Key Takeaways

• Proper segmentation is key to higher conversion rates and lower unsubscribe rates 
• Demographic segmentation is good, but adding in behavioral segmentation is better because a member’s behavior says more about where they actually are in their member journey
• Your Member Management System contains a treasure trove of member behavioral data 
• Artificial Intelligence can automatically, continuously, and economically identify important segments based upon demographics and member behavior 

So you want to increase revenue-per-member and member lifetime value? That means successful marketing to your current member base, and successful email marketers know that segmentation helps keep conversion rates high and unsubscribe rates low. The right message, to the right person, at the right time is when the magic happens. The same messages, to the same people, at the same time is…not. You may have some success, but you’ll never get the full value potential from what should be one of your most valuable assets: your member email list.  

According to MailChimp, the fitness industry is tied for first place for highest unsubscribe rates among all industries. Too frequent, poorly-timed emails with messages that don’t resonate with who the member is and where they are in their member journey are eroding your email lists, decreasing your ability to engage with your members and making it easier for your competition to fill the void. 

If you’re using a CRM, segmenting lists and creating multiple variations of emails should be simple. If you’ve integrated your CRM with your Member Management System, you should have access to a wide variety of member attributes on which to segment. At the simplest level are segments based upon member demographics such as age and gender, as it’s not difficult to anticipate differences in interests and priorities between a 24-year-old female and a 58-year-old male. If you’ve gone a step further and identified personas for your membership, you have even more specific groupings of anticipated interests and priorities. 

These segmentations depend upon trying to use demographic facts about members to predict what their future behavior is likely to be. What’s missing is what their behavior actually is as they progress in their member journey.  Seems kind of important, doesn’t it? Demographically it might seem to make sense that two 58-year-old men would receive the same Personal Training sales pitch. But what if one of them had never purchased Personal Training, while the other had purchased many times previously but not in the last 12 months? One needs to be convinced that PT has value for him, while the other needs to be convinced now is a good time to resume. They represent two different behavioral segments that require different messaging. 

More effective segmentation can be accomplished by combining demographics with simple behavioral data, such as ancillary spend amounts and types, last spend date, average monthly check-ins, last check-in date, etc. But even better, new AI-powered member behavior analytics can identify important behavioral segments you didn’t know existed, including segments based upon predictions of future behavior.

A real-life example: 

• A brand with 36,000+ active members averaging $25 monthly revenue per member wants to improve retention and revenue-per-member 
• By analyzing over 70 member demographic and behavioral variables, AI identified 682 high-value members with a high probability of cancelation within the next 3 months 
• Those members had each spent $1000+ on PT services, averaged $60 monthly revenue per member (140% above average), and represented $490K+ in potential annual lost revenue
• Those members all had also checked in within the last 30 days, so they clearly weren’t of the “too late, probably already gone” variety 

I’d call those 682 members a segment worthy of specialized attention, wouldn’t you? The beauty of using AI is this and many other kinds of analyses can be automatically and continuously performed with no additional effort on your part. That’s important because member demographics don’t often change over time, but their behavior certainly does. If you’re using a CRM capable of receiving pushed member data and performing automated actions, even acting upon the data can be automated and performed continuously.