What can data be used for to grow your business?

  • Andy Hall
  • Oct 05, 2020
  • 19 Min Read

By Adam Norton

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Data-driven decision making is the future for all businesses, but the fitness industry has been slow out of the blocks. For decades, operators have been focused on the ‘brick and mortar’ model – throwing money at getting as many members in the building as possible, then growing the business and expanding revenue by opening more sites or studios. However, technological advancements over recent years have completely shaken up the way we live and consequently think about fitness, meaning the world of data can no longer be ignored, and operators must be quick to embrace digital technology to both survive and thrive in the years ahead. 

Just think of how far we’ve come… Who remembers the pain of waiting for a video to buffer, watching that infuriating little circle go around and around? Or waiting for what felt like an age for a song to download? Thanks to the dramatic increase in internet speeds, those days are long gone, and we can now watch hours upon hours of our favourite box sets, or perform a series of virtual, on-demand workouts in global locations, without interruptions (kids and pets aside!) 

But technology doesn’t develop all by itself, so what’s been driving this? One of the key factors has been the change in consumer behaviours and expectations, orchestrated by Millennials and Gen Z – typically, the ‘want it all, want it now’ generations. As we know, they value speed of service and personalisation, are money-conscious, tech-savvy, and generally prefer to invest in experiences over material assets. They’re also quick to switch between brands if they don’t get what they want! It’s no real surprise then why we’ve seen a boom in budget and boutique gyms, the rise of no-contract memberships, and the coming to market of countless fit-tech products and apps, like Apple Watch, FitBit and Strava, that give users access to live, real-time data at the push of a button to enhance their fitness experiences and results.  

But why does this matter? According to research by LES Mills, Millennials and Gen Z – dubbed ‘Generation Active’ – now account for 80% of gym-goers and 89% of total users of online or app-based workouts. Therefore, if gyms just stand back and watch as fit-tech companies provide Generation Active, and those to follow, with everything they need for a great workout – be it a jog around the park or a HIIT session at home – then operators run the risk of being left by the wayside. Of course, we’re not saying that you must take on Apple by creating  your own cutting-edge, wearable device, but simply to learn from the way it’s using data to create a loyal, avid customer base, and reflecting that in your facility.   

A digital future 

Even before Covid-19 struck the globe, 85% of all gym members were doing workouts at home. This trend increased amongst the wider population during lockdown, with 44% of people doing home-based activity (including 23% doing online workouts). Interestingly, 20% of those doing home-based fitness online were doing it with children in their household, introducing the next generation to digital, at-home exercise. Older generations, too, were learning how to use Zoom and other platforms to meet up and work out – creating an altogether more ‘digitally aware’ global society. 

With people’s growing love of digital and at-home workouts – shown by the 80 million views Joe Wicks racked up on The Body Coach TV YouTube channel as he became “the nation’s P.E. teacher” during lockdown – it’s not hard to see why it’s essential for today’s operators to adjust their business models to include a strong digital offering  (something we call the digital, hybrid model, otherwise they could be waving goodbye to a large portion of their potential audience. So, why haven’t more operators gone digital sooner? The answer is usually ‘change paralysis,’ a.k.a the fear of change. There’s the common misconception that to change, upgrade or implement a new data system, it’s going to take endless amounts of time and cash, but that’s often not the case with the right data partner in place.  

Do I have enough data?

Even if you’re the smallest gym in the world, you’ll have hundreds of thousands of lines of data, but you may not know it; everything from your point of sales, to people walking in your door, to the personal data you obtain by talking to people. Using the trends found in your data can help you to understand, on a minute level, what your members are doing, so you can provide a much better service that keeps them motivated, engaged, and, ultimately, retained. 

What we’ve found over the last five years is that boutique brands like F45 and Barry’s Bootcamp have become very popular because of their ability to deliver more personalised experiences and build community, where people feel included and have that genuine rapport with trainers, fellow members and the brand as a whole. They’re usually more agile, too, as we witnessed with the speedy launch of Barry’s At-home during lockdown. The data that comes from this method of operation helps to reduce cancellations, unpaid membership fees, and more.  

