The fitness industry was an early adopter of retention tactics, yet a very late adopter of member loyalty strategies. To understand the difference, think of it like this – retention tactics attempt to answer; how can I keep people from leaving? A loyalty strategy attempts to answer; how can we get all members to want to stay?
The latter causes deeper thinking about the design of the business and how it interfaces with a customer in everything it does. It forces a philosophical approach that can manifest as strategy for differentiation. It is harder to do. That’s why there isn’t much differentiation in fitness, especially for fitness-only clubs competing in the lower and middle of the marketplace.
Many clubs competing in the high-end of the marketplace seem to be asking the right questions; how do we create loyalty? But no matter where you compete across the pricing spectrum, those willing to move from retention tactics to a loyalty strategy will be rewarded.
How can you tell the difference? The kind of data you lean on and how you use it to make informed decisions and actions.
The more you lean on usage data and other member behavioral data, the more tactical you probably are. That isn’t necessarily a bad thing and looks like this; you call people when they stop using the club and try to re-engage them; you find people in your club most likely to quit and make it a point to go talk to them. You are using customer behavioral data to predict what an individual might do next.
How could this be a bad thing? Well, imagine if the broader member experience is horrible or even just mediocre. What if members feel staff is unfriendly, the club is unclean, services are difficult, and management is uncaring? What if they feel the club is just indifferent to their experience? How genuine will these tactics seem to the member?
Take ownership of your loyalty strategy with data that measures YOUR behavior. This is captured through the members’ eyes. It is their PERCEPTION. Once you understand how customers perceive YOUR behavior, you have the information to move to ‘great.’ Remember – your behaviors DRIVE the customer experience and you have total control over YOUR behavior. The value of understanding your members’ usage and behavioral data greatly increases when you have ‘member perception’ data and use it to build loyalty.
Forrester Research underscores the importance of ‘perception metrics’ in the book Outside In – by Manning and Bodine. They show that putting a number to the key customer experience drivers for your business is critical to success. For fitness, you must have metrics aligned with gym cleanliness, all friendliness touch points, equipment condition, services, and a few others. Once measured, it can now be inspected and managed.
You then understand the leading indicators of loyalty and spending. Tactics can now be deployed against the leading indicators, which allows for a far better and less reactionary member experience.
The tactics you use should devolve from a broader strategy. That strategy should have clear metrics that determine whether you are on, or off strategy. Drive your loyalty strategy first. This will determine the correct tactics.
Suppose you have a friend that never exercises, is overweight, only eats junk food, smokes, and drinks way too much. He asks you for advice on what vitamins to take to get healthy. You say, “You have to change your behaviors. You must start to exercise, eat better, don’t smoke, and drink less. Then let’s talk about the vitamin tactic.”
You would prefer to address his health and fitness strategy before you worry about a tactic like vitamins. The same thing holds true for the health and fitness of your business.
Blair McHaney spent 2.5 years as VP of Strategic Initiatives for Medallia, the world leader in Customer Experience Management (CEM) technology. He is currently an educator for the Medallia Institute, and their Subject Matter Expert for operationalizing CEM systems. He is also president of Club Works, a Medallia partner servicing the fitness industry and is the owner and operator of 2 clubs in central Washington for more than 30 years. Blair can be reached at blair@medallia.com or at 509.630.7307.
