical procedures were performed in the United States in 2006, according to the American Society for Aesthetic Plastic Surgery. Compared to 2005, cosmetic surgical and nonsurgical procedures increased one percent.
“Somebody who goes to the time, trouble and expense for laser surgery or augmentation is a high-end client in a lot of cases,” says John Gallagher, CAS, owner of Cumming, Georgia-based distributor The Promo Shop Ltd. (UPIC: PROMOBOY). “You should be thanking them in the same way.”
Relaxation items such as spa gifts in decorative wicker baskets and yoga mats make attractive thank-you items. “Yoga mats create added value about how you’re perceived in the community,” Gallagher says. “It brings thoughts of physical improvement and body enhancement that can be powerful lures.”
Gift baskets could include aloe vera gel, moisturizer, sunscreen, soaps and loofahs, Gallagher says. Another thank-you item could be a spa towel gift set with towel, robe and loofah. Lara of Benison International Group recommends facial masks, skin renewal kits, cold compresses and bath gels.
Due diligence should be taken when recommending skin and body care products in this industry, Lara says. “You need to have some credibility in the market to bring products like that in because clients are worried about liability,” he says. “What happens if someone puts on lotion and gets a rash?”
Thoroughly research and select companies that are inspected by the Food and Drug Administration. That way, “you can sleep well at night,” Lara says. Other likely items in this vein would include suntan lotions, hand sanitizers and body oils. (See sidebar, “The Truth About ‘FDA Approved’ Products.”)
Popular products to create brand awareness include scented and colored candles, says Gallagher. “Since these are used at home, they create a good mindset about who gave them the item.” Candles generally are packaged in a glass jar or tin with colors to match a company’s logo and can be valuable at local events to create a community presence. Other giveaways for this market could include a deck of playing cards with health tips and proven items as calendars and umbrellas.
Conducting research beforehand is important to gain traction in any market, but it may be more so in the personal care industry because of the high-end clientele and the carefully crafted marketing messages that many companies want to present. It’s vital to understand client needs before bringing out the promotional products catalog.
High-volume items designed to promote brand awareness will look nothing like gifts for those who have undergone enhancement procedures costing thousands of dollars. The first step is to determine what the client wants to achieve with promotional products, then recommend items to help the client achieve the goal.
Referral business helps drive this industry, too, so companies should think in terms of how to gain additional customers with the same demographics as its current ones. Lara recommends helping the client create a lead-generation program with gifts to current clients providing contact information for friends and associates who also might benefit from the company’s services.
“People are more discerning about what they receive,” says Gallagher. “The (gift) choice should be more of a personal touch between the giver and the receiver. You need to think outside the box for items that are more personal, brought into the home and used there.”
Spa, Personal Care Markets Snapshot
• As of August 2006, there were 13,757 spas in U.S., compared to April 2004, when there were 10,128 spas. This represents an average annual growth of 16 percent.
• The number of spa visits has also increased since 2003, when there were 109 million spa visits. In 2005, there were 131 million spa visits, representing an average annual growth of nine percent.
• In August 2006, there were 267,400 total employees, with 124,500 full-time employees, 101,300 part-time employees and 41,600 contract employees. In April 2004, there were 215,200 total employees, with 111,500 full-time employees, 71,800 part-time employees and 31,900 contract employees. This is an average annual growth of 11 percent for total employees, six percent for full-time employees, 19 percent for part-time employees and 11 percent for contract employees.
• Medical spas are a growing segment of the spa industry. A medical spa is a facility that operates under the full-time, on-site supervision of a licensed healthcare professional. Practitioners working within a medical spa are governed by their appropriate licensing board, if licensure is required.
Source: International Spa Association
The Truth About ‘FDA Approved’ Products
When selling products such as sunscreen, lip balm, hand sanitizers and moisturizers or lotions—which may contain ingredients regulated by the Federal Drug Administration—it’s important to understand some basic terminology so you can accurately market them.
One surefire way to let customers know the products are safe is to call them “FDA-approved.” But this term is a misnomer, and many promotional consultants misuse it. “The FDA does not approve cosmetic or over-the-counter drug products,” says Larry Wilhelm, president of Waconia, Minnesota-based supplier Custom HBC Corporation (UPIC: hbcspec). “They only approve prescription drugs and new drug products.”
Rather, the FDA publishes a series of regulations that cover all aspects of manufacturing, labeling and handling of cosmetics and over-the-counter drugs. Part of these regulations require manufacturing sites making these products to be registered with the FDA, which means they’re subject to periodic audits by the FDA. “So the products aren’t really FDA-approved. They are made in accordance with FDA regulations,” says Wilhelm, adding that FDA representatives show up without notice to audit manufacturing facilities producing these types of products to ensure the site is up to snuff.
Promotional consultants should also understand the differences between the terms “cosmetics” and “over-the-counter (OTC) drugs.” The FDA defines cosmetics as “articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body...for cleansing, beautifying, promoting attractiveness, or altering the appearance.” Examples include skin moisturizers, shampoos and facial makeup.
By contrast, “If a product has any physiological effect on the body, it’s an OTC drug,” Wilhelm says. Specifically, products “intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease…and articles (other than food) intended to affect the structure or any function of the body of man or other animals,” are classified by the FDA as OTC drugs. These include products with SPF, such as sunscreen and lip balm.
“Over-the-counter drug products have more stringent requirements [than cosmetics] for record keeping, labels, recall-ability and a number of other things,” Wilhelm says. “For distributors, it’s important for the products to be made in an FDA-registered site and that products are made in accordance with FDA regulations.”
Custom HBC, like many of its competitors in the promotional products market, make products according to FDA regulations. However, it’s up to you to ask your supplier to be certain. Read more about current FDA requirements for cosmetics and OTC drugs at www.cfsan.fda.gov/~dms/cos-toc.html. —Melanie Medina
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