How Can Your Health Club Grow Revenue?

PROBLEM

You can’t grow revenue without first retaining revenue.
If your monthly attrition is more than 1.5%, chances are you’re going to struggle with revenue growth. Even if you’re killing it on new member sales every month, you’re not solving the problem, just masking it. Those new member sales come at high cost, meaning you’re dragging down your profit margins even if you succeed in pushing revenue up slightly.

SOLUTION

Proactive focus on revenue retention, not just member retention.
Your best revenue generating assets are your current members, and among those are a minority who are driving a large proportion of your profits. They spend more and stay longer, giving you the highest return on your member acquisition costs. In many cases, keeping one of those members just one month longer equals more net revenue than signing on two unknown new members, with much less cost and effort.

AI-driven Easalytics does a great job of predicting attrition risk. It can analyze years of member behavior and attrition patterns in your clubs and discover the unique predictors of when your members are likely to cancel.

Couple that risk score with each member’s lifetime value and predicted revenue loss, and you’ll have a precisely targeted list of members you KNOW are worth the effort to get the best ROI in terms of retaining revenue. And because AI can provide as much as 3 months advanced warning, you can be proactive in engaging with these members, rather than those less-than-successful reactive save attempts when members have already told you they want to cancel.

PROBLEM

It’s difficult to increase PT penetration and your revenue per session is too low.
Many clubs say their best chance to sell PT services is when a new member signs up, but many long-term PT purchasers don’t purchase until after their 6th month of membership. Also, many clubs rely on free session offers and discounts to entice first-time buyers, but only about 20% of buyers may actually require incentives to buy, unnecessarily slashing profits.

SOLUTION

Identify members who are most likely to buy, when they are most ready to buy.
They say timing is everything in sales, but too few clubs are leveraging timing with their PT marketing. AI-driven Easalytics can analyze years of Personal Training member behavior and purchase patterns in your club and identify members who are demonstrating a high likelihood of purchasing. This allows you to time your PT pitch to members when they are likely to buy, increasing conversion rates while reducing the need for costly incentives. You’ll also reduce ad fatigue and dreaded unsubscribes by avoiding ill-timed, low probability touches.

Caution: Some purchase prediction models out there rely mostly on sociodemographic information rather than behavioral information. That’s really just identifying people who are capable of buying, not necessarily likely to buy. If you were selling cat food, would you rather know that someone can afford cat food, or that they had just purchased a cat?

PROBLEM

Long-term revenue growth is painfully slow, even when new member sales are successful. When new member sales are flat…ugh.

How can you identify opportunities to increase revenue that aren’t reliant only on high numbers of new members?

SOLUTION

Identify high value segments, as well as segments who are underperforming their revenue potential.

They’re at opposite ends of the spectrum but they’re both important. Easalytics can identify the high value segments and you can shape targeted marketing efforts around attracting more members who are like them. This helps offset periods of flat new member sales with a higher proportion of high value members. If any of those high value segments are also below average in duration, you can focus on retention efforts too.

By identifying underperforming segments, you can shape targeted marketing efforts around increasing spend closer to the level of their peers. For example, one club identified Males Age 55+ who were active club users but underspending compared to other members. Targeted messaging about benefits of specialized PT services and classes likely to appeal to that segment resulted in an increase in average revenue per member for that segment.

PROBLEM

You know you want to impact your most important revenue KPIs.

But how do you determine where to take action without spending lots of time on data analysis or hiring a full-time analyst?

SOLUTION

You know you want to impact your most important revenue KPIs, but it’s difficult to determine where to take action without spending lots of time on data analysis or hiring a full-time analyst.

Easalytics SmartSights AI-driven automated business intelligence can monitor thousands of KPI trends, identifying sub-trends and microtrends hidden many levels below the aggregate KPIs you most often see. What if SmartSights was automatically identifying opportunities like this for you?

Fill out the form and a member of our team will be in touch.