That being said, the bigger gym chains can replicate this personal service by using data to create those extra touchpoints and opportunities. For example, a traditional gym that’s only ever offered in-facility training could create a digital-only or hybrid (digital and physical) membership, using its superstar coaches to record or stream workouts direct to members’ devices. This is effectively transitioning the brand outside the gym, providing value to the consumer, possibly reducing wear and tear on equipment, and increasing the facility’s potential membership. Additionally, a data system could be created with a rule to notify the operator every time drop-off rates fall below a certain level (harder to spot in the large gym chains without the use of data), providing a list of all those people so that immediate, personalised action can be taken to correct this.   

Regardless of size, however, most operators still have some way to go to harness the true power of data. Many of the smaller, boutique gyms and studios are based on a booking mentality, with studios generally holding around 20 people (maybe fewer during Covid because of capacity restrictions), and so they face different challenges. For instance, what happens when five people drop out of a fully booked class, but the people on the waiting list don’t get notified? The operator loses out financially and annoys the people on the waiting list who missed out on an opportunity to have a great experience. However, by creating an algorithm within your data system that redistributes a space out to those on the waiting list when someone cancels, it overcomes that potential issue, while also gamifying the situation (who can grab the space first?) to make the process a little more impersonal, so the operator’s not having to choose one member over another. 

Many boutique operators also sell packages, such as blocks of 10 or 50 classes. What happens when a member stops attending the studio but still has classes left to use? Using an automated system, you can remind members that they have classes remaining to keep them engaged and returning to the facility so, in future, they buy more packages and tell their friends about their experiences, driving referrals. Additionally, if data shows that on the member’s last three visits before they stopped using their class passes, they bought a banana protein shake, you could offer them a free shake the next time they come in to further incentivise and re-engage them. A low-cost, high-impact action that helps to drive attendance, retention and growth. 

Over time, you could see exactly how many people respond to a free shake or a free day pass as part of your re-engagement strategy, then take this a step further by looking at the minor detail. What age brackets are most receptive to this? Which channels are best to target them through? Really understanding what the profiling is within each subset of members, so the next time you plan a sales campaign, you know that 19 to 24-year-olds, for example, solely respond through Instagram and are most attracted by a ‘two for one’ class pass, leading to increased conversion rates. 

A final point to add here is that a data system is only as good as the information put in. For example, it’s hard to market to someone if you don’t have their correct email address or phone number. Thankfully, a system like our virtual hub can spot fake email addresses and spit them out to create and maintain a clean and useful database, so you’re not wasting time marketing to people that don’t exist!  

Don’t take the first digital concept you see!

During Covid-19, it’s understandable that many operators have taken the first digital concept they’ve seen, and not really thought about it in as much detail as they could in terms of post-Covid and their long-term strategy. This is dangerous to the brand and indeed the future success of the business. 

Starbucks is a great example of how not to follow the crowd and, instead, end up with a data system tailored to your unique audience and goals. President and CEO, Kevin Johnson, encapsulated this when he said, “Where others are attempting to build a mobile app, Starbucks has built an end-to-end consumer digital platform anchored around loyalty.” With a customer-centric strategy, Starbucks innovated the mobile order-and-pay app to overcome its customers’ pain points: convenience, line avoidance, and so on. Combined with its expansive loyalty programme, the app gives Starbucks the perfect platform to up-sell and market to coffee-lovers the world over. Furthermore, the app filters back huge amounts of data which can be used to better dissect their customers’ habits and desires. This enables Starbucks to implement new features quicker, deliver more personalised experiences for each customer, and a more integrated experience all-round. 

In this article, it’s clear how Starbuck’s forward-thinking, digital strategy paid off during the disruption of the Covid-19 pandemic. Sales from Starbucks Rewards were up 4% on the previous year, which was above the pre-Covid trends, while drive-through and mobile order-and-pay amounted to almost 90% of sales volumes in their latest period. Delivery also made a big difference for the brand. Johnson stated, “We are seeing first-hand the power of integrating physical and digital customer touchpoints to meet customers’ growing need for convenience. Our digital assets have proven to be a competitive advantage.” At Volution, we’d call this the digital, hybrid gym model. 

