Why your facility should invest in marketing automation and AI.
Technology investments are creating significant business value in 2022.
The latest McKinsey Global Survey on technology asked about different types of technology transformation initiatives. According to respondents, more than three-quarters of the initiatives their companies pursued have yielded some or significant cost reductions and improvements to employee experience. Additionally, more than two-thirds of respondents said these change efforts increased revenue from existing streams, and more than half cite the creation of new revenue streams — for example, a new product line or new business.
One type of technology transformation initiative you should consider implementing at your facility is AI and marketing automation.
According to Marketing Evolution, AI marketing uses artificial intelligence technologies to make automated decisions based on data collection, data analysis and additional observations of audience or economic trends that may impact marketing efforts.
AI tools use data and customer profiles to learn how to best communicate with customers, then serve them tailored messages at the right time without intervention from marketing team members, ensuring maximum efficiency. For example, if a member buys a tennis racquet from your pro shop, an email for tennis lessons would be sent to them automatically, encouraging them to sign up.
One facility that is utilizing marketing automation is Active Wellness. According to Mike Rucker, the chief digital officer for Active Wellness, they currently use their own proprietary tech stack made up of software they’ve both built and purchased. Rucker said they haven’t found the perfect Swiss Army Knife that can do it all for them just yet.
“We try to automate any task that does not erode the member experience,” explained Rucker. “Any activity that’s repeatable we evaluate for potential optimization and automation. This runs the gamut from simple member anniversary emails to batch posting social media to complex member service tasks.”
Rucker said that marketing automation affords them the opportunity to scale and enables them to track messaging and other marketing activities across a sample group so they can measure efficacy and continually improve. Lastly, it allows them to batch processes — like scheduling a month’s worth of social media in a couple of hours — to improve efficiency.
Another facility utilizing AI and marketing automation is Midtown Athletic Clubs, which has invested in HubSpot’s CRM and sales management software during an enterprise resource planning rebuild.
“We want to identify and use our data to specifically target prospects and members, and meet them where they’re at,” said Jon Brady, the president of Midtown. “I think that is a key part of the technology trends we are seeing and have been seeing for several years in different consumer-led industries. I think we’re just getting to the point now where we can send targeted communication when someone buys a smoothie, for example. We’re connecting the dots and joining the spider web of data and information to make it personalized and targeted at the individual level.”
Brady acknowledged investing in marketing automation requires a lot of work and collaboration. Staff members needed to be trained on how to use the platform. In addition, “If yes then” scenarios had to be added into the software and staff had to understand what the data meant.
Despite the time and challenges, Brady knows the investment was more than worth it. The software launched in December 2021 and they didn’t fully tap into its capabilities until February 2022. However, Midtown had more leads in January 2022 — a month into the new software roll out — than they have ever had before.
Despite their success, Brady knows not all gym operators may be onboard with marketing automation.
“Do I think every club should implement marketing automation? Absolutely,” said Brady. “Do I think they will? I’m not so sure. It is a big investment both financially and time wise — especially while rebounding from the pandemic. However, the proof is in the pudding that it’s worth it.”
Rucker agreed that undoubtedly operators should invest in marketing automation. He said this type of technology is improving quickly, and the marketplace is competitive, so with more options it’s also getting more affordable. “Ultimately, when we build automation in an empathic way, we’re improving the lives of our customers,” he explained. “We’re also able to operate with less staff, which is becoming increasingly important during labor shortages.”
While it’s clear marketing automation can have a huge impact on the fitness industry and business operations, it’s also important to keep in mind the barriers for the industry.
Rucker said he is extremely bullish on an emerging company called Middle because companies like Zapier exist, but health clubs haven’t had their own unique Integration-Platform-as-a-Service until now. Unfortunately, many technology partners in the industry have thrown up significant barriers for health clubs to truly join the application programming interface economy.
“However, the good news is there are tailwinds on the horizon that are going to disrupt the persistent integration issues our industry suffers from at a macro level,” said Rucker. “As such, things should get interesting regarding what we can do with integrations to improve the sophistication of our automations in the coming years.”
