How Gyms Are Using Member Data to Increase Retention

Technology has dramatically changed the way that health clubs conduct business. It streamlines operations, optimizes members’ workouts, and has had an impact on virtually every aspect, and every area, of a club. And rapidly emerging technologies—think virtual reality (VR), artificial intelligence (AI), the Internet of Things (IoT), and robotics—are increasing the number of possibilities exponentially.

In most cases, the goals targeted by technology and the results achieved are fairly obvious and easily understood. A front desk scanner lets a member enter without assistance; a group cycling bike tracks the user’s efforts. But, sometimes, the subtle unseen outcomes that accrue—though important—are less clear.

Because of the functions that technology facilitates, it can have a telling impact on member retention—if employed wisely.

“Technology lies at the core of our retention efforts, and I feel that, right now, we’re just scratching the surface,” says Greg Cibura, the chief technology officer (CTO) for the Fitness Formula Clubs (FFC), a 10-facility chain based in Chicago.

Whether designed to permit members to book classes online or to alert staff that a treadmill requires maintenance, all of the incessant innovating has a single seminal goal: to make the club experience more rewarding for members, and, in turn, more profitable for owners.

Al Noshirvani, the founder and chairman of Motionsoft, Inc., the Rockville, MD–based provider of club management software, makes a strong case for the potential to boost retention that lies within the mountains of data mined by high-tech.

“In this age of apps, wearables, connected equipment, and nutrition-tracking products, club operators have an opportunity to become the trusted health, fitness, and wellness resource in people’s lives—if they embrace this ecosystem of products and services,” he says. “These technologies, which are available right now on people’s digital devices, allow you to become a key part of members’ lives both within, and outside of, the four walls of your club.”

Club-tech comes in an endless number of forms, but one of the things that nearly all of it has in common is that it churns out data—lots, and lots, and lots of data. Data on attendance, utilization, satisfaction, in-club spending, employee performance, blood pressure, heart rate, instructors’ popularity, and more.

That data, considered, collected, and analyzed carefully, allows clubs to fine-tune the factors in the retention equation more precisely than anyone would have thought possible just a few years ago.

As with all things in the accelerating world of tech, mining for retention-related data bits is a work in progress. Today, the industry’s suppliers and the owners, operators, and information technology (IT) specialists at some of the nation’s leading clubs are engaged in some of the fastest-paced bits of exploration that have ever been done. Among them: FFC; Active Wellness, the San Francisco–based club management firm that oversees some 52 facilities; the Midtown Athletic Club, of Chicago, which owns and operates eight clubs, and, together with Midtown Health, oversees a total of some 30 facilities; and Gold’s Gym International, Inc. (GGI), the Dallas-based fitness franchise.

Customer Data: A Priceless Asset

FFC initiates the process of
creating the tie that binds by
introducing all new members
to the Myzone heart-rate
monitoring platform, which Cibura says helps create
“stickiness” by producing
and tracking the results that
they want. And, from that point on, thanks to the clubs’ other tech touches, they’re constantly generating data that’s useful to staff and, in turn, the members themselves.

The knowledge of what customers are thinking, as well as doing, is a priceless asset, and automated surveys, such as those offered by Medallia and Bain & Company’s Net Promoter Score (NPS) system, expedite the process. At Active Wellness, which utilizes Medallia, such surveys are dispatched on a daily basis to members 18 and older, ensuring that all are contacted on a quarterly basis. The firm’s facilities average 2,500 to 5,000 members each, and the surveys generate a 25%–30% response rate per quarter.

“They cover every department, the goal being to continuously manage and improve the member experience, and encompass everything—cleanliness, facility upkeep, selection of equipment, etc," says CEO Bill McBride, who will be speaking at the 2018 IHRSA Institute. "They allow us to take a pretty deep dive into our members’ concerns, and resolve things on a timely basis, which is critical to retention.

“The platform allows us to operationalize data in every area.”

Midtown has invested heavily in a robust reporting structure that pulls data from multiple sources, and then automatically provides information in an easy-to-read format to key stakeholders so they can monitor the performance of their department, or group, or of the entire club.

“We also have associate-configurable dashboards, so our team members can pull the customized data information they need to update strategy,” says Dustin Davis, Midtown’s director of business intelligence. “And, when implementing a new technological initiative, we tie performance to the specific KPIs (key performance indicators) that we’re trying to influence.”

Midtown is currently using an RFID member credential to track member purchases, club check- in, and check-in for such things as equipment use, locker use, and group-ex class participation.

The business can change course quickly to test something new, says Todd Thorson, Midtown’s chief technology officer, but, generally, it checks on members’ receptiveness first. “From those informal conversations, I’ve learned that some of the things we might have wanted to try weren’t necessarily good ideas.”

Among the ones that have been shelved, at least for the moment, are facial-recognition check-in systems and Bluebooth beacons, which, for example, allow people to interact with exercise equipment using their smartphones or other devices.

Real-world Implementation

Thorson, however, is quick to share a critical tech-caveat: “Technology, in and of itself, doesn’t affect retention,” he says. “It doesn’t actually solve any business problem, but, rather, gives people the tools they need to solve business problems.

“It’s my team’s job to provide the very best tools, in the easiest-to-use format, and in the most cost-effective way, to benefit the business, which, in turn, benefits the members.”

“We’re constantly iterating and trying to impact member retention,” Davis adds. “But we’ve found that the measurements and tools, themselves, aren’t what drive the ‘retention boost.’ That, rather, is a function of how effectively the club team makes use of them.”

Tech-depth, focused data, savvy strategies, and intelligent, real-world implementation—all are required to achieve the desired objectives.

“Technology clearly has an impact on retention in our industry,” is the assessment of Adam Zeitsiff, GGI’s chief intelligence officer (CIO) and senior vice president of brand innovation. “It can engage members in a club’s brand, and help them track their health and fitness goals, which, in turn, keeps them coming back to the gym more frequently, and prompts them to linger longer.”

Zeitsiff notes that GGI’s music and digital coaching app not only strengthens the bond between brand and members, but also “puts a Gold’s Gym–certified coach in someone’s pocket 24/7 at a fraction of the cost of other training services.” When you’re serving three million members, at more than 700 clubs, on six continents, as GGI is, that’s a formidable access asset.

GGI is currently working with its app provider, Netpulse, Inc., to enhance its functionality to help increase engagement and retention.

A recent addition to the company’s tech toolkit is the Gold’s 3D body-scanning technology, powered by Styku. “It allows us to give our members a better sense of the starting point on their fitness journey, and also lets us give them monthly, side-by-side visual updates on their body’s progress, which increases their engagement with their trainer and Gold’s Gym itself.”

Intensified Exploration

One thing both clear and patently true, as Cibura points out, is that the potential that technology holds to have a positive impact on retention will be explored, and exploited, even more and more aggressively. All of the companies we spoke to are already eyeing new, intriguing possibilities.

Active Wellness, for instance, is now beta-testing a dedicated SMS (short message service) texting program, called LegDay, and facial-recognition software, from a developer called Tinoq.

“With LegDay, we’re able to feed club information and updates to members’ phones via a free app,” says Mike Rucker, the company’s vice president of technology. “It’s actually a chatbot that allows people to search for information, obtain real-time class updates, and resolve issues via text, while, at the same time, reducing the service and support load at the staff level.”

The Tinoq program produces “heat maps” of exercise areas, which has helped Active Wellness make better decisions about equipment purchases and floor plans at the clubs where it’s being tested. “It also traces member usage patterns, which helps us identify breaks in habitual behavior—one of the biggest and best predictors of attrition.”

What’s next?

Pending Applications

Todd Tweedy, the vice president of marketing for Motionsoft, recounts a conversation that he had last fall with Jeffrey Cooper, a senior manager with Samsung Research America.

“He described a case where, as members move through a club—from the front door, to the locker room, the treadmills, or anywhere else—their Gear smart watches create heat maps of the facility, indicating where the greatest concentration of members are,” Tweedy says.

“Imagine using that data to reorganize your club’s layout, to distribute members more evenly, making it easier for them to get to the equipment they want. It’s a solution with the potential to touch everybody.

“I thought it was brilliant!”