What Starbucks has done is the difference between using a data system to put a bandaid on a problem, and actually using it as part of an overarching strategy to drive business success. By having the right data, it’s much easier to build that plan so operators can maximise their physical footprints, digital presence and customer journeys. For example, at that vital point when you’re thinking of opening a facility in a new country, you can use the data from your current model and benchmark this off existing facilities within that region and the known cultural differences, to create a model that works. Once up and running, you can then use data in real-time to make the adjustments quicker than waiting until the end of the month to get the report on performance – sales, penetration, uptake in classes, and more. With a virtual hub, all of that information is available immediately from a central dashboard.  

Head office can then compare how facilities are performing across different regions, taking into account their unique differences. So, if the business is doing really well in South East Asia but struggling in China, for example, you can ask the questions, what’s different? What can we learn? Or if the business is doing really well in South East Asia, then this could present an opportunity to expand into Indonesia because the demographics are quite similar. This approach is one we’ve used successfully with Anytime Fitness, helping to translate its offering into new markets. 

Fine-tuning the sales journey to boost member acquisition

As Dan Zarrella said, “Marketing without data is like driving with your eyes closed.” Thankfully, one of the major benefits of data is that it allows you to better understand – and fine-tune – the customer sales journey. How do you get the lead in? Where does it come from? Who talks to the prospect? How does that then play out? All questions that data can answer.

By digitising and automating as much of the sales process as possible, operators can track the engagement with prospects across all channels (phone, social media, email, etc) to learn which messages, delivery times, journey stages, and channels get the most engagements, and, ultimately, lead to the most member conversions. With the dashboards featured in a virtual hub [Link to virtual hub blog], operators can quickly see their funnel metrics (number of prospects in the awareness, interested, consideration, intent and decision phase of their purchase cycle). Armed with the knowledge of which actions convert the most prospects, and in the best lead times, operators can then optimise their funnels and double-down on the most efficient tactics to drive more memberships and revenue.

Generating secondary spend

One of the brilliant things about data is that it allows you to spot opportunities for generating secondary spend amongst your most engaged members (those most likely to spend money) by understanding what they like to do when they’re inside the facility and then capitalising on this. For example, if you identify that a group of members likes to buy a certain food, drink or supplement after each session, you could target them with a membership package tailored to their tastes. For example, Fitness World in Denmark offers its members the option of paying an extra 100 coronas per month, which means they can enjoy one item from the fridge, such as a protein shake, a protein bar or a bottle of water, per visit. Not only does this help to create a culture, but also an additional revenue stream.   

Ramp up referrals 

As the phrase goes, “happy customers make happy customers.” In other words, if your customers like your product or service, they will refer more. In fact, research shows that brand advocates are 83% more likely to share information about a product than typical web users, and 50% more likely to influence a purchase. Furthermore, word of mouth (referrals) is the primary factor behind 20 to 50% of all purchasing decisions, not to mention that referred customers have 25% higher lifetime value than non-referred members. By using data effectively and utilising a digitised referrals system, you can identify ways to strengthen your internal community and create a feel-good vibe around your business, which, consequently, increases the likelihood of members making referrals to their inner and outer circles.  

Just look at the way Monzo has been able to engage customers and grow a successful business by taking the old brick and mortar bank system and flipping it on its head. Through digitisation, Monzo has made it so easy for people to share money, to pay for items, and to travel. One of the great things about this company is that it’s very open and transparent about what’s coming next. It has a community function in its platform, so you can see on its Trello board what’s being developed and have your input, so it has really understood the power of customer feedback, data, and the desires of the younger generations driving consumer behaviours. What’s stopping gyms for gaining member input this way? Monzo has been successful at standing out from the crowd and differentiating itself. Instead of being transactional in its approach, Monzo has gone community-focused and it’s paying off. If anyone’s in a prime position to adopt this model, it’s gyms, as community is the very foundation upon which they’re built. 

Turn up your team’s efficiency

According to Gallup, an eye-watering “85% of employees are not engaged or actively disengaged at work,” causing the global economy approximately $7 trillion in lost productivity. Contributing to this is the fact that employees are interrupted from their work an average of 56 times a day and it takes an average of two hours a day recovering from these interruptions, as getting ‘back into the zone’ isn’t something that just happens instantaneously. 

