Retention
War on attrition

Crime-busting software is now set to be used in a new war on health club attrition rates. Dr Paul Bedford reports

By Dr Paul Bedford PhD | Published in Health Club Management 2017 issue 1


In 2004, while working as a computer scientist at the University of Southern California, Jafar Adibi took counter intelligence to new heights when he developed software capable of finding hidden links between known criminals and their as-yet-unknown confederates.

Adibi used mathematics, combined with publicly available information, to determine hierarchical relationships that could help fight the war on crime. In short, he was able to analyse things criminals have in common in order to find connections, and with this identify other potential criminals with a high degree of accuracy.

Predictive technology – an area of data mining that deals with extracting information and using it to predict trends and behaviour patterns – is not new. However, Adibi’s model goes much deeper than has previously been the case, collecting and merging many different types of data source and applying novel predictive modelling analytics to discover hidden leads.

Moving into fitness
Adibi is now CTO and co-founder of Reunify – a company that specialises in bringing his predictive modelling analytics to discover hidden patterns in other sectors – and his technical genius is set to take the global health and fitness industry by storm, by helping clubs address the age-old problem of member retention.

Working alongside Rob Gregory and me, Adibi’s model of predictive technology is now being used to predict – from the moment a member joins – their likelihood of quitting, the length of time they’re likely to stay as a member, their lifetime value and whether they’re likely to buy personal training, as well as a host of other useful information.

Unlike traditional software that applies the same algorithms each and every time to predict a risk of quitting, Reunify learns the member’s behaviour and then constructs a risk of quitting score. Applied to the health and fitness industry, it enables operators to identify and interact with high value/high risk clients in real time, as the data is constantly updated. Armed with truly personal information, these interactions help improve levels of engagement, customer satisfaction and ROI.

Essentially, the system combines two types of data: structured and unstructured. Structured data is displayed in columns and rows that can easily be ordered and processed by data mining tools such as CRM systems. Most operators are familiar with this and use it effectively.

However, unstructured data is less familiar and can include video, text and voice. It’s much harder to analyse, but is incredibly useful because the content is so rich. It’s also vast – just think of all the social media content out there. In fact, it’s estimated that up to 80 per cent of business-relevant information originates in unstructured form, primarily in text.

Combining both types of data is extremely powerful, but very few fitness operators have started this journey. Think of it like a puzzle; without using unstructured data, you will never complete the picture.

By collecting and merging both types of data, we can add hundreds of additional data points to the customer profile – information such as occupation, income level, neighbourhood, shopping habits, important affiliations and satisfaction levels.

Industry game-changer
Life Time, a chain of private health and fitness clubs in the US and Canada, was the first to trial the software back in 2013. It rolled it out to all 121 clubs less than two years later, having experienced a 20 per cent increase in retention.

Harlan Smith, vice president of member services and retention, explains: “Most companies carry out surveys and use NPS scores to react to members’ opinions, but in addition to this we want to be proactive – to anticipate what our members want.

“We tested Reunify across 15 clubs and used the predictive nature of the software to intercept members. The interface is designed from a team member’s point of view, to help them take action. As the customer swipes in, we can see their risk rating alongside a photograph and other personal information, enabling the team to connect the dots and help direct the customer accordingly.

“It’s not complicated – just a series of small, easy fixes – but health clubs have thousands of members. It’s very hard to get to know everyone personally. The software gives our staff a reason to approach members and make personal connections. That’s very important for retention, because it’s very easy to break up with a company or a brand where there’s no loyalty; far harder to do when you have a relationship with people.”

That may sound similar to other retention solutions on the market, but it’s all about the quality of the data – using Reunify’s technology, a crafted script can be written for each individual member.

Adibi explains: “Until now, operators haven’t had either enough data or the right type of data to consistently deliver the sort of results we’re achieving. If we can deduce member sentiment from text analytics, it vastly improves our understanding of whether a member is going to leave or if they are at risk of posting a negative review, and so helps operators decide whether to intercept.

“The interactions clubs typically have with members may be friendly – ‘hello, how are you getting on with your programme?’ – but they don’t really make a difference. We’re reinventing the membership proposition, taking it to a new level where we can help operators and their staff develop meaningful relationships with their members. Operators that understand this and take action will win the race.”

Life Time has certainly recognised this. It has observed a significant difference in retention rates between members who were intercepted off the back of Reunify and those who weren’t – even among low-risk members. It currently exceeds 50,000 intercepts a month, has retained members better than the industry average for the past three years, and is looking to increase the volume of intercepts per club during 2017.

