I am always astounded when I hear about the amount of money clubs spend on sales and marketing as a percentage of revenue compared to what clubs spend on management systems and tools that actually help to keep those hard earned dollars from walking out the door a few months later.
Now, many of you reading this blog post will simply stop at this point believing that another club management software vendor is trying to justify some new technology solution for retention. Believe me when I say … that’s the furthest thing from my mind!
In fact, the purpose of this post is to ask you a question I recently heard asked by Dr. Paul Bedford who runs Retention Guru.
Paul was attending the Motionsoft Technology Summit and presenting his North American Retention Study. It was clear that most people in the room were interested in tools, tips and strategies to reduce membership attrition. Before Paul started his presentation, he polled the audience. He asked, “How many club executives have people in your business’ focused on getting new members?”
Everyone raised his or her hands. No surprise.
Paul then asked, “How many club executives have people in their business’ focused on selling PT or other services?”
Again everyone conceded they did.
His final question, “How many club executives have dedicated people using customer relationship management (CRM) solutions to ensure that your members’ experience is meeting or exceeding their expectations?”
CRICKETS…No one raised their hand. Unfortunately, I believe I know why.
The acronym CRM is usually misused and misrepresented in our industry. When it comes to defining CRM’s in the fitness industry, many of us incorrectly assume that CRM is tool that just allows sales people to get more sales and engage more effectively with prospects.
There is a term that defines that specific business activity and its called sales force automation (SFA). Its not the definition hospitality and or retail industries use when they talk about managing customer relationships.
Take a look at how Marriot’s Mike Keppler, senior vice president of sales, marketing and revenue management systems frames CRM as “the goal of providing sales and marketing employees with a “working memory” of the customer.” Marriot’s working memory of the customer started by defining the experience Marriot wanted to provide to customers across all Marriott regions, brands and franchises.
Before clubs can successfully leverage their own “working memory” of members while managing the experience a club wants to provide, we are going to need to address the challenge of getting everyone on the same page in terms of how we as an industry define CRM.
CRM has little to do with selling memberships. In fact, in the grand scheme of things the prospect stage of your member lifecycle is the shortest phase of the longer-term business relationship you’ll have with your customers.
How should we define CRM?
One commonly referenced definition of the term comes from TechTarget:
“Customer relationship management (CRM) is a term that refers to practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention and driving sales growth. CRM systems are designed to compile information on customers across different channels — or points of contact between the customer and the company — which could include the company’s website, telephone, live chat, direct mail, marketing materials and social media. CRM systems can also give customer-facing staff detailed information on customers’ personal information, purchase history, buying preferences and concerns.”
As a first step, I believe we — as an industry — need to educate our peers about what CRM actually is and, isn’t. Publishers like Athletic Business, Club Industry, Club Insider, iClubs and our trade industry association IHRSA are logical players to drive wide-scale education and awareness initiatives.
Now back to the Summit and Paul’s presentation.
As Paul stared across the room with his devilish smile, it occurred to me, and I am sure to almost everyone reading this post, that it’s time for gyms to begin using CRM-like solution to manage their member experiences so that clubs can deepen their member relationships and to continue to exceed their club experience expectations.
So let me ask you a question, “How many club executives will have people in their business’ by IHRSA 2017 dedicated to ensuring that your members’ experience is meeting or exceeding their expectations?”
Do you hear crickets?
How should your club get started?
Keep an eye out for Club Business International ‘s (CBI) June magazine issue. It will include a product showcase on customer relationship management vendors and services. Oh, and, for the record, Motionsoft isn’t part of that showcase. We integrate CRM solutions via our API into our club management software offerings but we’re not a true CRM provider. We’re an ERP.