Operational Customer Experience Management

6 Things to Know About OCEM Software for Fitness Clubs

The race to deliver a great customer experience is on and you are in it – whether you like it or not. CEM software is the vehicle you will be driving if you are to compete in this race. Your vehicle must be quick out of the gate and ready to go for a long time.

Selecting software for something that is new to you can be confusing and all software has features that may look incredible if you have never seen them before. If the first car you ever saw was a 1958 Ford Edsel, you would still think it was incredible.In this article I hope to accelerate your learning so you may benefit from those that have gone before you. There are hundreds of world-class companies that have learned lessons on your behalf. We want you to take advantage of what we have learned in the last 11 years of being CEM practitioners!

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1. Head Room
The fitness business is more complex than other transaction-focused retail environments. Understanding the fitness business is critical to designing a system that aligns with the member’s journey and will support your own growth and learning. What you understand about Operational Customer Experience Management (OCEM) when you begin will pale in comparison to what you will understand few months and years into your program. Outgrowing the software quickly will be frustrating and will have your team just trying to figure out how to get higher scores instead of how to improve the member experience. That is a bad place to end up.

2. Engaging
If it isn’t easy to use and doesn’t have “slap you in the face” analytics and reporting, it won’t be engaging. When you are trying to “operationalize” your member feedback system, the software better be helpful, effective, and grab the attention of the people that are running at 100 miles per hour every day. Having great mobile apps, crystal clear dashboards and fast workflows is critical.

3. “1st Degree” Accountability
We love Net Promoter Score. We love the alignment it creates in any size company. But in operations it is only provides “3rd Degree” accountability. If I am a front desk staff member and you tell me our NPS is trending downward (or upward for that matter), my feeling of responsibility to that outcome is 3 degrees of separation away. If you tell me our average Staff Friendliness score is trending down I will now be feeling a little more exposed. But tell me that the Front Desk Staff Friendliness score is trending down and NOW I get it. That is “1st Degree” Accountability. You need to capture the member journey in a set of METRICS that can measure the touch points that matter.

4. Dynamic Reporting
The industry tends to think of this as “real time” reporting. And it is. But Dynamic Reporting isn’t only real time; it is instantly informative. I could have real time reporting that shows up as a spreadsheet or a table and give everyone in the huddle or meeting brain damage trying to figure out what thevreport says. When we think of Live Reporting it is real time, instantly informative, useful for decision making at any level of the organization, and an accurate representation of the member experience.

5. Member Segmentation
Segmentation allows you to get a deep understanding of your members’ experience. Being able to segment by age, gender, different experience categories, members that bring guests, members that do not bring guests etc. can create clarity out of chaos. What happens when you can identify hundreds of members at a single location who love the equipment, love the staff, plan on staying a long time, and have had great fitness results? You can specifically target them in a referral campaign. Member segmentation is critical for understanding issues but it is
also an immediate driver of new business.

6. Root Cause Analysis
When you have the tools to get this right, you are able to annihilate an entire species of complaint. We so often see companies not digging deep enough. They keep solving a symptom of a problem over and over and over for individual members. Getting to the root cause of a problem allows you to solve a much bigger problem ONCE and have it affect all members. This is the big lever bar for improving member experience!

When selecting software you need to choose a system that is MORE than you need when you start. You and your team will quickly become more and more sophisticated in your CEM disciplines and that will require your software to accept that growth. Once you have selected your software it is time to develop your rollout strategy. Remember that customer experience management is a marathon not a sprint.

Do you have any comments? Please share with us.

Retention vs. Loyalty

You pride yourself on your club’s service and hospitality. You are much better today than you were yesterday but not nearly as good as you want to be tomorrow.  You work very hard to hire right, treat staff right, treat customers right, and to constantly improve. These efforts seem to be rewarded. The questions is can you still do better?

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Let’s not kid ourselves about “retention.” You can initially retain members through specific tactics; lock people in to long term contracts and make cancellation painful. But these tactics won’t go unpunished. At some point your “customers” will break free and run like exploited hostages; once exploited, people rebel.  Sometimes it’s mild rebellion and other times it is loud and nasty.

Retention is the lagging indicator of customer loyalty; i.e. a result of the love your customers have for your business.

Stop seeking retention, and start seeking loyalty.

What if you measured attrition based on when customers’ hearts left you? Not bodies and wallets. What if you measured how many current and former members still love your business?  In other words, of the people still paying dues, how many do so but don’t really love your business? Of the people that cancelled, how many did so but still love your business?  If the answer to the former is “zero” and the answer to the latter is “all” you would have the highest loyalty possible.  Retention is thought of as people still paying their dues. When they stop, they move to the attrition side of the ledger.  But if you could measure the investment of their heart instead of money, how many members and former members would be on the “loves us” or the “doesn’t love us” sides of the ledger? Your customer retention/attrition metric and P&L are likely not reporting this.

