The relationship between business and technology is undergoing an undeniable transformation across the board.
While technology’s traditional role in business has been to optimize efficiency and streamline operations, new applications of technology have grown to now drive business innovation, creativity, and strategy.
In an age dominated by consumer satisfaction, implementing technology that can gauge common trends and behavior of its clients is now businesses’ most powerful tool to meet market demands.
To do this, there needs to be a company-wide buy-in, from the top down in order to facilitate an entire enterprises’ growth and pivot towards digital innovation.
Ironically, this business-altering technology is not just attainable through complex analytics software, but can actually be performed just as well by a human being. Behold, the power of the modern-day data analyst.
By executing a strategy based on consumer patterns instead of antiquated projections, businesses go directly to the source to enhance the customer experience in tandem with their own initiatives. This data can prove to be invaluable both in terms of customer acquisition and sustaining client satisfaction with services.
Furthermore, this approach naturally pushes businesses to meaningfully engage with their clients on the new level expected in the modern climate of the corporate world.
The inevitability of analytics-based business
This digital transition is gradual and unavoidable, but not without incident.
Apart from general and cultural pushback from long-standing businesses to adapt to data-driven technology, the most pressing issue facing digital transformation is the lack of adequate talent to implement this change.
In fact, 65% of CIOs state that the technical skills shortage is directly impeding the current state and potential growth of modern businesses and needs to be prioritized.
Similarly, John Chambers, CEO of Cisco for 20 odd years, predicted that one-third of businesses today will not survive the next ten years because they will not keep pace digitally, cautioning, “Either we disrupt or we get disrupted.”
The main barrier to this progress is a matter of perspective: Instead of holding firm to traditional corporate values, business leaders need to establish new cultures advocating continuous learning and implementation of accessible technology.
Use Case: Target
The potential of modern analyst capabilities cannot be understated. Take for example Andrew Pole, the man who casually used analytics to predict if a given client shopping at Target was pregnant in 2010.
As part of an outreach campaign, Target planned to appeal to soon-to-be moms with great deals and offers for all their pregnancy and newborn needs. Pole found that expectant mothers were more likely to make specific purchases, like large purses, particular vitamins, and organic cosmetics.
He then devised an algorithm that compared purchase history to customer demographics to determine the probability that a female shopper was pregnant. If client patterns fell within the parameters, she would be given maternity related coupons.
His algorithm turned out to be so accurate that when a father angrily confronted a Target manager about why his young daughter was given these coupons by an employee, he returned several days later to apologize when his daughter finally confessed that she was pregnant.
While Pole’s use of big data for Brick and Mortar retail was neither the first nor last of its kind, it nonetheless set the stage for how custom built analytics can be instrumental in driving revenue in accordance with its consumer base.
Emerging Industry: Fitness Clubs
The fitness industry is a prime example of a brick and mortar enterprise with analytical potential that is currently underserved. Health and wellness as an enterprise has grown exponentially over the last decade.
Consider technological developments that have become common phone features: Applications can now easily track, monitor and log anything from distances to net calories to muscle gain.
Similarly, advancements in fitness-adjacent spheres like injury prevention/rehabilitation technology, optimized yet fashionable athletic clothes, and heart rate monitors have similarly contributed to the clout of the industry.
Following suit, fitness clubs are modernizing to provide the newest management software and most intelligent training equipment possible for their clients. Traditional spin classes have been transformed into virtual reality races, workout summaries can be integrated across various application platforms, and automated check-ins now allow customers to access their gyms at any time of day.
Why Fitness Clubs? Easy access to analytic information
The structure and facilitation of a fitness club make it an ideal candidate to utilize analytics to enhance its overall experience for its members. Gyms arguably store and accumulate more first party data than most traditional Brick and Mortar enterprises.
How?
Consider this:
Before starting a membership, clients are required to disclose extensive personal information in addition to any specific details requested by the gym. Every time a client visits the gym, this data is built upon by way of attendance, class sign ups, purchase history, etc., providing more than enough information for analysts to gauge client behavior.
