How Next Gen Clubs created a customer-based digital marketing strategy

Marketing director of health and fitness clubs chain shares step-by-step how he's embraced customer lifecycle marketing, martech and data to get demonstrable sales results

Andrew Savage
Andrew Savage

Marketing automation platforms will drive great customer strategy, but it’s actually developing the journeys and lifecycle approach that is what delivers big business results.

That’s the view of Next Gen Health and Lifestyle Clubs marketing director, Andrew Savage, who caught up with CMO at the recent Salesforce Future of Marketing event in Sydney to talk about how his organisation has transformed customer communications off the back of savvy tech investment, customer segmentation work and journey building smarts.

The gym and fitness group went live with Salesforce Marketing Cloud in March, not long after a rebranding and repositioning exercise aimed at shifting from a retail-centric to product-led approach. In line with this, Savage said it was looking to move away from traditional broadcast methods of engagement, including radio, press and TV, to more targeted, one-to-one digital marketing.

“We had done an in-depth segmentation analysis in the months previously and were able to find out exactly who our customers were,” he said. “This [Marketing Cloud investment] was a natural progression aimed at taking that further, and helping us become smarter in terms of targeted marketing.”

Savage said the marketing team devised a range of different customer journeys to address, all stemming off four key areas of interaction – acquire, on-boarding, engagement and retention – but knew it couldn’t do all of them at once. There were also the skeptics in the business prior to rollout that needed to see results.

What enabled Savage to get the green light on tech spend was an immediate need to make the sales process more robust.

“We had a documented sales process, but we wanted to bring in automation to underpin that and drive conversions over that eight-week sales cycle,” he said. “Having that immediate business aim made it possible to get the longer-term investment over the line.

“We looked for the one journey we could put in place quickly that would help us drive a more immediate return on investment and a proof of concept. That tends to happens more in sales than retention or engagement, so we decided to bring about a sales journey.”

Next Gen mapped out the eight-week sales cycle for prospects, then worked with a Salesforce partner to build that complex journey through Salesforce Journey Builder. The work saw the group’s marketing automation and bespoke CRM platforms linked using FTP data exchanges. Savage noted that alongside marketing, sales and IT teams were both involved in the rollout.

The Next Gen eight-week sales cycle consists of different milestones that reflect how prospects progress through their initial inquiry, to a tour of the club, follow-up activity, trials and then sign-up. First-party data for member profiling and segmentation was the fuel for targeted cross-channel campaigns across social and display advertising, email and SMS.

“Once that was in, we went into a learning stage, getting our heads around what the program or platform can achieve, refining some things, then looking back at the original business case and other journeys we want to do to start rolling them out as well,” Savage said. “That’s been what we’ve done over the last six months.”

Four months in, Next Gen had seen a 10 percent increase year-on-year in membership sales. It also extended the initial sales program for a further six months to include cold prospects.

Next Gen has four marketing team members, including two data analysts. The company is using a number of Salesforce Marketing Cloud components: Email Studio, Mobile Studio, Social Studio, Advertising Studio, Web Studio, Automation Studio; and Journey Builder.

Stepping customer communications a notch: Trials campaign

It didn’t take long before Savage decided it was time to step things up a notch. In June, Next Gen launched a campaign around membership trials.

While trials are successful in terms of driving high volumes, they don’t typically generate high conversion rates. The secondary objective was to better utilise the tech capabilities and push out what Next Gen could do not only to communicate to prospects it has already identified, but also obtain new leads.

“We were able to use advertising audiences and upload our joiners’ data from the last six months – so the types of people joining us right now – to create Facebook look-a-like audiences, which gave us about 30,000 to 50,000 new prospects,” Savage said. “This was based on the market size of each of our clubs with geography created through Facebook.”

Using bespoke and integrated landing pages, Next Gen also took advantage of smart lead capture forms, which populated a data extension in real time, triggering a welcome message and lead journey.

Next Gen then used Facebook Carousel ads, plus its ongoing SEM work and EDMs, to target prospects and historic members. It also used Social Studio to push the campaign out to its existing Facebook community.

“We had all the different data sources sitting in the Marketing Cloud, so our analysts ran SQL to consolidate all the data extensions into one, which allowed us to export to the sales team to each club, every two hours, to contact these prospects and follow up,” Savage explained.