Assume that long-term value was your only objective. Assume the only metric you were going to use to determine long-term value was customer loyalty. Where would you start? How would you determine the things that were causing violence to your loyalty objective?

Here is a simple filter to determine if your operation is creating even minor feelings of exploitation with your customers. Danny Meyer, in his book “Setting the Table,” makes the statement that “hospitality is what happens for you, not to you.” If your focus is on service and hospitality, look at every process and interaction through this lens. Ask yourself if it happens “to” or “for” your customer.  Start with how you answer the phone, transfer a call, check someone in, sell a membership, sell personal training, set appointments, sell a shirt, allow for a guest, cancel a membership, and handle complaints.  Dig into each of these and see if it is happening “to” or “for” your customers.  During the cancellation process have you turned the customer that loved your business into a former customer that now despises your business?

Let’s suppose you’ve looked at every process and are mortified to discover that almost all of these things, by design, are happening “to” the customer. How do you start to turn this ship around?

I can tell you this, not by commanding your staff to be hospitable!  Not by stating a new direction and mandating that everyone attend customer service training.

You start by looking at how you manage and lead your employees. Are their jobs happening “to” or “for” your staff?  Are you trying to be outwardly hospitable with an inwardly hostile culture?  Hospitality and service work when they are an embedded part of your culture. You can’t ask people that do not feel like they are treated well to treat others well.

If long-term value is the wish of the investor/owner, you have one path to follow: Only the right culture can create happy and loyal employees.  Only happy and loyal employees can create happy and loyal customers.  Only customer loyalty can create long-term value. Only long-term value will create a happy owner/investor.

A little forensic work will reveal that bad culture is generally due to authoritarian leadership. The pursuit of the wrong metrics is a wasting your time, your employee’s time, and your resources.

Do you have any comments or thoughts you would like to share? We would love to hear from you!

Simple...not simpler.

We love NPS. It’s simple. We started measuring NPS (Net Promoter Score) right after reading Fred Reichheld’s December 2003 Harvard Business Review article. LOVE NPS!   It is a great “North Star” for getting company-wide focus on the member (customer) experience. It remains one of our company’s four main KPIs. The target for our health clubs is to maintain a Trailing 90 Day NPS > 70.

But we learned quickly that to really enable the management of the member experience we needed to better understand the member experience. The “likelihood to recommend” question was a great start. But it hid many of our company’s shortcomings as it wasn’t an accurate representation of the entire MEMBER JOURNEY. By itself, it didn’t uncover our members’ deeper ideas, concerns and even valuable praise. We also struggled with accountability – How do I, as a front desk team member, ACCOUNT for my impact on our NPS?

When companies deploy an NPS only approach to Operational Customer Experience Management (OCEM), we see it result in a series of tactics to find “Detractors” and to mitigate their risk of cancelling. This tactical approach to OCEM returns only a fraction of the value one should be leveraging when going through the trouble of collecting member feedback. It also does not reveal the issues (sometimes major issues) your Promoters have with your company.

The first rule of OCEM is to really see yourself as the member sees you. You need metrics that you can track to their entire journey and once they give you that quantitative feedback, they are now primed to give you richer qualitative feedback.

For example, while I am writing this I reviewed feedback from a “Promoter”. This person gave a 10 on Likelihood to Recommend (LTR). They gave their reason as “Great club! Super clean.”Okay, if those are the only questions I allowed her to answer then our job with her is done! But read on. Once this SAME MEMBER had a chance to reflect on (and score) her whole journey, she added the following: “I have had 3 trainers. One left after 2 sessions, the next one was fired after we trained for several months and the third was promoted to another club within one month of us training, Very discouraging. No continuity. Why would I buy another series?” THAT is the information I needed.  Buried in her journey was a major issue. Now, instead of the false pat-on-the-back we would have given ourselves, we have uncovered an issue. In fact this may not be a small issue. Conducting root cause on this might reveal a HUGE opportunity to improve the experience for all of the personal training clients.  But if you are only asking the LTR question and “what was your reason?” you are not getting the value you need.

But we are still talking about tactics. What about your strategy? In order for you to be successful with your strategy, do you need to have a customer service oriented culture? Chances are, if you are in the fitness business the answer is “yes.”

The challenge with an NPS only program is that is very hard to move your customer-centric plans from being just ink on paper to the blood in the veins of your entire team. Getting the feedback to align with the member journey so that every team member takes ownership of the customer experience is how to make that happen.

Enter the science of great technology, survey design and a systematic approach for closing-the-loop, fixing individual issues, performing root-cause analysis and building culture.

The member experience is a complex thing to understand. It should not be treated as a transaction. When done right this complexity can be presented in simple and beautiful ways that engage your entire company. I started with Einstein and will finish with Oliver Wendell Holmes – “I wouldn’t give a fig for simplicity on this side of complexity. But I would give my right arm for simplicity on the other side of complexity.”