Your health club is unique. From the classes you offer to the equipment you buy and the way you greet your members - this is your business and it reflects you. But when it comes to measuring marketing success, you can afford to rely on some fairly universal metrics. Here’s eight ways to get you started, from the very simple to the more complex, with specific focus on the health club industry.
Is the phone ringing?
Perhaps the most old-school way of measuring the marketing results of your health club, but still a good measure of success. Put simply, how busy is your switchboard today compared to before you started your marketing activity?
If it’s the same or lower you can assume with some degree of confidence that your marketing activity has either not had the desired impact, or there is a time lag between launching the marketing and seeing results.
Health club marketing scenario: Assume you’ve done a poster campaign for your health club. “Join before May 30th and get 20% off your first three months!” Quite an offer and no doubt enough to tempt a few people.
So, you know what day you put the posters up. Let’s call that ‘campaign launch’ and you also know how many days have passed since, let’s call that ‘campaign duration.’ Now divide the number of phone calls received by the campaign duration to get an average ‘enquiries-per-day’. Is that number higher or lower than the same period prior to campaign launch?
Membership numbers
Another embarrassingly simple way of measuring marketing success. Do you have more members today than you did before you started the marketing activity? If yes, have you controlled for external factors? For example, if it’s the first week of January, you can’t necessarily credit your marketing activity for the uptick. An increase in membership is to be expected.
So to be a bit more scientific, you need to know your average membership figures for the year and compare like-for-like.
Health club marketing scenario: You had 200 members last month. You recently launched an email marketing campaign to recruit new members. You now have 220. That’s a 10% increase in membership. Not bad. But how much did your membership increase by this time last year? Or last month?
The key metric to measure isn’t total membership figures, but the rate of growth. If the email marketing campaign resulted in an increase in membership growth as a percentage, that’s a good win. If your numbers went up in absolute terms, but growth dipped compared to the same period last year or month, your marketing may not be working.
Revenue & Profit
Looking at your balance sheet can be a good indicator of marketing success. But not necessarily how you might think. If revenue is up, that’s a positive sign. If it’s up by a statistically significant amount, that’s great.
But revenue can go up while profit goes down. For example, if it’s up by 100% compared to last month after running a Google advertising campaign, you’ll probably have money in the bank from the sign-up fees alone, not to mention the future membership fees.
But if you spent more on advertising than the new members paid in sign-up fees, revenue may be down. But the campaign may still be worth the money if by the end of the year those new members have paid more in monthly fees than you spent to acquire them.
Revenue and even profit are dangerous metrics to rely on isolation.
Health club marketing scenario: You’ve been open for exactly a year and you’ve invested $5,000 in a Google adwords campaign. You’ve targeted people in your local area with a great ad, and it’s worked.
You had 100 members to start with and you’ve signed up 100 new members. That’s a 100% increase in membership. Over time, those 100 new members could be worth $200,000 per year, but the cost of the ad campaign is larger than the sign-up fees they’ve paid. Revenue is down, but the campaign worked, so profits will be up at the end of the year.
Gym management software stats
Gym management software confers a number of benefits to a health club owner. One of the big ones is the ability to track marketing activity. For example, if you send a promo email to your entire database of members telling them about a great new MMA class you’re launching, you’ll be able to measure a few exciting marketing metrics.
Health club marketing scenario: If you get one response for every three emails sent out, you’ll see that in your stats. A response rate of one in three isn’t bad. However, if those three responses each say “stop spamming me or I’ll cancel my membership”, that’s not good.
But if you get just two responses, but both of them are booking requests, that’s very good.
Engagement rate
So following on from the above example, let’s look at engagement rate in a little more detail. ‘Engagement’ can mean a number of different things. For email, it could mean someone read your email, someone clicked a link in the email to visit your website, or it could mean they forwarded the email to a friend.
The trick to tracking engagement rate is to define what counts as a good engagement.
Health club marketing scenario: You send out an email letting people know you’re launching a referral scheme. If a member gets a friend to sign up, they both get 50% off their dues for the next three months.
Members can refer their friends via a page on the website. They just have to enter their friend’s details into a form, a link to which is in the email. So a useful engagement would be for the member to click the link.
That tells you how well the email part of the campaign has performed. If you get two clicks from every ten emails sent, you can consider your email moderately successful. But what if you get lots of engagements, but no referrals? This brings us to...
Conversion rate
Conversion, like engagement, can refer to a number of things, depending on what you want to happen. In the example above, a good conversion goal would be for the recipient to click the link and fill in the form, entering their friend’s details. So if 20% of email recipients do this, you’re doing well.
Health club marketing scenario: So now you have the makings of a new campaign. You’ve got a list of email addresses for potential new members, supplied by your existing members. It’s time to tweak your metrics. Your new conversion goal should be the member’s friend - the recipient of your email - clicking a link in the email that takes them to the membership sign-up form and filling it in, with payment details.
Channel specific metrics
Now that you’re seeing results from your marketing and understand how to measure success, it’s time to compare channels. In order to do this, you need to understand which metrics are best applied to which channels.
When we say channel, we mean the method by which you communicate with your potential customer. Possible channels may include phone, email, online advertising, posters outside, pre-roll ads on YouTube, the possibilities are expansive.
By metrics, we mean the figures that define success. So for an email marketing campaign, good metrics would be open-rate, engagement rate and conversion rate. For online advertising, it could be impressions (how many people see your ad) click-through rate (how many people click the advert) and conversion rate (how many people who clicked the ad signed up for membership at your gym).
But you can’t measure all channels the same way. There’s no way of measuring how many people see a poster in your gym, so you’ll need to rely on other metrics.
Health club marketing scenario: Let’s say you decide to run a poster campaign and email campaign at the same time. You want to measure the cost of printing and displaying the posters versus the value of new members that sign up as a result. One good way of measuring this is by putting a unique discount code on the poster.
To measure the success of the email campaign, you might take the cost of sending the email (the time it costs to write, design and proofread the email, plus any costs associated with the gym management software you use to send it) and measure that against the value of any new members this email earns you.
But how do you measure the two campaigns against one another?
There’s a metric for that!
Cost per acquisition
Comparing channel specific metrics is a challenge. Is an email being opened worth more or less than someone seeing your poster? There’s a way to find out. Assuming you can track which new members came from a specific channel (easy to do when someone clicks an email and signs up for membership or if they quote a unique code on a poster), you can calculate the value of that acquisition.
Health club marketing scenario: Let’s say you sign up five new members from the poster campaign. And on the cost of designing, printing and displaying the poster you spent just $50. You simply divide the cost of acquiring the customers, by the number of new customers. So in this case $50/5 = $10.
Your cost of acquisition on a poster campaign is $10.
Now let’s look at the value of those customers. Let’s assume membership is $2,000 per year. So for every $10 you’ve spent, you’ll earn $2,000 revenue. You invested $50 in total. That’s a return on investment of 19,900%.
Now you want to compare that to your email campaign. Your email software costs $20 per month, your marketing assistant spent two hours preparing the email and another ten hours monitoring its performance at a rate of $25 per hour. So the cost so far is $20 + ($25x12) = $320.
Your email campaign earns you 50 new customers. So the CPA is 320/$50 = $6.4.
Your cost of acquisition on an email campaign is $6.4 - a 36% CPA reduction on the poster campaign.
Now you know where to invest when setting your gym marketing budget.
