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Health Club Management

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SOFTWARE: Data is the oil of the 21st century. How do you unlock its wealth?

Many operators store a vast amount of data in their systems but never use it. Could they be sitting on a gold mine? Rhianon Howells investigates new developments in data mining that are aimed at unlocking this hidden wealth

By Rhianon Howells | Published in Health Club Management 2016 issue 6
Serco Leisure has saved over £1m a year on its utility bills
Serco Leisure has saved over £1m a year on its utility bills
Data is worthless until it’s extracted, refined and put to use

It was Peter Sondergaard, head of research at Gartner, who famously claimed that data – or, more specifically, information – is the “oil of the 21st century”.

In the health and fitness industry, as in any other, there’s no doubt that data is an invaluable asset, delivering greater business insights. This in turn enables more tailored offerings, better customer service and more effective retention strategies, which ultimately drives revenue and profit. But, like crude oil, data is worthless until it’s extracted, refined and put to use. Information is oil, Sondergaard said, but “analytics is the combustion engine”.

Most operators already collect data on everything from their customers’ preferences and habits to financial measures such as income and costs – but how can they improve their access to and understanding of this information and, more importantly, use it to benefit their business? We look at some key areas.

Retention
Analysing and responding to attrition and retention data is vital to improving performance in these areas. Rhondda Cynon Taf (RCT) County Borough Council, which runs 10 leisure sites, uses Gladstone’s business intelligence tool eyeQ to generate reports in this area, then adjusts its procedures accordingly.

“We made changes to our corporate membership renewal process after an eyeQ report identified a high drop-off in corporate membership numbers at the annual renewal point,” says the council’s business manager John Hancock. “Looking into this, we concluded that the renewal process was too long-winded and formal, and we simplified it accordingly.

“The drop-off of corporate membership renewals at our facility has now more than halved, from 25 per cent to 10 per cent, and length of stay has obviously increased as well.”

Taking this kind of action on the back of a report is risky if you’re not 100 per cent sure of its reliability, however – and before eyeQ, the council didn’t have enough confidence to do this. “Our previous system was more complicated and often led to the same data delivering slightly different results, depending on who ran the report,” says Hancock.

In contrast, eyeQ’s Query Builder means that, as long as you have a reasonable understanding of your database, producing specific data extracts is simple, while the ability to export the data to Excel means the reports can be easily understood. The key, says Hancock, is that “even with different report routes, the end results are the same”.

Cost savings
Data mining can also lead to substantial cost savings. Serco Leisure, which manages 70 facilities, has made annual savings of more than £1m by driving down utilities bills using Legend’s proprietary business intelligence solution.

A key feature of Legend’s solution is its targeting and alerting functionality, which allows operators to set targets within specific sets of data. If these targets are not met at any point, managers receive a real-time alert which enables them to take immediate action. “This allows customers to avoid ‘analysis paralysis’, which is a genuine risk when there’s so much data available in modern leisure management systems,” explains Legend MD Sean Maguire.

In the case of Serco Leisure, the operator set reduction targets for its water, gas and electricity consumption based on the previous year’s results – for example, ‘reduce gas consumption by 5 per cent on a like-for-like basis compared with the same month last year’. If a centre fell behind on a target, managers were alerted to intervene, perhaps by implementing actions that had proved beneficial at other centres. The analysis also enabled the company to pinpoint when the performance of a centre was out of kilter with that of its other centres, which helped to identify specific issues such as a leak, an equipment fault or ineffective insulation.

According to Keith Thomas, MD of Serco Leisure, not only have these savings been significant in themselves, but they have also enabled the company to be more environmentally accountable – “something to which Serco Leisure is 100 per cent dedicated”.

Income management
Another area where data mining can make an impact is income management. Life Leisure, which manages 13 facilities in Stockport, has achieved a 19 per cent rise in direct debit income and a halving of direct debit failures using the financial reporting and forecasting feature within Legend’s business intelligence solution, says the operator’s chief executive Malcolm McPhail.

This is largely thanks to more efficient BACS processing. “Much of the success in fees processing is down to ease of use when doing small but important daily administrative tasks, combined with the accuracy of the data,” says Maguire. “If you can easily run status reports that highlight issues, you can remedy them before submitting a BACS file, resulting in a higher submission rate.”

Meanwhile, in Rhondda Cynon Taf, the council is planning to introduce Gladstone’s Business Process Manager (BPM) module – which streamlines administrative processes – and link it to eyeQ, in order to automate email communication with customers who have unpaid debts or dishonoured bookings. “For example, we might run a report identifying customers with failed direct debit payments,” says Hancock. “This would automate an email via BPM to inform the customer that there’s a debt on their record, and to tell them how to contact us to arrange payment.”

Gladstone also offers a data consultancy service to help eyeQ clients delve deeper into their database, with further implications for income management. Shetland Recreational Trust (SRT), which operates eight sites, used the service to streamline its invoicing procedures by creating an interface between its member management software and external accounting package.

Guy Bickerton, head of Gladstone’s data services, worked with SRT to create an extract file to pull out the relevant data, organise it for compatibility and export it to Excel for uploading into the accounting system. According to clerical assistant Norma Johnson, no longer having to enter this data manually saves one full day a month and also ensures much greater accuracy.

While business intelligence solutions are invaluable, says Bickerton, data consultancy fills the gap when expert input is needed. “In short, if it’s stored in your system, we will be able to extract it, and in the format you require,.” he says.

Sharing the benefits

DataHub, a collaborative project which allows sport and leisure providers to share and align their data, gives operators access to business critical data, not only from their own sites but from across the sector

DataHub was launched in 2014 by software supplier Xn Leisure, operator Places for People, national governing bodies Badminton England and the ASA, and sport intelligence provider 4 Global Consulting, which administers the initiative together with an industry steering group. The project, which is free for operators to join, now has more than 1,200 DataHub Club member sites and tracks over 150 million facility visits.

It also has a number of specialist partners – including Gladstone, Leisure-net Solutions, Right Directions, Big Wave Media, Max Associates, England Squash, Experian, and Sheffield Hallam University’s Sport Industry Research Centre – who support sport and leisure operators to maximise returns from the data via online modules, each providing specialist participation and business intelligence.

These include a Social Value Calculator, delivered by Experian and Sheffield Hallam University, which allows operators to quantify in monetary terms the social value their organisation has generated, as well as benchmarking its impact within the sector. Based on CASE – the DCMS culture and sport evidence programme – the calculator uses data feeds from each facility to profile the customer base for risk. It then equates the physical activity undertaken by each individual with the proven saving to the local community in the key areas of health, community and crime, education and employment, and wellbeing.

Also available to DataHub Club members is Insight, a business analytics solution delivered by Xn Leisure. Operators pay an annual licence fee to access the module, which not only enables them to run time-saving reports on internal membership, finance and occupancy data, but also allows them to benchmark these figures against those of their peers, helping to identify both under-performance and growth opportunities.

www.DataHubClub.com

Serco Leisure uses Legend across its 70 facilities
Serco Leisure uses Legend across its 70 facilities
RCT is automating the process of ensuring users’ payments are up to date
RCT is automating the process of ensuring users’ payments are up to date
There’s been an uplift in corporate membership renewals at RCT centres
There’s been an uplift in corporate membership renewals at RCT centres
http://www.leisureopportunities.com/images/506684_399583.jpg
Data is the oil of the 21st century. How do you unlock its wealth?
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