How can member engagement drive more secondary spend revenue?

  • Andy Hall
  • Sep 14, 2020
  • 6 Min Read

Download our Playbook

We know we need to engage more with our members, but what exactly does effective member engagement deliver? Lifetime value – yes.  Member retention – yes.  More referrals – yes.  Done right, it can also be a key driver of your secondary spend. Auxiliary spend will be an area we know is going to be critical to commercial success in 2020 and beyond, especially as operators get to grips with new operational procedures due to the Covid-19 pandemic, such as capped capacities.   

Since facilities were forced to close in March 2020, we’ve seen brands such as PureGym pivot their business models to offer home fitness equipment to their members, recognising the importance of driving revenue into the business during a time of uncertainty.    

And historically, we’ve seen the likes of Virgin Active and David Lloyd Leisure lead the way in terms of generating secondary spend, driven by high dwell time and high-end food and beverage outlets. You’ll often find members enjoying their morning work out followed by a day spent in the cafe working. Add to this additional services from kids soft play, tennis lessons, PT, parties, and clothing, they’ve seen a very healthy income from getting this part (as well as other areas of the business) right. And, of course, none of this can be achieved without the help of data to make smart business decisions.   

More recently, the boutique market has been shaking the dust off this approach and driving quick wins around secondary spend. Instead of installing high-end food and beverage areas, they have been able to maximise their reception desk to install protein shake stations, smoothie stations, and sell over-the-counter food on the go.  

1Rebel, as reported by Health Club Management, is a great example of how to develop secondary spend, driving multiple benefits for its business. The boutique fitness brand acknowledges that if the member experience isn’t good, they won’t be coming back for more. An important part of this involves ‘selling’ to its members every time they step through the doors. Recognising that ‘I’m healthy and I’m wealthy’ is a statement that today’s consumers want to make, and capitalising on the ‘fitness-and-fashion’ trend, 1Rebel sells t-shirts and hoodies to crop tops and street-to-gym-wear. This enables its members to achieve a ‘look’ that represents them and their connection with the brand. Beyond secondary spend, this creates awareness, builds loyalty, increases brand advocacy, and drives sell-out sessions. 

Two different approaches, two different audiences, but both doing well because they know their members and customers; trust that starts with the brand and is reciprocated by its customers in the form of increased spend.

The way forward – a solid defence and protection strategy 

There’s no doubt about it, operators are facing incredible challenges. Key to a successful defence and protection strategy is to look at alternative areas to drive revenue. For this to be successful, and to see secondary spend increase, operators will need their member engagement strategy to be firing on all cylinders, requiring accurate data to drive it. 

We know that assisted members deliver a higher lifetime value; they attend more frequently, they are more loyal and they refer more people.  

As we’ve seen in our previous blog, the better we are at delivering a good member engagement strategy, the happier and more loyal our members are.

Impact 

Think about the impact a great member engagement strategy could have on your secondary spend. What would the impact be if you enhanced or started to offer a range of other brands, products or services, such as at-home fitness equipment, home-delivered nutrition packages and subscriptions, clothing, virtual PT sessions; all delivering you a ort kick-back? A great exercise for your finance team to scope out!    

Done right, your brand could be seen as a health hub, delivering and recommending a network of partnerships that support and enable your members to lead a healthier, happier lifestyle – something we all want. A report showed that millions of Brits class themselves as ‘too busy’ to be healthy. More than half of the people polled said they want to eat healthily and get plenty of exercise – but are hindered by their hectic lifestyles, and two thirds admitted they often eat ‘badly’ because they don’t have the time to prepare nutritious food.  Imagine if, at the touch of a button, you could offer your members access to everything they needed to lead a healthier lifestyle… we think they’d be pretty happy! 

Most of us will admit we are time-poor and will do what we can to claw back time – where we can; whether this is buying ready-grated cheese, having a cleaner, using dry shampoo, or simply sending emails late at night whilst you have dinner or attempt to watch TV. 

However, on the flip side, research shows that Millennials and Gen Z – often dubbed ‘the wellness generation’ – now make up 80% of health club members and have a more intense focus on holistic health. This means it can really pay to expand your offering to provide other services that make you ‘more than just a gym’ – looking after the minds, bodies and souls of your members.

Recommendations

It’s not rocket science to recognise the power of personal recommendations. How many times have you looked at a product or service off the back of a friend or family member recommending it to you? And how many times have you bought something online after the website you were shopping on recommended it? 

Let’s apply this to your network of facilities. If you have the right engagement strategy and you have a membership base of avid members, think of the impact recommendations for additional services and products could have on them? If you’ve fine-tuned your strategy and you’re engaging with your members both virtually and in-club, the trust level will be high. You’re already serving them content and classes they like and are benefiting from. Add to this third party brands and services, all giving you a healthy kick-back on sales, and it’s a win, win.  

Summary 

You have the potential to offer your members everything they need in a bid to become healthier, happier versions of themselves, and what’s more, you can drive significant revenue to your business. By recognising the part you play and seeing the bigger picture by utilising the data, you have, at your fingertips, the power to navigate your way through this time and continue to drive your revenue now and years ahead.