“We’re interested to see what happens in the long term,” adds Smith. “This is likely to impact things we haven’t even measured yet, such as how intercepts impact brand loyalty, as well as referrals and ancillary spend.”

Human touch
But customer engagement isn’t just about technology: it’s the combination of this technology and the human touch that’s critical to optimising results, which is where our partnership with Reunify comes into play. Every member of staff plays a vital part of the solution, and globally Rob Gregory and I will deliver the personal interaction training angle to help health and fitness operators really maximise the benefit of every member interception.

“The technology is incredibly powerful, but it’s only a tool to help us connect with members and have deeper relationships with them,” continues Adibi. “Staff and trainers of the future will need to be experts in the field of member engagement.”

How expert staff have become is another thing Reunify can measure, as the technology allows operators to judge the quality of staff interactions with members. It automatically understands the information staff input following their customer engagement, so operators can quickly see which interactions are most successful and how staff are performing.

Seeing into the future
No one has really moved the needle on attrition in health clubs over recent years: we’re still losing at least 50 per cent of our members annually. The ultimate aim must be to get close to the customer, so we understand their opinions, needs and aspirations – and new innovations such as Reunify allow us to do exactly that.

It’s a little scary to think just how much information we’re putting out into the ether every time we buy online or post on social media, but used in the right way, this data can make our lives easier and our experiences better, both inside and outside of our health clubs.


About the author

 

Dr Paul Bedford
 

Dr Paul Bedford is a leading authority on retention, attrition and customer experience, and author of the world’s largest retention study.

www.retentionguru.co.uk


Using Reunify’s data, Life Time clubs are able to craft scripts for staff to speak to each individual member Credit: photo: Life Time, The Healthy Way of Life Company
The software helps clubs build meaningful member relationships Credit: photo: Life Time, The Healthy Way of Life Company
Life Time completes 50,000 intercepts a month, and exceeds industry retention rates Credit: photo: Life Time, The Healthy Way of Life Company
 


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SELECTED ISSUE
Health Club Management
2017 issue 1

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Leisure Management - War on attrition

Retention

War on attrition


Crime-busting software is now set to be used in a new war on health club attrition rates. Dr Paul Bedford reports

Dr Paul Bedford PhD, Retention Guru
Adibi’s software has proved invaluable to gyms
Using Reunify’s data, Life Time clubs are able to craft scripts for staff to speak to each individual member photo: Life Time, The Healthy Way of Life Company
The software helps clubs build meaningful member relationships photo: Life Time, The Healthy Way of Life Company
Life Time completes 50,000 intercepts a month, and exceeds industry retention rates photo: Life Time, The Healthy Way of Life Company

In 2004, while working as a computer scientist at the University of Southern California, Jafar Adibi took counter intelligence to new heights when he developed software capable of finding hidden links between known criminals and their as-yet-unknown confederates.

Adibi used mathematics, combined with publicly available information, to determine hierarchical relationships that could help fight the war on crime. In short, he was able to analyse things criminals have in common in order to find connections, and with this identify other potential criminals with a high degree of accuracy.

Predictive technology – an area of data mining that deals with extracting information and using it to predict trends and behaviour patterns – is not new. However, Adibi’s model goes much deeper than has previously been the case, collecting and merging many different types of data source and applying novel predictive modelling analytics to discover hidden leads.

Moving into fitness
Adibi is now CTO and co-founder of Reunify – a company that specialises in bringing his predictive modelling analytics to discover hidden patterns in other sectors – and his technical genius is set to take the global health and fitness industry by storm, by helping clubs address the age-old problem of member retention.

Working alongside Rob Gregory and me, Adibi’s model of predictive technology is now being used to predict – from the moment a member joins – their likelihood of quitting, the length of time they’re likely to stay as a member, their lifetime value and whether they’re likely to buy personal training, as well as a host of other useful information.

Unlike traditional software that applies the same algorithms each and every time to predict a risk of quitting, Reunify learns the member’s behaviour and then constructs a risk of quitting score. Applied to the health and fitness industry, it enables operators to identify and interact with high value/high risk clients in real time, as the data is constantly updated. Armed with truly personal information, these interactions help improve levels of engagement, customer satisfaction and ROI.

Essentially, the system combines two types of data: structured and unstructured. Structured data is displayed in columns and rows that can easily be ordered and processed by data mining tools such as CRM systems. Most operators are familiar with this and use it effectively.

