How Inverclyde Leisure has driven business transformation, cut costs and grown revenues

Turning a business around need not be a complicated process nor depend upon significant resources. One leisure operator in Scotland has demonstrated this over the last two years with an impressive performance, resulting in a reduction in overall costs and a step increase in revenues. An ageing leisure centre due to be closed has been rescued and the leisure trust continues to grow revenues in spite of the economic climate.

Business Analysis
When Inverclyde Leisure appointed Kieron Vango as chief executive in mid-2013, the trust operated 13 facilities including five gyms, two pools, three outdoor pitches, three sports centres and one large leisure centre which also has an ice rink. The facilities and service offering were on a par with other public sector facilities in Scotland. Some failing centres were due to be closed. The trust was under pressure to improve its financial performance.

“We needed to really take stock and reassess our entire proposition,” Vango explains. “We started with a straightforward business review.

“The analysis was very interesting. It was clear we had to rethink our service offering. We needed to put the customer experience at the heart of our plans. It was evident we could improve membership and that there was room for revenue growth in other areas such as swimming and skating lessons. It was also apparent we could implement sensible cost savings in IT. Most glaring was the lack of good information to run the business with. The conclusion was we needed a solid technology platform to take the business forward.”

Technology Migration
The Inverclyde Leisure team therefore developed a three-year business transformation plan, which included the following main deliverables:
• Invest in a new front of house software platform for its sites
• Move from the council’s infrastructure to a new IT platform and networks
• Introduce a new, tiered membership structure to respond to local needs and ultimately improve membership revenue
• Implement a much more modern telephony solution
• Implement a wider range of swimming lessons and other courses to grow courses revenue
• Shift customers to self-service and smartphone bookings instead of them queuing at reception
• Introduce a budget offering for struggling facilities
• Invest in a refurbishment programme and new gym equipment to underpin the new approach

“Legend won the tender for the new front of house platform. This was installed smoothly and the project completed by March 2014,” explains Vango. “In fact, we made such good progress we decided to accelerate phase 2. In January 2015 we tendered for a new IT platform, new networks and new telephony.

"Again, Legend’s overall proposition for a one-stop solution was very compelling and economical – Legend could offer a solution with one 24x7 support desk for all of our IT services.”

By April 2015, Inverclyde Leisure had a new IP Telephony solution installed across all 13 sites, new networks and had decided to migrate to the cloud and run Office 365. Vango says: “Not only did the whole migration go smoothly, but it resulted in substantial cost savings. We now have a modern, more reliable service at less than half the previous cost.”

“Inverclyde Leisure has become a rapid adopter,” explains Sean Maguire, Legend's managing director. “It’s a compliment to an organisation’s leadership team when it can embrace new systems and make wide use of the tools at its disposal. For example, the Inverclyde Leisure team has employed our ticketing solution, our LegendFM tablet, our BACS Bureau services and our KPI Targeting and Monitoring reporting. They have exploited our powerful sports courses and poolside swimming lessons module to grow swimming lessons and even introduced ice skating lessons.”

Business Enhancements
In parallel with the implementation of its new IT platform, the trust diversified its product offering, starting with the introduction of tiered membership packages: a budget offering ‘IL Fitness for Less’ was introduced at two centres to increase base level engagement; a middle, all-inclusive offering which offered access to all the trust’s centres and moved customers from PAYG to a monthly direct debit payment scheme; and a premium membership which offered additional elements such as taster personal training sessions.

“The combined effect of the budget price point, three-tiered membership including a ‘premium’ offering, and the use of Join Online on the web and smartphone, was felt almost immediately,” says Vango.

“Between April 2014 and March 2016 Inverclyde Leisure has seen a 34 per cent like-for-like direct debit income increase, equating to nearly £600,000 per annum.”

In addition, the trust has driven significant revenue increases through an expansion of its sports courses, particularly swimming. “In the last two years, income from swimming lessons has become our second largest revenue stream,” Vango says.

“It’s been helped by the way in which our teachers can interact with students and parents through Legend, which has also automated what was historically the hugely stressful element of re-enrolment and course bookings. Over the last year, the swim school has grown by 45 per cent.”

Inverclyde Leisure is now rolling the Sports Courses software out to additional course programmes, including activities such as ice skating and gymnastics.

The final element of the services transformation was around giving customers more control over the way in which they could engage with the trust, and implemented Legend’s BACS Bureau services as part of a fully outsourced membership management service.

Vango says: “Our aim was to allow customers to better manage their membership online, giving staff more time to focus on customer care. We wanted to reduce the volume of general enquiries, and serve more customers online. The Legend Direct Debit service saves time and money and runs like an internal department. Our average collection rate is now 98.7 per cent versus 96.3 per cent in 2014.”

Supporting customers
Two years into its business transformation programme, Inverclyde Leisure has seen just that: a truly transformed and successful leisure organisation.

With Legend’s reporting capability and the use of the KPI functions, the Inverclyde Leisure team now also has real time information and business intelligence at its fingertips. Vango explains: “We knew we could operate more effectively as a business. But now we can easily measure it and we can use the data to drive action. Legend has given us a clear, dashboard-style presentation of our progress against KPIs on all aspects of the business and has allowed us to make really meaningful benchmarking comparisons.

“It’s an astonishing story. Whereas 24 months ago we had zero online bookings, today over 60 per cent of bookings are done online. Before the recent re-opening of the struggling Ravenscraig facility, we saw 700 online joiners within six weeks.

"And we feel there is still substantial growth to come. I am hugely proud of what we have achieved."