In a previous post, we wrote about how the rise in popularity of messaging apps reflects a shift in consumer expectations that was brought on by the proliferation of digital goods and services. The natural outcome of these higher expectations is that a company’s success is no longer dependent solely on the merits of its product, but rather on the quality of its holistic customer experience. With automation already playing an important role in managing customer relations at scale, artificial intelligence will take things to a whole new level.
What exactly is customer experience?
In the past, most companies focused on simply offering a good product. Marketing was just a means to drive sales, and the moment a customer purchased the product, its job was done. A satisfied customer would probably come back for more, while an unsatisfied customer wouldn’t, meaning that as long as a company offered a quality product to most customers, they had nothing to fear.
Today, however, a single unsatisfied customer can spell disaster for a company. In a world where Yelp reviews last forever and over 50% of shoppers research products online before buying, the old strategies no longer apply. Every customer might be a social media influencer with the power to bring in waves of new opportunities with a positive review or ruin a company’s reputation with a viral post.
Businesses that have adapted to this new reality have started paying attention to their customer relationships extending far beyond the point of sale in both directions. Those relationships encompass the entire timeline of interactions a buyer has with the brand, from the first advertisement they see, to the hundredth time they use the product, and include every call with customer support in between. The total sum of these many touchpoints comprises the “customer experience.”
The most successful companies today maintain active social media accounts across multiple platforms, engage in vast marketing campaigns that deliver different targeted messages to each demographic and customer segment, interact with buyers face-to-face in brick-and-mortar stores and online via e-commerce sites, and operate call centers with virtual armies of customer support agents on the clock 24/7. According to Gartner, 89% of companies compete primarily on the basis of customer experience, meaning that it has supplanted both price and product quality as the primary battleground for consumers’ attention and wallets.
What it means for health clubs
For most of their existence, health clubs and gyms were simply a place to exercise. The benefits of membership included access to the facility and its equipment… and that’s about it. The only deliberate parts of the customer experience were the sales conversation and perhaps a tour of the facility. Nevertheless, the lack of diverse competition meant that the influx of new membership sales could keep the bucket full despite the perpetually gushing leak of cancellations.
Over the last 20 years, the wellness industry has grown explosively, with an estimated global value of $4.2 trillion in 2017. As the world has become more concerned with appearances and more fearful of chronic illnesses, health and fitness have become the fascination of the masses. Exercise is no longer just for athletes and bodybuilders. As the exercise audience has grown, so, too, has the competition among those who offer it. From Crossfit to SoulCycle, from UFC Gym to Equinox, fitness operators that have achieved the most success have done so by offering an experience that is attuned to the expectations of the modern consumer.
When a crossfitter shows up to their box, they’re greeted by name and led by the hand through a new and interesting workout, and then invited to join the WhatsApp group and to come to the barbecue this weekend. If you were to base your opinion on SoulCycle on online reviews, you would be forced to conclude that it’s a modern path to spiritual enlightenment. (Their website proudly declares, “SoulCycle is more than a workout—it’s an experience.”)
There’s a lesson to be learned from these operators: even though they offer niche products to comparatively narrow customer segments, they’re big business because their members pay more and retain for longer. The carefully curated experience is personal, engaging, supportive, and it feels like what they’ve come to expect from business in the 21st Century.
How automation is changing the landscape
Part of the challenge of delivering best-in-class service is that it requires staff members to operate as a well-oiled machine. The right personalities with the proper training and an impressive level of motivation are required. Perhaps most importantly, effective service demands enough manpower to interact with each member consistently, which is why today, VIP experiences like the above are usually relegated to the world of small classes and high price points.
Traditional operators, too, have taken measures to track relationships and improve customer experience, and they’re compensating for their low staff-to-member ratio by incorporating ever-more advanced technology. CRMs and club management software were the first step, followed by automated emails and surveys. In the 2010s, gyms launched their apps to enable seamless class booking, and in the last few years, equipment manufacturers have invested millions to enable automatic workout tracking that syncs with the member’s smartphone. All this innovation is meant to serve one grand purpose: to give each member an experience that is smooth, intuitive, personal, and consistent across hundreds or thousands of different sites.
Most of these solutions are relatively crude: CRMs track little more than demographic information and billing details. Automated emails contain generic messages that are opened by fewer than 1 in 5 members on average. Surveys ask for basic feedback that may never get addressed, apps are usually used only by the members who need to book classes, and workout tracking is still primarily for the fitness enthusiasts who don’t need help anyway. But as technology improves, the fitness industry is gradually catching up, and artificial intelligence, in particular, holds enormous potential for enabling operators to make gold-standard member experiences scalable.
What is artificial intelligence and how will it affect member experience?
Artificial intelligence is a branch of computer science that aims to create smart computer programs. They use algorithms (which are sets of instructions) and data to solve problems that were previously only solvable by human beings. The problem in question here is, “How should I serve the member in front of me to give them the best experience possible, the greatest chance of achieving their goals, and the highest likelihood of coming back for more?”
The answer, of course, is to get to know them as an individual, to make them feel welcome at the club, and to offer them a personalized program for success. The answer is to follow up with them week after week, to be there when they need support and to celebrate their victories with them as they hit milestones. The answer is to create a relationship of guidance, service, and trust that lasts for years and extends far beyond the four walls of the club.
A customer care professional can create that experience for a handful of members—it’s the secret to the success of boutique fitness operators. But only artificial intelligence will be able to do so for thousands or even millions of members coming and going across myriad venues without requiring overstretched staff members to lift a finger. The same technology is what enables Netflix to make personal movie recommendations based on your tastes and allows Google to understand that your search for “Turkey” was about your upcoming vacation destination rather than lean poultry.
The future of member experience
Artificial intelligence is still a long way from being able to match the level of service a human being can offer in terms of depth, breadth, and quality, but we can already see theory becoming reality. At our partner clubs, members who use CoachAi tell us that he motivates them to pursue their goals and offers them a sense of accountability. On average, members who engage with our AI companion visit the club 21% more often and are ⅓ less likely to cancel their membership in the first six months, demonstrating that improving customer experience really does translate to greater engagement, increased retention and higher profitability.
And what about the future? Now that the business case for incorporating artificial intelligence and investing in customer experience has proven itself, more and more operators will start to explore innovative ways to create personal experiences at scale, offering each member precisely the support they need to achieve the goals that brought them there in the first place. We believe in a future where VIP treatment isn’t just for VIPs.
CoachAi uses artificial intelligence and behavioral science to offer members the support they need to achieve their fitness goals. See how 👉