However, unstructured data is less familiar and can include video, text and voice. It’s much harder to analyse, but is incredibly useful because the content is so rich. It’s also vast – just think of all the social media content out there. In fact, it’s estimated that up to 80 per cent of business-relevant information originates in unstructured form, primarily in text.

Combining both types of data is extremely powerful, but very few fitness operators have started this journey. Think of it like a puzzle; without using unstructured data, you will never complete the picture.

By collecting and merging both types of data, we can add hundreds of additional data points to the customer profile – information such as occupation, income level, neighbourhood, shopping habits, important affiliations and satisfaction levels.

Industry game-changer
Life Time, a chain of private health and fitness clubs in the US and Canada, was the first to trial the software back in 2013. It rolled it out to all 121 clubs less than two years later, having experienced a 20 per cent increase in retention.

Harlan Smith, vice president of member services and retention, explains: “Most companies carry out surveys and use NPS scores to react to members’ opinions, but in addition to this we want to be proactive – to anticipate what our members want.

“We tested Reunify across 15 clubs and used the predictive nature of the software to intercept members. The interface is designed from a team member’s point of view, to help them take action. As the customer swipes in, we can see their risk rating alongside a photograph and other personal information, enabling the team to connect the dots and help direct the customer accordingly.

“It’s not complicated – just a series of small, easy fixes – but health clubs have thousands of members. It’s very hard to get to know everyone personally. The software gives our staff a reason to approach members and make personal connections. That’s very important for retention, because it’s very easy to break up with a company or a brand where there’s no loyalty; far harder to do when you have a relationship with people.”

That may sound similar to other retention solutions on the market, but it’s all about the quality of the data – using Reunify’s technology, a crafted script can be written for each individual member.

Adibi explains: “Until now, operators haven’t had either enough data or the right type of data to consistently deliver the sort of results we’re achieving. If we can deduce member sentiment from text analytics, it vastly improves our understanding of whether a member is going to leave or if they are at risk of posting a negative review, and so helps operators decide whether to intercept.

“The interactions clubs typically have with members may be friendly – ‘hello, how are you getting on with your programme?’ – but they don’t really make a difference. We’re reinventing the membership proposition, taking it to a new level where we can help operators and their staff develop meaningful relationships with their members. Operators that understand this and take action will win the race.”

Life Time has certainly recognised this. It has observed a significant difference in retention rates between members who were intercepted off the back of Reunify and those who weren’t – even among low-risk members. It currently exceeds 50,000 intercepts a month, has retained members better than the industry average for the past three years, and is looking to increase the volume of intercepts per club during 2017.

“We’re interested to see what happens in the long term,” adds Smith. “This is likely to impact things we haven’t even measured yet, such as how intercepts impact brand loyalty, as well as referrals and ancillary spend.”

Human touch
But customer engagement isn’t just about technology: it’s the combination of this technology and the human touch that’s critical to optimising results, which is where our partnership with Reunify comes into play. Every member of staff plays a vital part of the solution, and globally Rob Gregory and I will deliver the personal interaction training angle to help health and fitness operators really maximise the benefit of every member interception.

“The technology is incredibly powerful, but it’s only a tool to help us connect with members and have deeper relationships with them,” continues Adibi. “Staff and trainers of the future will need to be experts in the field of member engagement.”

How expert staff have become is another thing Reunify can measure, as the technology allows operators to judge the quality of staff interactions with members. It automatically understands the information staff input following their customer engagement, so operators can quickly see which interactions are most successful and how staff are performing.

Seeing into the future
No one has really moved the needle on attrition in health clubs over recent years: we’re still losing at least 50 per cent of our members annually. The ultimate aim must be to get close to the customer, so we understand their opinions, needs and aspirations – and new innovations such as Reunify allow us to do exactly that.

It’s a little scary to think just how much information we’re putting out into the ether every time we buy online or post on social media, but used in the right way, this data can make our lives easier and our experiences better, both inside and outside of our health clubs.


About the author

 

Dr Paul Bedford
 

Dr Paul Bedford is a leading authority on retention, attrition and customer experience, and author of the world’s largest retention study.

www.retentionguru.co.uk



Originally published in Health Club Management 2017 issue 1

Published by The Leisure Media Company Ltd Portmill House, Portmill Lane, Hitchin, Herts SG5 1DJ. Tel: +44 (0)1462 431385 | Contact us | About us | © Cybertrek Ltd