When It Comes to Member Retention, Knowledge Is Power

How member segmentation can help you send the most impactful message at the right time using the right message.

The more deeply you work to understand your members, the more effectively you can engage them with messaging, programming, and services that meet their needs. When you get that right, your club is perceived as an unparalleled, go-to resource for health, wellness, and more.

One of the keys to gaining that knowledge and driving retention is customer, or member, segmentation. Member segmentation is the process of dividing prospects and members based on their specific needs, preferences, and interests. Gathering and utilizing this information in depth can be critical to the personalization and customization of your messaging, helping you create offers that truly resonate.

“Member segmentation creates the opportunity to successfully advertise, market, launch new products, and support your branding, and more,” asserts Bobby Verdun, founder and president of Active Entities Consulting. “There are an inordinate number of ways to communicate to members and future members—more so than ever before—yet we’ve seen age groups, genders, and specific interests respond to communication in diverse ways. For example, 18- to 34-year-olds tend to gravitate to social media and texting, those 35 to 44 check email consistently, and older, active adults seemingly still respond to print media as well as email. Segmentation helps you reach them where they are with messages that resonate.”

The ability to target messaging creates a wide range of benefits, adds Shubham Sethi, cofounder and head of product at Gleantap.

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“Member segmentation has the power to help drive the development of consumer insights; improve brand loyalty and customer engagement; streamline mass customization; optimize for cost efficiency and resource management; leverage upsell and cross-sell opportunities; and spur referrals, feedback, and Net Promoter Scores,” he says. “Most importantly, it bolsters member happiness, and that leads to retention.”

Member Segmentation Basics

So, what do you hope to learn through segmentation? Overall, there are seven core areas most often addressed:

  • Demographic, or age, gender, income, education, and marital status

  • Geographic, or country, state, city, and town

  • Psychographic, which highlights personality, attitude, values, and interests

  • Technographic, which can include mobile use, desktop use, social media, apps, and software

  • Behavioral, which outlines tendencies and frequent actions, feature or product use, and habits

  • Needs-based, which points to product and service must-haves and the needs of specific member groups

  • Value-based, which focuses on the economic value of specific member groups on the business

For clubs, the most important fields are likely Behavioral and Needs-based, as they track prospect and member experiences along their respective journeys and actual club and program usage.

“Having that information offers a broad range of opportunities to connect with members in a personalized fashion,” Sethi says. “For instance, you might reach out with a unique offer to someone on their birthday. Offer someone who frequently takes yoga classes an introductory Pilates class. You can nudge members to come back to the gym who have not shown up in the past 30 days. Congratulate members that have achieved certain goals. Positively reinforce other milestones, like a 25th visit or six-month and one-year anniversaries. You can also send reminders to members who are overdue on their payments. Remind a prospect about a recent visit. Or why not ask for feedback or a referral from someone who has been in the gym for 20-plus times in the last 60 days?”

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You can also tailor those communications to the member’s preferred media, such as website, SMS text, and email.

Impact of Technology

In his book New and Improved: The Story of Mass Marketing in America, business historian Richard S. Tedlow notes that customer segmentation has been part of the marketing landscape in some form since the 1920s when market sizes increased in general and manufacturers began producing different models pitched at varying quality points to meet the needs of various demographic and psychographic market segments. The late 1980s saw the advent of “hyper-segmentation,” a shift toward the definition of increasingly narrow market segments. Technological advancements, especially in the area of digital communications, allowed marketers to communicate with individual consumers or very small groups.

Today, artificial intelligence (AI) has taken segmentation several steps further, offering automation and algorithms that help remove human bias. (We might assume that all weight lifters are young males, for instance, but algorithms parse the data without any presumptions to build a realistic picture of customer preferences, etc.).

“Without automation, segmentation generally works in a very manual manner, in which you’re exporting data to spreadsheets and then working on filters manually to determine the types of segments you want to reach out to,” Sethi says. “Automation also makes it easy to keep segments updated, exporting and cleaning data takes place regularly, thus eliminating time-consuming tasks and the potential for errors.”

The AI driving automation offers several advantages that optimize member segmentation even further.

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Sethi and his team have been developing new patent-pending AI technology designed to change the way member retention and engagement work for the fitness business. The technology has the capability to combine a member’s specific behavioral and demographic data to create a detailed view of their engagement patterns. Clients can use this information to intelligently target members with the right offers and messages at the right time, which in turn increases engagement and open rates for any messaging sent. In general, operators can use the platform to reach members on a granular level to power upsells, referrals, and other value-added services. Some clubs, he says, have seen up to 50 times return on their monthly investment using the technology.

Gleantap’s technology and platform, adds Sethi, help automate the customer journey through thoughtful touch points via email, text, social media, and more; drive repeat visits, bookings, upgrades, and referrals; help operators more effectively manage the sales pipeline and enable sales teams to stay on top of leads with simple automation and task management; and engage members and prospects 24/7 with two-way conversations automated through chatbots or manually through text via a mobile app; and more.

To learn more about how Gleantap can help you optimize member engagement and retention, visit their website.

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Jon Feld

Jon Feld is a contributor to IHRSA.org.