What are our (your) club promotions doing anyway?
Proactive GMs and Sales Managers are full of good ideas to generate leads and increase the footprint they have in their communities – clever price promotions, special seminars and event series, etc. If you’re reading this, you’re probably currently running one of these promotions. And your only measurement for their success is a positive correlation as to whether or not a monthly sales goal is hit.
By that same logic (and, this may be something of a false equivalency given the product’s overall popularity), Starbucks can attribute its success in the Fall/Winter months to the Pumpkin Spice Latte. They throw a decal on their doors, “Pumpkin Spice Latte is back” and watch the money pour in. They’re not taking into account other factors – the weather is getting colder – or the success of other seasonal products – Apple Ciders and Egg Nog Lattes (or whatever). If they’re not looking at the direct relationship between impressions generated by PSL marketing and people coming in the door, they’re falsely attributing the success of a marketing campaign.
Granted, Starbucks knows what they’re doing and they’re marketing budget (especially when designated towards analytics) is bigger than you or I could ever dream in the fitness industry, but you get the idea.
It’s worth having a reasonable grasp on what is working, what isn’t working, and why when considering your short and long-term goals. All promotions will carry with them some sort of value, but if you’re in the business of developing a comprehensive marketing strategy for your health club, it shouldn’t be taken as assumed that a monthly price-driven promotion is the most effective tool at your avail, nor should it be taken as assumed that all promotions work equally. Getting a grasp on this is absolutely critical to short/medium/long-term planning, and taking the guesswork out of things will help you both make more money and spend more time thinking about ways to communicate your clubs’ unique value proposition to potential customers beyond “we’ve got a cuter monthly enrollment fee discount than they do.”
What does that mean for me (you)?
It’s simple – for any promotion, I look at the overall leads generated by the promotion, the sources for each of those leads (measuring the efficacy of each digital marketing channel I’m employing) and the conversion rate (e.g., if the purpose of a campaign is to generate new memberships. Then I measure how many of these leads actually became members), and the conversion rate over time (e.g., how effectively is our overall communications/marketing strategy at nurturing leads from each campaign once they’ve entered our pipeline). These are the same KPIs any Marketing Director should be looking at on an ongoing basis.
The beauty of Inbound marketing, as I employ it, is running everything through Hubspot’s marketing platform, setting up unique landing pages for each promotion and tracking each visit to the websites I manage by the visitors’ IP address, accurately matching it back to my source. I can run the exact same promotion through my social media channels as I will through a PPC campaign and see which is doing better, adjusting my monthly (and annual) budget accordingly. I can tweak the elements of each campaign to adapt to different consumer behaviors (Facebook-sourced leads are higher on the funnel, for example, than ones generated by a PPC campaign, so social media landing pages need as small a barrier as possible to the potential lead). Just because they came from the #internet doesn’t make them equal.
Imagine trying to do that with direct mailers or a television commercial. Be honest with yourself, have you ever been TRULY confident in the manual lead source reporting in your CRM platform you’ve seen from your sales teams? And frankly, ask them if they consider acquiring lead source from the customer as a barrier to the eventual sale.
But I (we) already get monthly ROI reports
I remember when I first started to look at self-reported ROI from our direct marketing vendors, claiming absurd numbers like “2,000% ROI” based on match-back correlations between new signups and addresses that had received mailers. In business school, I was more of an organizational development guy, so looked at this with skepticism but landed with an “I guess, until I know more” – had never really spent much time dealing with marketing analytics. I just figured we were spending too much money on our direct mail program, which ultimately started us towards Inbound marketing anyway.
Once we adopted an Inbound platform though, and I could really start nerding out (technical term) with the data that was pouring in, I saw some real discrepancies between what was being reported to us and what was actually happening. I pushed our DM vendor on the numbers, and proudly got them to admit they couldn’t do better than Lead-Acquisition-Costs nearly 8x higher than the promotions and campaigns I was running through my Inbound platform. And that’s when there were leads coming in the door.
With Inbound marketing, I know where everyone is coming from, in what volume and why, and by paying careful attention and thinking strategically, I know what kind of promotions I should be running and when. It’s a brave new world, ladies and gentlemen.
(As an aside, by only putting my marketing budget into stuff that I can track, not only can I run more effective promotions at a fraction of the cost, but I don’t have a fixed mailer cost every month, freeing up over half my annual budget).