Friday, 29 July 2011

Lessons from Budget Clubs – Part 2 – Data Motivation

Last time around we looked at how budget gyms or low cost clubs differentiate themselves on contracts, sales and service. Once a member has joined any type of club, they often turn into a number, probably more so at a low cost club. However, because of their business model, budget gyms capitalise on these numbers much better. Let’s look at how they gather, examine, and then use the numbers to their advantage.

Lots of data is collected and often validated at joining. Contact information like mobile number and e-mail is much more accurate and complete when it is a required field on sign-up, and confirmation is sent to the (valid) e-mail address (n.b. the usual marketing permission process should take place). Data validation at sign-up is a really useful recent development. We’ve seen data fulfillment rates of 98.5% (e-mail) and 99.2% (sms) at budget clubs compared with figures as low as 19% at local authorities/trusts. The data accuracy rates are also impressive. This is essential information for the budget business model.
*both data-sets (budget/public) based on more than 50,000 members

Reporting, analysis and statistics are a big part of running a low-cost club. With a low cost, high volume membership, monitoring behaviour and change is critical. As always, sales are a big focus with monthly reports, but retention metrics are also vital, particularly spotting trends. We need to know when members are more likely to drop-out, and to study visit frequency and member decay. Traditional measures such as 12-month retention, monthly attrition and length of membership are also considered.

Running regular reports is great, but the key to success at budget gyms is to quickly react based on the numbers. Knowing how many members (and prospects/ex-members) open your newsletters, which links they then click, and what happens next (check timetable, sign-up, ‘like’, etc) is really valuable information.

Understanding retention performance allows you to make adjustments too. You might adapt the new member journey e-mails to reduce week 4 drop-out. Another example is to send motivational text messages to members who aren’t visiting as often. These ideas are all part of the more ethical nature of the low-cost club. The business has a vested interest in making sure their members are visiting, and this is often seen as a value added service to the member.

So data is fundamental, analysis bridges the gap, and action often helps to provide a value add to the member. Our next article will look at how budget gyms manage to get even more personal with their members.

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