READING TIME: 6 MINUTES
Like many businesses currently in the throes of digital transformation, up until a couple of years ago, Next Gen Health and Lifestyle Clubs took a relatively traditional approach to marketing. Andrew Savage, outgoing marketing director for the family-based chain of health clubs with locations in Sydney, Adelaide, Perth and Auckland, told the 2016 Marketing Technology Symposium, “Our previous approach to general marketing acquisition really was not very digital at all. We would have done a fabulous broadcast strategy plus radio and TV, print, some DM. We would have dabbled from time to time with some display, but nothing meaningful. There was really no integration between sales and marketing.”
Today the business is in a very different place after undergoing a major digital transformation with marketing technology at its heart. Savage, who has been with the company for the past six and a half years, has overseen the journey. A rebrand was the catalyst for change for Next Gen and led to a total rethink of the marketing strategy.
The first step in the journey was to put a user interface over the top of the Customer Relationship Management (CRM) system. “Prior to that, we were paper based. The whole joining experience within the club was very old-school, which it tends to be in health and fitness,” said Savage.
This step gave the business a platform which allowed a shift toward a more data-driven marketing approach. Next Gen then partnered with Experian. Using first-party data from the club, a deep dive on the customer base was performed to identify the most desirable members of the clubs. Following this, seven different customer segments were established tracking demographic information such as income, age, family status and net worth. With the help of Experian’s consumer lifestyle segmentation tool Mosaic, behavioural insights were also identified such as personal interests, decision-making processes and which marketing channels and messages customers were more likely to respond to.
Being a bricks and mortar business with physical clubs, Next Gen also set up ‘catchment’ areas for the different clubs within its portfolio. This allowed the business to identify segments for local marketing teams to target.
Adding MarTech into the mix
The next step for Savage was to build a business case for adding marketing technology into the equation. In order to do this, an eight-week sales journey was mapped out. Next Gen used this to determine a range of ways to add marketing automation and drive effectiveness within the sales journey. Salesforce was selected for the job with Savage and his team particularly interested in the platform’s journey marketing product. Salesforce integrated into Next Gen’s existing CRM and went live earlier this year. Savage said: “We really wanted to see how we could fully leverage the capabilities of the stack, in particular, how could we look at it from audience creation through to lead generation, lead capture and then engagement.”
In order to do this, Savage needed a campaign or a potential campaign to provide a test case to see how far the business could push the envelope.
In the health and fitness space, campaigns offering free trials to potential members are utilised regularly. “It’s is a great chance for us to expose the product to a high number of semi-qualified leads. The downside of that is you have a high participation rate, but it’s a fairly low conversion rate. Our conversion rates generally run about 8-10% for trials,” said Savage. Running a campaign of this nature would provide an excellent test case for Next Gen’s new tech stack.
“We wanted to really drive regeneration: that’s more effective to those that have a higher propensity to join. We wanted to take an omni-channel approach that would then go all the way through the lead capture and we also wanted to look at if we could utilise the tools to drive engagement through the actual trial itself,” said Savage.
The test case
Savage began the campaign by creating Facebook Lookalike audiences based on the data provided by existing members of the club who had joined in the past six months. These audiences were served carousel ads and posts which directed interested parties to a landing page. The landing page provided information about the trial but also linked back to the MarTech stack with a data capture form that allowed Next Gen to trigger ongoing communications. Facebook’s lead generation ads were also utilised capturing data about potential new members directly within the Facebook ecosystem.
These data sources were then consolidated and exported out to each of the club’s sales teams every two hours which allowed for rapid follow up. This triggered a seven-day journey for the potential new members. During that period, Next Gen engaged in five different interactions with the person with the aim to drive conversation by the seventh day.
The first interaction was a welcome to the club followed on day two by an SMS offer to be redeemed at the club’s cafe. On day four, the message shifted to start encouraging the conversion from trial to full membership. Day six saw another SMS, this time with a keyword-triggered response to join the club. Finally, on day seven, the person received a thank you note for participating in the trial alongside a reminder that joining now would allow them to take up a special offer.
The results of the trial, according to Savage, were “very surprising”.
Around 1,500 people signed up for the June trial which was on par with previous campaigns of this nature. You may recall Next Gen had an 8-10% conversion rate for previous trials. With the addition of MarTech assistance working to engage the potential new members, the business saw a conversation rate of 17%. Savage said: “That equated to 93% uplift from the previous trial we ran. Straight away it occurred to us that if we could integrate this across all of our acquisition strategies, there was a great opportunity to really maximise the potential from such campaigns.”
And the results were far from a one off. Another trail campaign completed in October saw an additional 11% in conversions. “That actually led to a 19% increase in the memberships that we sold in June and a 114% increase in conversion over our pre-marketing technology-led approaches,” said Savage. “The success of this has certainly generated a lot more advocacy across the whole business and has really helped to push through how this could be quite transformational across more and more of the overall member lifestyle across multiple journeys.”
This example was just the beginning for Next Gen with the business now driving efficiencies and sales across multiple areas of its business such as onboarding and low attendance to name just two. For businesses thinking of going down a similar path, Savage had the following words of advice: “The key behind this is how quickly you can learn and adapt from those first issues that come about. Probably the biggest surprise that we’ve seen from it is the ability to touch so many points across the whole customer lifecycle. These can either be process-driven, purely met through digital or you can have a very deep integration of supports in offline channels at the same time. That way, in particular, really can help break down any silos that exist because you have all the operators in the business who can really see the cross-functional benefits as well.”
Mark Abay - Content Director, Ashton Media
Mark is Content Director at Ashton Media. It's his job to create interesting and engaging conference programs that stretch the thinking of our attendees. Mark works closely with our industry advisors to ensure the conference content is aligned with the needs and interests of our audiences.