Of course, every business is different and will have its own unique set of barriers to productivity, but through automating processes, it’s possible to remove distractions, streamline processes, and free up staff, so they can concentrate on what’s most important, like coaching, interacting with members, and keeping the facility Covid-safe by carrying out regular cleaning tasks. Even in the ‘big box’ gyms where personal trainers are self-employed, you can give them the tools – and freedom through automation – that enables them to drive their businesses and gain more customers, generating more revenue for themselves and the facility. 

By automating the prospect journey through a lead management tool, it takes a lot of the ‘hard graft’ away from the sales team, and provides them with the insights to concentrate on the highest converting actions. Additionally, because every action taken by the sales team is logged and time-stamped via a virtual hub, there’s no way of cheating the system and earning commission from work that’s not been completed. 

From an operating perspective, you can see how many Net Promoter Scores have been gathered to understand gauge reputation and member engagement levels, how many free consultations have been delivered by the PT staff, the length of time between a new member joining and them receiving a wellness consultation, and how they are getting approached. A data system can also be used to hold staff members to account by monitoring stock-take versus takings in the cafe area or the number of PT sessions that are actually taking place, highlighting any discrepancies and lost revenue. Of course, there’s buckets more you can do! 

Why Volution should become your tech partner

Now that we’re clear on why data should be central to your ongoing business strategy, how do you choose the right data partner for your business? In a Harvard Business Review article, “Digital Transformation Is Not About Technology,” we’re reminded of the importance of involving the ‘insiders’ – those who understand the daily demands and operations of the business – in this process. Not only will this create buy-in from your team, but it will also ensure that you select a data partner capable of meeting the unique requirements and objectives of your business. If you get this right, you’ll wonder why you’d never done this sooner! 

At Volution, we understand that every business is different and benefits most from a bespoke data solution, which is a lot quicker, cost-effective, and hassle-free than many people would expect.

To give you a brief over, we start by conducting an initial consultation/workshop with the client to really get to know their business and each different aspect of how it operates and functions. Although we can create your entire data systems, our main solutions plug in and bolt on to your existing frameworks, meaning we don’t interfere with the systems you’re currently using  but instead look to unite and evolve your digital ecosystem into one centralised dashboard to exploit opportunities and plug gaps, driving member experience and commercial results. We then suggest and implement the particular modules and data analytics functions required to achieve the operator’s goals, following this up with a second workshop to refine those modules, really drilling down to the base level. For example, there may be differences between clubs which require some of the data functions/analytics to be tweaked. From there, we then build it back up to maximise the results.

Data is an evolving product, so we never just sell a product and walk away, but instead like to become an operator’s data partner, investing our time in your success to build that relationship. Therefore, we don’t charge a development fee, and you only pay for the features that you want.  

It’s not the data, it’s how you use it… 

Data comes from everywhere – emails, social media, surveys, club usage, equipment usage, face-to-face interactions, the list goes on and on. To make sense of it, every business could benefit from more digitisation, and for fitness facilities of all types and sizes, the opportunities are there for the taking.     

But before jumping headfirst into the digital world, it’s important to sit back and think about the fundamentals of your business to understand what data you need and how to filter it. That’s where we come in at Volution; helping you to develop a unique system to match the uniqueness of your brand, audience and goals. One that can be implemented day-to-day, in real-time to get ahead – and stay ahead – creating additional touchpoints with members and automating the trigger points to keep them engaged both inside and outside your facility through a digital, hybrid model. By pulling all of your data together, we allow you to look at data differently and get the ‘full picture’ of your business operations to unlock hidden potential. 

As your true data partner, we will help you to understand the key metrics to make smarter, faster decisions, while also enabling you to future proof your business by identifying opportunities to enhance or expand, such as opening additional clubs in new territories or growing your business digitally through apps, on-demand content or virtual training. And if there’s data you need but no solution available, then we’ll do our very best to create it. 

Perhaps best of all, data gives you the power to really diversify your offering very quickly ,to reflect the desires and expectations of members to keep them engaged and enhance lifetime value. Ultimately, a business that uses data is a business that cares about its customer experience, and this will be reflected in member loyalty, your bottom line, and the longevity of your brand.