Continuing with our “technology in sport” series, we wanted to share some of our work helping sport or fitness organizations adopt marketing technology solutions.
Today, we bring you some insights from a project in which we helped a leading fitness operator with more than 40 gyms implement a customer geolocation software to enhance their business analytics capabilities.
This enabled them to take their marketing strategy to a whole new level thanks to the ability to tackle several elements of it such as:
Customer segmentation
Geographic expansion opportunities
Competitive analysis
Creation of “look-alike” audiences for future marketing campaigns.
Why should you consider implementing customer geolocation software for your sport or fitness business?
Before going into detail on “how” we did this, it is critical to understand “why” and if this could add value to your organization. At the initial phase of the project, we identified 3 critical reasons:
Firstly, these gyms traditionally depended on generating most of their business from customers that lived within a short distance of the facility. In our case, we had certain hypothesis for each type of gym this business owned:
For small inner city gyms, we believed around 70% of customers usually lived within a 500 meters radius.
For larger multipurpose gyms with parking, the assumed distance was between 2.5 km and 3.5 km.
There were also large gyms without parking space, and in this case, the majority of people were thought to live in a 1.5 - 2 km radius.
One of the goals of the geolocation software was to help us confirm if this was true.
Secondly, these assumptions were made based on previous reports done manually that mapped out customer information for some of the 40+ gyms. In essence, it took us about 4 working days to prepare manual reports for a single gym, so we knew this was going to provide us with great speed and scalability in terms of the number of reports we would be able to prepare, and speed up the development of the marketing strategy for each gym and the decision-making process.
Finally, at the time, this business was at a point of aggressive expansion, both at a national and international level:
The tool would help us analyze our existing customer segments, the demographics of a particular location, the economic profile of a city and project this into a potential new area.
Not only that, it would save the company an immense amount of time and investment in funding trips to investigate a given location.
Finally, these tools usually provide information on where competitors are (type, distance to the location you are studying, number of clubs they have in that given area, etc.), which is always useful when considering new gyms.
Deciding on how the software will add value to your organization
After understanding why we needed this and reaching out to several suppliers, we realized that this software would have three main “use cases:”
The primary purpose was to analyze potential locations for opening new gyms, based on the three guidelines specified above. The software we implemented enabled us to do some cool things that, up to that point, were unimaginable for this business:
Provide high level detail for a particular location in a matter of hours, rather than a full week.
We implemented a feature that enabled the business to compare potential opportunities with the existing network of gyms. This was particularly useful when presenting to the executive committee, as we would tell them: “This location looks like X gym we have in our network,” and they would have a clearer picture in their mind of what we were looking at.
We could also carry out this study the other way around, meaning that we could pick a facility of the network and look for areas in the country or region with similar characteristics.
At the end of the day, the organization was able to save huge amounts of time and money in travelling to a potential location, which was relevant given the fact that usually, most opportunities that were looked at did not meet the full list of requirements in terms of population density, income, employment rates, and other KPIs used to make a final decision.
In addition, the solution would provide the benefit of improving customer segmentation efforts. In particular, the business would be able to map out and visualize:
New customer acquisitions
Members that cancelled their membership.
As we mentioned, obtain a quick snapshot of where customers lived with regards to a given gym.
Finally, the software would help monitor the competition with regards to them opening new gyms that could imply a risk for any of the facilities. This would help them identify with detail exactly which customers lived in areas where a competitor was bound to open. As a result, they could get in touch with them or design customer retention initiatives:
Finally, the software would also help us group gyms into cohorts. In essence, we would be able to distinguish groups of facilities based on the KPIs of our choice and design strategies based on the behavior of each cluster.
Possibilities within your digital campaigns
To finish with this post, we wanted to share 4 examples, although there are many more possibilities, of how geolocation software helped develop much more targeted digital marketing campaigns and improved ROI:
Target existing members by segmenting based on location. For instance, try offering free parking to those customers that live farther away from your facility. Or perhaps look to develop brand partnerships with local businesses in a given area and offer your customer exclusive deals.
Target new audiences using “look-alikes.” If in a certain region your customers are, for example, young males between 15-25 years old, perhaps you can set up your Social Media or Google Ads campaigns to target that same profile in that region, as it seems those types of customers could be more interested in your business.
Along those lines, based on your existing customer base, you can try and target audiences of new markets in new geographic locations.
Finally, you can plan your attack or defense from the competition. Imagine a new competitor is going to open in a given area full of customers as shown in the image above. You can identify those people and design an email marketing campaign with offers to keep them as customers on a long term deal before the competition can even open their facility.
That is all for the moment, we hope you found this post helpful and gave you a glimpse of how geolocation technology can help your sport or fitness business. If so, please do not hesitate to share it with anyone that may be interested. Meanwhile, we will keep updating this “Technology in Sport” series to give an overview of how the industry is evolving and help you prepare for “a future that is already here.”
Meanwhile, keep safe.