Ironically, when clients consistently do not attend the gym, they still contribute even more valuable data to their customer profiles, as this can typically signify low satisfaction or potential to terminate their contract.
On a macro level, business intelligence can compare prior sales results to current sales stock and supplies to make educated revenue projections, which can then be used to plan business strategies to either maintain or boost income.
Analytics features will create a comprehensive breakdown of what specific services (memberships, Point of Sales purchases, additional class/training fees) are driving profit and proportionately how much profit each area is driving.
Accordingly, this information is equally viable in bringing to light what aspects of a fitness club(s) need improving. If managing multiple clubs, business intelligence can compare sales forecasts and correlating patterns to make proper adjustments to clubs that are generating less profit or attendance than others.
Analytics intelligence to structure a gym
Furthermore, analytics can play an integral role in organizing a fitness club’s schedule. More important than offering appealing classes, they need to be scheduled at the proper times in order to attain optimal attendance, participation, and ultimately client satisfaction.
Since peak hours at fitness clubs can drastically vary for different client demographics (older members tend to work out in the morning compared to younger members at night, etc), analytics can use prior class attendance records and reviews to predict the best classes and most popular instructors for the proper time of day.
Similarly, by tracking demographics during peak hours, classes can be organized around times where certain clients are more likely to attend. This strategy is doubly effective: More classes or training options will inevitably make those peak hours less congested in cardio or weight rooms.
Additionally, in the common event that a class needs to be substituted by another instructor or replaced with a different class altogether, data trends will propose comparable substitute options that will likely attract and please that particular crowd.
Analytics to predict and combat customer turnover
Above all other advantages of embracing digital technology applications for fitness clubs, this tool is unmatched in countering the most significant problem in the industry: churn.
Although there is not an exact metric to foresee the reasons that lead to client turnover, various factors can be considered to identify “at-risk” clients to churn.
As previously mentioned, fitness clubs naturally collect scores of customer data that can be readily applied to understanding the diversity and habitual behaviors of their client base.
Analytics can identify peak and valley hours, member attendance patterns, and active vs. inactive client profiles to first create a neutral background.
Then churn-risk assessment on both an individual and aggregate basis can be concluded based on commonly related factors like attendance consistency, retail purchases, fitness goal progress, online engagement, contract duration, class bookings vs attendance, and personal demographics.
When this data is categorized and compared to patterns exhibited by former clients who terminated their contracts, overall retention ratios can be predicted and individual at-risk clients can be easily identified.
Once identified, fitness club owners have the unique advantage to disrupt retention predictions by targeting at-risk members with customized marketing campaigns and offers to draw them back in.
These “smart offers” can serve dual purposes: Not only will your customer be incentivized to take advantage of this promotion, but he or she will also feel personally catered to. This simple yet sincere gesture can achieve volumes in terms of closing the gap between management and customers and establishing a positive rapport.
By utilizing the power of analytics, club managers can replace intuitive business decisions with fact-based predictions regarding customer satisfaction. Accordingly, initiatives targeting churn and overall client approval can not only mitigate churn, but also provide unprecedented insight on how to maximize profits from club services, products, classes, or even trainers.
Inverting this data can also give you the behaviors of your least likely to churn members, which can, in turn, be used in customer acquisition campaigns. You can identify the average demographics, classes attended, and source campaigns of your most active and profitable members and use that data in your message and audience building.
Conclusion
As the fitness industry as a whole has followed the widespread transition of prioritizing consumer experience above all else, fitness clubs need to adopt the same mentality towards their clients.
Although fitness clubs are only a small microcosm of the digital revolution, their example is relevant to businesses spanning all sizes and industries. The digital era is here and business leaders, including fitness club owners, need to adapt accordingly.
Or in much more enduring words: “Disrupt or be disrupted.”
Guest author: Laura is a Marketing Specialist for Perfect Gym Software. She is a native born Los Angeleno recently relocated to Warsaw, Poland who spends most of her time at the gym, on an airplane, or online shopping.
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