The seven-day trial journey featured five interactions over email and mobile, all aimed at driving engagement and awareness of offers, through to conversion. Day one, for example, consisted of an information-based EDM on what triallists could do in Next Gen clubs, while day two saw SMS messages sent presenting free coffee offers for those who visited.

Day four involved a discounted joining offer. On day six, this was reinforced via SMS, using a keyword trigger response linked to the group’s online joining portal with pre-programmed offer. On the last day, a final email thanking participants with a final link to join was sent out.

Next Gen attracted 1472 trial participants during this period, maintaining the same levels as previously. This was a success in itself, Savage said, given trial participants had been declining by an average of 20 to 25 per cent each time.

The real win, however, was conversion. Next Gen chalked up a 17 per cent conversion rate, a 93 per cent increase over previous trials.

“The eye-opening moment was the results we saw on the trial journey,” Savage said. “That was from having a more targeted approach to reach the right people in the first place. Secondly, it came from having a streamlined journey that worked not only for automation, but also saw sales teams working with a sense of urgency for that seven-day period as well.”

There are plenty of other journeys now being supported through martech. These stretch from using active audiences for targeted marketing and segment campaigns to fringe membership categories, on-boarding, low-usage customers, and customer recovery.

Getting customer engagement right

While the platform is driving Next Gen’s customer lifecycle strategy, it’s actually developing the strategy that changed the business and delivered results, Savage said.

“That’s about getting all key stakeholders to look at how we can improve the customer journey,” he said. “You need to strip out everything else and map out what it means to be a member, from the moment you make the first inquiry, through the sale process, onboarding, what it looks like every time you come into the club, how are you engaged with. Then when you’re looking to end your time with us, what’s the cancellation process, how can we try and change their minds, or drive advocacy.

“It’s taking that whole-of-lifecycle view, that in essence is the master journey, then creating individual journeys that contribute towards that. Once you get that mapped, then there’s this great technology and automation that can underpin it.”

Data has proven the hardest part of the work and what’s taken the longest time to get right, and Savage warned the quality of the output is going to be based on the quality of your data.

“We have two data analysts fully engaged in Marketing Cloud and managing the ongoing integration with our proprietary system,” he said. “It’s a case of mapping out in detail what the journey is, but also what are the data requirements at each of those levels, and how is it going to interact. For example, does it need to write back, is it a simple read, and how are people going to progress through the journey?”

Next Gen is tackling more complicated journeys outside the platform, then using its SQL capabilities and FTP to push these back into its marketing systems, ready to go.

“That worked better for us and we could frame the journeys and comms based on data that’s ready to go,” Savage said. “The alternative, and what we aspire, to is APIs, but we have been able to make it work. It’s fairly frequent – we push data every hour or so, so it’s close to real time.”

One journey Savage has trialled through a proof of concept on is not practical with Next Gen’s current set-up, is real-time SMS notifications to members as they enter a club with welcome messages and offers. During trials, the group saw a 25 per cent increase in penetration and overall spend.

Tackling lifecycle metrics

Proving the success of these efforts has been key along the way. As a subscription-based business, Savage said the team has always been aligned against lifetime value of its members. Retention is equally important to Next Gen as sales and there are plenty of journeys and activities being build out to tackle that part of the puzzle.

“We put the sales journey first in place because you can demonstrate acquisition a lot quicker than retention, but over the next six months, we’re expecting to see some percentage movements in our retention, purely based on the journeys we put in place around on-boarding,” Savage said.

“Research indicates that if you’re able to engage a new member more effectively at the beginning, they’re more likely to stay for a longer term. So we’ve built journeys to make sure their attendance record is healthy to start with, and they’re also participating in our induction program.”

Savage also highlighted the importance of customer segmentation attributes and analysis to determine content needs through every stage of the communications journey.

“Because we have done that segmentation journey, we know there are different elements that appeal to different member groups. It’s a case of determining what they are, and turning them into content pieces,” he said.

Longer-term, Savage is looking to use dynamic content to generate relevant information for customers based on their key areas of interests.

“Once you create that content and do that, you get so much closer to creating meaningful, one-to-one communications,” he said.

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