Why Health Club Brands Must Embrace Digital Transformation To Compete In The Decade Ahead
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As the recent article, “2019 Is Turning Out To Be Quite A Year For The Health Club Industry,” attests, 2020 will herald the start of a new era for the health club industry. Some key drivers behind what occurred in 2019 for the health club industry, like continued growth and competition for health club and fitness services, technology expanding its impact on the fitness and consumer landscapes, and robust investment activity, serve as indicators of what is to come. For operators, 2020 will bring a wealth of opportunities and challenges.
Technology within the health club industry historically focused on transactional moments by making them quicker and more efficient. Operators can now go a step further and leverage data-driven approaches to enhance the member experience in more impactful ways. From enabling new services to delivering specialized campaigns, machine learning, analytics, and other technologies will allow health club brands to understand their members and deliver new, differentiated experiences. As consumer expectations increase, thanks to the immediacy and personalized relationships delivered by new offerings from brick-and-mortar boutiques, at-home solutions, and consumer products outside of the industry, data-led strategies will become essential to succeed in a more competitive landscape than ever.
How should operators prepare strategies for the decade ahead? They will have to embrace digital transformation. Let’s explore exactly what is key to competing in 2020 and beyond and what clubs should keep in mind.
A New World: Consumer-Controlled Health and Fitness
There’s never been a more dynamic time to be in the health club industry. Fitness is no longer a single activity or a gym destination; fitness is an always-available service, integrated into the fabric of members’ daily lives. It is truly the “age of the member.”
With the largest set of fitness solutions ever offered accessible in their pockets, members have a greater ability than ever to compare options. Many health club brands have started to address this need with member-facing technologies such as mobile apps. In the future, clubs will be required to go even further by completely aligning with their members’ needs in new ways, including “frictionless” experiences”. Being competitive will require a recognition of this new reality.
In the past, the role of technology was to help club operators do what they’ve always done, only faster and more effectively. Now, successful brands will consider technology first when designing their ideal member experience. Personalized experiences are no longer a one-time activation, but rather start with contemplation and continue into sales, in-club experience, additional services, and more.
Every aspect of health club operations will have the potential to make or break a member’s experience. That is why data insights will be of critical importance in 2020 and beyond. Fortunately, with data-driven intelligence at their disposal, successful health club organizations will be able to understand their members better, empower their employees, and create new business models that center around the products and services their customers prefer. To succeed, fitness facilities will need to rely on people, programming, and technology, particularly data, to create differentiated experiences. Successful health club brands will be the ones who transform data into revenue by using customer information to determine better marketing, programs, and service opportunities.
Data, however, isn’t powerful by itself. In order to unlock value for consumers, operators will need to expose critical information to ensure every brand touchpoint and ambassador, from personal trainers and group fitness instructors to managers and front-line staff, have access to the right insights at the right time. Employees will need to have these insights at their disposal to serve members better, whether that requires identifying needs for high-touch personal training services or simply helping customers get in and out of their workout quickly.
Leading health club brands are focusing on accelerating digital innovations and, thus, digital transformation. Whether it’s training employees to respond to members more effectively or delivering more personalized fitness programming, many of the leading brands ABC Financial works with are seeking to transform their entire health club business models to be truly member-obsessed. Data-driven technologies are the holy grail for competitive health club operators, allowing them to leverage data throughout the entire member journey to drive higher value transactions and more valuable conversions, and nurture long-term loyalty and retention. Examples of these trends and more are available on the Gamification And Rewards In The Health And Wellness Space episode of the ABC Fitness Industry Innovation podcast.
This shift to member-focused fitness, however, is as exciting as it will be challenging. Consumer data will be the most valuable information an operator can leverage, and to do so will require partners who prioritize and understand that value. ABC Financial believes that every health club brand has valuable data at their disposal, and we bring the expertise and an ecosystem of partners and solutions to empower health club brands to optimize their data to create and deliver the unique fitness experiences that will be in demand beginning in 2020 and beyond.
Data intelligence is a key ingredient to the member experience, but accessing tools that enable it doesn’t guarantee success. The roadmap to member-first fitness begins by defining underlying values about the brand, members’ true needs, and product and service differentiation. No matter the amount of data points available, success for health club operators in this new era will be dependent upon understanding and anticipating the needs of members at every stage of their fitness journey.
How Health Club Operators Will Use Data To Transform Member Experience
The current fitness industry, as with most industries today, is defined by disruption. Legacy health club brands continue to compete and capture market share, as newer concepts such as boutiques and direct-to-consumer startups continue to evolve and mature. In the face of this rapid era of change, every fitness business must excel in several core areas to keep pace: personalization, staffing, and re-imagined, omni-channel fitness experiences. Foundational to each of these is the ability to leverage data-led intelligence and ensure insights are efficiently shared across all levels of the organization.
Personalized Experiences Will Require Using Technologies Effectively
Often, as a result of poor data collection capabilities, today’s health club brands struggle to deliver real and tangible personalization. From the initial discovery stage and product or service recommendations to post-sale support, companies need to collect consumer data from all touch points and deliver personalized support at every stage of the purchase path. By developing a 360-degree view of what members need across channels, health club operators can connect with prospects in a personalized way and provide anticipatory support of members.
