How to Turn Your Health Club Data into Revenue

Analytics are the key to improving your data literacy. How good are yours?

Are you data literate?

Today’s business owner should be able to answer that question with some degree of certainty. Data drives so many critical decisions that being able to interpret the numbers can make or break a business, especially in the dynamic health club sector. Having data is great, but data analytics is what can take your club to the next level.

If you’re not confident in your data analytics, you’re hardly alone. Recently, the Economist polled European business leaders and found that two-thirds of executives believe that business leaders’ data literacy is insufficient. As usual, technology has outpaced human capabilities. While the tools of data collection and aggregation improve exponentially, people are lagging in interpreting the flood of information they can access.

Getting a handle on analytics can instantly return dividends. Tim Bainton, founder and managing director of business development for Blue Chip Sports Management, discovered the power of data mining in transforming his business. According to Bainton, you should strive for interpretive precision, but even just a small improvement is significant.

“Being 5% more accurate can make you 5% more profitable,” he says.

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The key, says Bainton, is to “search for the data in all things.” That can lead to predictive analytics that can track trends beyond the obvious cost-benefit model. For instance, Bainton found that by understanding the commuting patterns of his members, he could improve attendance by altering class scheduling options.

“What isn’t measured isn’t managed,” he says. “We have to embrace data analytics in everything that we do.”

Learning to read data plays a critical role in building a successful strategic vision in the fitness industry, says Bill McBride, president and CEO of Active Wellness and BMC3 in San Francisco, CA. Data helps you track consumer behavior that can create revenue streams far beyond your club’s core business objective.

“I think there is a big play for data analytics companies to serve our industry,” says McBride. “I think it’s bigger than physical activity—it’s lifestyle and related retail purchasing patterns.”

The Importance of Democratizing Data

One aspect of data analytics that's rarely discussed is how the new data-driven business model challenges the traditional top-down power structure. Interpreting data is no longer only for top management. To really unleash the power of data, you need more hands on deck in interpreting the numbers into practical change.

“Data helps you track consumer behavior that can create revenue streams far beyond your club’s core business objective.”

“Democratizing data throughout a company can help everyone—from the CEO to frontline employees—to do their jobs faster, better and smarter,” writes Brent Dykes, director of data strategy at Domo, in Forbes magazine. “Most companies recognize data in the hands of a few data experts can be powerful, but data at the fingertips of many is what will be truly transformational.”

Closing the data-literacy gap is spurring the growth of the analytics industry. According to research firm Gartner, Inc., the business intelligence and analytics market will be worth $22.8 billion by 2020. But Gartner also predicts that as “extensibility and embeddability” increase in cloud-based data collection, organizations will be more pressured to interpret data on their own.

That’s easier said than done. According to a U.S. Data Literary Survey by Censuswide, “only one-third of all workers feel confident in their data literacy skills for the analytics economy.” As Dykes says, “Many companies are discovering simply making data more pervasive and accessible isn’t enough.”

“If a data platform is difficult, it won't be used,” says business consultant Rhett Power in Inc. magazine. “Finding ways to simplify the process can eliminate some of the intimidation associated with becoming data literate. By branching out the data to those who actually use it allows research to dig deeper, gaining even clearer insight to specific performance.”

How to Make Data Tell a Story

The club management software and member technology you have in place are going to play a big part in helping your overall organizational data literacy. It’s no longer about aggregation. It’s about interpretation.

“Every action your members take that’s recorded in your system is a data point to understand member behavior,” says Kalen Pino, director of operations for the Americas for Virtuagym. “Every check-in, every class, every purchase, and especially any data collected on what members actually do in your facility needs to be tracked and presented in a way that makes sense. Without an analytics module and visualization tool, a club owner is basically stuck with a bunch of numbers when what he needs is information.”

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Virtuagym has been a leader in the digital health and fitness industry for 10 years, providing software solutions for everything from client coaching to gym apps and scheduling. By putting a priority on system integration, Virtuagym has learned that providing intuitive dashboards and accessible data reports are essential for health club owners who don’t have the background or time for a thorough interpretation of data.

Virtuagym’s latest innovation is their “business analytics module.” The software takes relevant data points and presents it in graphs and reports that tell club owners exactly what they need to know to take meaningful action. Virtuagym’s business analytics module gives you much more than numbers. It tells you the story of your business. This helps you improve overall efficiency and gives you better opportunities to create more revenue streams.

“You don’t have to be a numbers guy to understand the data,” says Pino. “It’s not like exporting a file of numbers into an Excel spreadsheet. You can really understand what is selling in your club, and identify members who are prospects for upselling.”

Virtuagym’s system is updated whenever data is generated, meaning you can get real-time reports to make quick changes to fitness programming, staffing, or whatever else the data tells you. This analytics tool can provide health club operators with much-needed clarity when it comes to data. And it’s a time-saver—no more sweating over reports that are difficult to understand.

To find out how Virtuagym can get you to the promised land of data literacy, visit their website to learn more about their range of software products for the health and fitness industry.

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Jim Schmaltz

Jim Schmaltz is a contributor to IHRSA.org