Youfit Health Clubs Uses Data Analytics To Double Online Revenue
A Modern Example Of Leveraging Business Intelligence
Data Analytics assists enterprises that wish to identify key insights about business operations and customer behavior. Thanks to business intelligence solutions, companies are able to be more productive and enhance the user experience. In the case of one health club, data analytics was the centerpiece of its digital transformation.
Achieving E-Commerce-Like Success In The Health Club Business
Youfit Health Clubs has experienced a massive expansion. Over the past five years, the national chain of affordable health and wellness clubs has increased from 40 locations to more than 120. As a result of the rapid growth, Youfit felt that it needed to reevaluate and reprioritize its KPIs.
“We had to take a step back and realize, how do we start investing in marketing and making sure that our dollars are working harder than ever before?” said Youfit Chief Marketing Officer Tom Peterson. “We took the last two years to really dive into a digital transformation.”
One area that Peterson wanted to tackle as part of the digital transformation was to lower customer acquisition costs through online marketing. Unfortunately, the previous version of the website lacked the functionality to be leveraged for a digital marketing campaign.
To remedy the situation, Youfit upgraded its website and developed a new customer acquisition strategy with data analytics at the forefront. The organization implemented a combination of Google Analytics and Google Tag Manager to track the data of its website visitors and to be able to effectively market to those people.
Director of IT Jens Aumueller said that this data analytics strategy allows Youfit to track everything about online customers by segmenting the audience. It can determine the reason behind abandoned shopping carts, find the exact cost per customer, and implement a behavior analysis to track the actions of visitors from each session.
This type of data analytics, which is typically used by leaders in the online retail sector, is seldom used by those in the gym and health club industry for memberships. However, Youfit was able to leverage this technology, more than doubling its online revenue from 11% to nearly 30%. Revenue per customer has also increased by 15%, and the cost per customer acquisition has decreased by $12.
The Technology Behind The Business Growth
Youfit has been able to capitalize on data thanks in part to a thorough technological foundation. The data extracted from Google Analytics and Google Tag Manager is tied to its current membership data that lives in its internal systems. It also gets tied to its property data, which sits in Salesforce CRM.
The data itself gets stored in a combination of on-premises software and the cloud, where some workloads are run through Microsoft Azure. Youfit is also leveraging a data warehouse for storage and analysis. It is also used to cleanse data records that might be inaccurate or corrupt.
“A data warehouse is being used to feed our business intelligence solution,” said Aumueller. “One of the challenges was that we do have a number of external systems in which we rely on, as well as in-house systems. When you have that combination, you're going to have a data that's living in places that may be duplicated or incorrect.”
Following its initial success with data analytics, Youfit developed a long-term road map for digital transformation. It is in the process of developing a new version of its mobile app. The capabilities of the new mobile app will allow Youfit’s trainers to conduct live video chats with gym members. The app will also track its members’ workouts, which gives Youfit more data to analyze and monetize. Future steps in Youfit’s road map include leveraging member data gathered from Internet of Things (IoT) devices via new gym equipment integrated with Apple HealthKit.
The Importance Of Data Analytics
Data analytics is one of the leading components of digital transformation in the enterprise. The McKinsey Global Institute reports that data-driven organizations are 23 times more likely to acquire customers. The strategies used by enterprises for analyzing data include descriptive analytics (using data mining to determine historical insights), predictive analytics (using data models to determine future outcomes), and prescriptive analytics (using algorithms to make recommendations for human action).
An example of prescriptive analytics is an e-commerce recommendation engine used on websites to suggest buying outcomes that increase the likelihood of a customer purchasing an item. It is used predominantly throughout the retail and financial services industries, with Youfit serving as one of the rare examples of a company in the health club sector relying so heavily on it for success.
As more companies realize the potential opportunities with data analytics and invest in analytics solutions, it will be the responsibility of IT to collect, manage, and secure the data.
“Those who have the data have the keys to the kingdom,” said Peterson.