Successful brands will execute personalized outreach by utilizing algorithms to learn about member behaviors and preferences. Advanced CRM and automated marketing systems will help develop a detailed member profile through repeated interactions and utilize this information to deliver proactive and personalized outbound marketing and tailored recommendations.
Cutting-edge operators will anticipate the needs of their members by taking advantage of cloud-capable technologies alongside AI to better track and respond to member behaviors and purchasing habits alongside broader contextual indicators. Members will seek out companies who are able to offer this next level of personalization, which will evolve towards just-in-time assistance and predictive care.
Using Technology To Empower And Enable Employees
Creating a differentiated fitness experience starts by developing an exceptional front-line team that is knowledgeable and passionate about the services on offer and empowered to solve any member problem by leveraging technology tools. Successful health club operators will increasingly invest in collaborative communication tools that democratize access to information, making analysis, and important customer information readily available at the key points needed to provide a personalized experience.
Many health club brands today face key challenges in delivering what employees need to execute an outstanding service experience. Despite collecting a number of insights on individual members from online Internet browsing behaviors, product or service purchase history, loyalty, and location, most health club brands fail to develop this information into an actionable 360-degree member view. New platforms will bring these details to the forefront of member interactions, allowing employees and managers to recognize their members and deliver personalized service and advice to improve the sales, experiences, and retention.
Competing With Re-Imagined Fitness Experiences
Health club brands will increasingly use their brick and mortar locations and experiences to collect a baseline level of data that allows for analysis of member needs. This will allow the creation and delivery of customized and convenient fitness experiences at scale. Exceptionally successful operators will go the extra mile by seamlessly integrating web, application, and wearable based digital channels into the in-club fitness experience, so they can not only elevate a member’s purchase journey but power end-to-end omnichannel analytics and new experience capabilities.
As personalization and recognition across in-club and digital channels become a greater expectation among consumers, operators will create systems that “log in” members to physical health club locations to trigger recommendations and in-club activations, inform employees how and when to deliver personalized service, and simultaneously sync the online and offline member experience.
A Roadmap For Success: Evaluating Health Club Technology Investments
The digital transformation of health club brands will be a significant challenge for many in 2020 and beyond. Simply investing in technologies will not result in success without first having a strategic vision of how any health club operator intends to compete.
Understanding your brand, members, and the experiences you intend to deliver will help to ensure that the technologies applied to the fitness experience add value, delight the member, and are executed with authenticity. Here are some questions to keep in mind:
1. When members think of your brand, what feelings, ideas, and solutions come to mind?
Defining how your brand engages with its audience and presents its offerings is the first step in deciding what technologies to apply and how you can integrate them into your organization.
2. How will you differentiate your health club brand in the marketplace?
Understanding the major elements of your fitness experiences that make you stand apart from the competition will lead you to develop the most effective technology-enabled strategies to complement your value proposition and core strengths.
3. How will you leverage technology to maximize strengths and diminish member pain points?
Using technology to solve areas of friction your members face requires that you first identify and validate their pain points. Don’t start with the technology; lead your evaluation with a clear goal in mind.
4. How will you communicate your strategy throughout the organization?
Ensuring your team understands (and buys into) a standard, consistent narrative about the digital transformation path your organization is attempting is essential. Communicate the goals, technologies, and opportunities present with this new era of retail not only with your employees but, when appropriate, your customers as well.
Leaning On The Experts
ABC Financial has helped fitness businesses drive growth by using data insights and technologies for years. The growing fitness brand, 10 Fitness, among many others, serves as an example. 10 Fitness pursued becoming insight-driven with the help of ABC Financial’s expertise by leveraging data and technology to improve billing and collection processes. With personalized reports on financial performance, membership, and sales delivered via ABC Financial systems, 10 Fitness gained insights while saving time in the back-office so they could focus more on member-facing operations, as they added new locations. This was key to their being able to execute their growth strategy. Explore the 10 Fitness story.
Having a trusted and capable partner to guide health club organizations through the process of adopting technologies and related data to gain insights that help achieve growth, enhanced profitability, and member experiences is key. There are some important things to keep in mind when selecting a technology vendor partner and explain why ABC Financial is the partner of choice for leading fitness and health club brands.
As 2020 approaches, digital transformation will become table stakes for brands to successfully compete. The use of data to create personalized, relevant and re-imagined fitness experiences will be a fundamental aspect of winning health club brands. Having reliable technology and industry partners will be essential to accomplishing this. The team at ABC Financial is here to help. Let’s discuss how you can best prepare for 2020 and the decade ahead.
About ABC Financial Services
ABC Financial (abcfinancial.com) is a premier provider of technology and related financial services for the health and fitness industry, renowned for exceptional client service for clubs and their members. Its market-leading billing and collections solutions automate the revenue cycle that enable owners and operators to achieve better financial performance, all in a Software-as-a-Service and cloud-based platform. ABC’s comprehensive technology solutions include DataTrak advanced health club management and MYiCLUBonline extensible member engagement platforms that allow owners and operators to efficiently manage employees, members, resources, sales and drive improved member engagement. Founded in 1981, ABC helps more than 7,500 health clubs across the United States, Canada, Mexico and Puerto Rico perform better and more profitably. ABC Financial is a Thoma Bravo portfolio company, a private equity firm based in San Francisco and Chicago (thomabravo.com).
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