What 24 Hour Fitness had to do to create mass personalisation

It’s a conundrum all too many marketers are still facing: How to harness new technologies, tools and data sets at their disposal to better personalise engagement with prospects and customers.

And it’s one US-based mid-tier health club player, 24 Hour Fitness, has been working its way through over the last three years. In 2016, the company was standing on a burning platform: Evolve what it offered members or lose marketshare.

“We were a mid-tier player in the health space in the US and getting beat right off the bat. It forced us to really get into our digital transformation,” VP of marketing, Mike Carney, told CMO in a recent interview at the Adobe Summit in Las Vegas.  

The ambition was set to move from a physical gym brand functionally known for being open 24 hours a day, to a holistic omni-channel fitness brand boasting emotional, personal connections with members, that was differentiated in the market.

“Your fitness journey is something we’re very emotional and passionate about. Our mantra – ongoing daily support across your fitness journey,” Carney said. Hindering these efforts, however, were legacy apps, a mix of disparate platforms and tools, and a brand in disarray.

“We were only touching about 20 per cent of members in a personal way. Only 17 per cent participate in studio classes, plus 3 per cent doing personal training. So 80 per cent walk in with no input from us,” Carney continued. “This created a huge opportunity and conundrum.”  

So 24 Hour Fitness started the journey to mass personalisation. The hitlist included revising the brand vision and strategy, creating a new data structure, selecting strong technology partners, platform development, increasing in-house content production, conducting behavioural research, omni-channel integration and team member integration.

Key pillars to addressing digital personalisation became building out and acting on a holistic customer view, developing engaging content, harnessing big data and machine learning for insight, automating as many processes as possible, and orchestrating omni-channel communications.

Here, we look at the components of 24 hour Fitness’ transformation.

Technology platforms

One of the first steps was building a technology foundation that could support a holistic, omni-channel marketing approach.

Historically, 24 Hour Fitness was running a disparate mix of systems including Adobe, IBM, Microsoft, Netpulse, Salesforce, Agility|Harmony and Hyper. The decision was made to invest in the whole Adobe Experience Cloud suite, with Microsoft Dynamics 365 as its CRM backbone. It also brought mobile app development in-house.

Data structure

The CRM then became the backbone of all 439 club operations across the US. “When you check-in, or say you’re interested in joining – all that data is collected in the CRM,” Carney explained.

“That starts the segmentation process – we ask what you’re interested in, so if you’re not interested in a pool, we’re not going to talk to you about our aqua classes. If you’re interested in strength building, we’re not going to talk about aerobic classes.”

All information is flowing into a data lake, which sits between the CRM and Adobe platforms. “We set up that data governance rule initially so all that first-party data comes in to the lake, all our demographics and psychographic data comes in, and any other useful data criteria. That all then flows into Adobe,” Carney said.

With the IT function largely focused on operations, a decision was made to also hire business specialists in IT and IT consultancy groups to inside the function and drive a lot of data connectivity and governance flow. Supporting these efforts are Microsoft and Adobe as well as select partners.

Personalisation strategy

Geotargeting remains a core element in the customer targeting mix, and Carney said 24 Hour Fitness knew it had to excel at specific zipcode targeting across digital, social, search and TV.

“As long as we’re concentrating our efforts, we can compete,” he said. “That was happening concurrently to the testing, the integration and connectivity work.  

“Once we had Dynamics in, that drove the segmentation schema, based on interests and profile, so we could build a much better profile and truly get to a mass personalisation approach.”   

The benefit of Dynamics is being able rapidly change sales spreadsheet, add fields, and adjust flows. “It’s timely in the ability it delivers,” Carney said. “The integration is much easier with Adobe thanks to the partnership between the two companies, so as we deploy a change, the Adobe side is updated too. It’s dramatically enhanced our sophistication on segments.”  

Personalisation efforts have since moved beyond traditional gender or demographic data sets and are driven by behavioural marketing, website personalisation, digital kiosks, digital fitness programs that are customised, cross-device targeting, club Wi-Fi engagement, social engagement, Studio24 Live on-demand stream, experiential activities, ecommerce.

For example, 24 Hour Fitness moves from initial location-based targeting, to a wealth of drip stream, customer journey-based programs. It’s also bringing segmentation into its media spend, using iterative data insights and testing to better target digital, TV, social and search advertising.

“Before we had that profile data, we didn’t have that practice. Now with Adobe, our communications are wrapped around your interests,” Carney said. “If you’re into our group exercise classes for example, that’s reflected in our messaging and content - we’ll provide bios on our instructors, new content on those classes and more.”  

Content investment

With personalisation comes the investment into content and like many organisations, 24 Hour Fitness has built out an in-house content production team.

“Today we have so much content, and we’ve overlaid the segmentation in our mobile app, and now we have thousands of hours of content on exercising,” Carney said.

“We have lifestyle stories wrapped around pillars of life – rejuvenation, movement, nutrition, mindset. All of a sudden the content has allowed us to broaden the brand. It really is a function of the tools themselves as we were able to deliver that message in a concrete fashion.”

The group also developed a digital magazine, 24Life, a decision that followed its extensive customer research process and need to realise a more emotive, member-led brand.

“It’s given us a chance to create value propositions against each competitor, including the online players. It all came about through the brand restructure, supported by the tool and product themselves. It is all connected,” Carney said.

Nowhere else has content customisation come better to life than in 24 Hour Fitness’ mobile app. Launched less than a year ago, it’s already being used by 1 million of its 4 million members. Again, the app is connected to the group’s Adobe Experience Manager digital content management platform so member experiences are seamless.

“The app is prescriptive – if you say you want to work out from home two days per week, and you login, it’ll build your scheduling against what you’re interested in. If you want to work on arms today and legs tomorrow, it’ll set up the routine, keep track and start to apply it to the content you’re getting. It’s a customised workout,” Carney said.  

“The goal by the end of next year is to have 75-80 per cent of all members on the app and I think we’ll get there.”  

Results

Commercially, one of the big milestones for Carney has been lowering cost per acquisition. “CPA has dropped in excess of 20 points in the last year. Our organic social has skyrocketed with the integration of the tools and products, and it’s all a function of bringing this content, measured with all our other marketing practices, into a more synergistic approach,” he said.

In addition, 24 Hour Fitness has dramatically grown research, brand recognition and Net Promoter Scores. In the case of a decline in female members to competing fitness offers, Carney said it’s also been able to close the gap considerably.

Off the back of the work, 24 hour Fitness in December launched a new brand campaign called ‘Your results. Your way’ focused on the personalisation now available to new members.

Even as he was happy with the results, Carney said the company is only 40 per cent of the way there.

“It’s about stumbling and going for it. We stumbled a number of times and those are great learnings – we are so much better for it and where we were 12 months ago,” Carney concluded. “We’ve made so many mistakes. But we’re proof you can still have that gain and growth.”

• Nadia Cameron travelled to Adobe Summit as a guest of Adobe.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu