Want to increase gym revenue? Focus on yield per member
November 11, 2021 •
As an operator, when you’re looking to increase gym revenue, where do you naturally turn? Chances are your gym sales team is often your first port of call, focusing on new member acquisition with targets designed to increase gym membership sales.
No doubt secondary revenue opportunities are on your radar too: F&B, apparel and so on. But are you really maximizing these opportunities? And when it comes to gym sales, are you selling the right gym memberships in the first place?
Increase gym revenue the member-centric way
Our view is this: that focusing on yield per member should sit at the heart of any strategy designed to sustainably increase gym revenue – and that the secret is to do it in a genuinely member-centric way.
This isn’t about squeezing every last buck out of your members without offering real value in return. Quite the opposite, in fact: it’s about creating a fantastic, customer-centric experience that engages members, adds value – and in turn commands a premium, whether through higher dues or additional secondary spend.
In short, focus on your members first and the money will come.
This is where AI gym software comes into its own. By automatically gathering and collating every conceivable data point on every member, this intelligent CRM software can tell you exactly what each individual wants and needs. You can then present exactly the right product at exactly the right time, in a way that genuinely resonates with people.
We’re talking optimized in-gym marketing campaigns: upsell and secondary spend initiatives that become so well-targeted your members don’t even feel like you’re selling to them.
We’re talking fine-tuned products that members are willing to pay more for – and feel good about in the process – as they represent an enhanced, value-added customer experience.
We’re talking retention management at the heart of your efforts to increase gym revenue, growing yield per member in a customer-centric way that goes far beyond a simple post-workout coffee or the occasional smoothie.
Enhanced experience, higher gym membership prices
Willows Health & Lifestyle Centre in Australia is a great case in point, having redesigned its entire product around its members to drive higher average yield.
Scanners around the club track the activities members are doing so that, as managing director Troy Morgan explains: “We know exactly which activities are popular among our high-value members. This allows us to better direct our investment to maximize engagement and ROI, reallocating space in the club to deliver more of what they want.”
He continues: “As an example, we now know group exercise is our biggest retention tool – members stay with us on average eight months longer if they do classes – so we’re building our studio and small group training offerings and have designed our gym induction around this.
“Off the back of this product evolution, we’ve also been using Keepme to restructure our memberships to drive higher yield per member. We now have a fitness membership – cardio, strength, group ex and pool – and a high-experience membership, maximum 20 people per class, that’s based around the four areas of mind, strength, intensity and fitness. Data is already showing the length of membership to be twice as long for this high-yield group – and they get better results, which is what we’re all about.”
Health club marketing that doesn’t feel like a sales pitch
In fact, this product reconfiguration began as a test: an upsell campaign, underpinned by AI, that generated A$35,000 of additional revenue for Willows in the space of just three weeks.
For this campaign, Keepme was asked to identify general fitness members who had done some yoga classes, and who might therefore benefit from a premium package that offered more strength-in-depth in this area. The AI factored in other variables too: length of membership, frequency, likes, age profile, risk profile and so on.
A couple of hundred people were then sent highly personalized offers in emails that – worded and designed in a way that made them feel the club genuinely knew them and what they wanted – enjoyed an incredible 85 per cent open rate. Around 60 per cent of those contacted went on to make some sort of upgrade, with A$35,000 the instant result.
“It made us think: we’d had all that data sitting there for decades, unused. It represented so much money left on the table,” observes Troy Morgan, managing director at Willows.
“Whether an existing member or a new lead, we’re now confident in our ability to connect the right person with the right product. It becomes less a sale and more a personalized offer.”
Get more gym members spending more with you
It’s easy to see how your gym marketing could also harness this approach to maximise secondary spend. Imagine a scenario in which AI has segmented your yoga enthusiasts to give you such a deep understanding of who they are that selling everything from yoga apparel to yoga retreats becomes almost effortless, because you’re offering them exactly what they want. You can even present different commercial offers based on different probability of purchase, which again your AI can tell you.
The following personal training example brings this to life perfectly. Say you offer PT as individual sessions, or as packs of five or 10. Your AI can first identify the individuals from your database who will purchase from you. It can then segment them further into those most likely to purchase each of the particular packs.
Andrew would buy a five-pack, but he’s just as likely to purchase a 10-pack, so serve him that offer. Cathy, meanwhile, is highly unlikely to want anything but a single session, so don’t scare her off with a five-pack offer. Banking the one-session sale is the best way to increase gym revenue in this scenario.
Add gym automation and you have AI working 24 hours a day, seven days a week to find customers who would be receptive to an offer, before serving them with the correct one in a piece of communication that at the very least is relevant to their age and gender, and delivered in the optimal engagement format for them. It ensures you aren’t leaving any potential revenue on the table, and it’s all achieved with no human intervention.
The outcome in this example: you sell more personal training and increase gym revenue. And the potential really is massive, with broad relevance and application: one customer adopted this approach for non-dues revenue among its membership and grew it by 43 per cent in the space of just six months.
How to get more high-yield gym members
Finally, it’s also a fact that gym sales and member retention are two sides of the same coin when it comes to increased gym revenue. Recruit the right members in the first place and they’ll be more likely to both stay and spend with you.
Here’s how this works. Once your AI has built up a picture of your ideal customer – the customer who buys a 10-pack of PT every month, who recommends their friends, who has a juice on most visits, but above all who stays with you the longest, with the highest lifetime value – it also knows the factors that underpin this: everything from their age to the classes they do to the source through which they first came to you.
This is invaluable when it comes to your gym marketing, allowing you to, for example, create a custom audience for your Facebook advertising. This ensures your gym membership sales pitch is served only to those who look very similar to your best customers, helping you attract high-value, high-yield customers.
Once again, Willows has done exactly this and, says Morgan: “We aren’t just signing members for the sake of it. We’re signing the right members – the ones our product is increasingly designed around.”
And those members, of course, also happen to be the ones who stay longest and spend the most.
It’s why we believe harnessing member insight to drive average yield has to sit at the heart of any strategy to increase gym revenue.
Keepme can help you increase gym revenue in all these ways, and more besides. Book a free demo today.