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Ian Mullane Talks About The New Rules of Engagement for the Fitness Industry

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We are joined by Ian Mullane, the CEO of Keepme, an AI-based revenue acceleration CRM for fitness operators. He is also the author of The Fitness Future: Rules of Engagement, a white paper on the future of the fitness industry.

Read his white paper here.

Connect with Ian here.

In this episode Ian discusses some key points from his whitepaper and explains how data-driven personalization can increase retention, the importance of consistency in the member journey and how fitness operators should engage with big tech companies entering the market.

Episode Link

This episode of The Fitness Founders Podcast can be found on Spotify, Apple Podcasts, and anywhere you get your podcasts.

Transcript

Kevin: How is it going everyone? Welcome to the Fitness Founders Podcast. I’m Kevin Mannion, VP Marketing here at Glofox. This week we talk with Ian Mullane, the CEO of Keepme, a leading retention and marketing platform for gyms and studios. In this episode, Ian talks about how data-driven personalization can increase retention, the importance of consistency in the member journey, and how fitness operators should engage with the big tech companies as they enter the market. Let’s have a listen. 

Ian Mullane, welcome to the show.

Ian: Great, thanks for having me.

Kevin: Thanks for coming on and great to have you on. I know you’re very passionate around the topic we’re going to talk about today is digital transformation in the fitness industry. I know you’re very passionate about that and how the background both as an entrepreneur and also as an operator, so we’re really looking forward to talking to you today.

Ian: Great.

Kevin: Okay. Well, I think to get started, maybe tell everyone a little bit about yourself. 

Ian: Okay. From an academic perspective, I am an economist, but my careers started off in banking. I spent just over 15 years in Fintech based all over the world – London, New York, France, and then Singapore for a very large stretch where I ended as the Chief Operating Officer of  Sungard which is one of the largest and fastest software providers. Now, it was there, I was in Singapore where I actually got introduce to the fitness business and it’s a long story. But to give you an idea of how it happened quite frankly could not find the facility that could service what I needed in both location and time; and therefore, what I have decided to do is open one. It wasn’t intended to be commercial, but a fact that it was a small facility that had biometric entry, so that myself and my friends could arrive at any time. And you can plug in what was then your iPod, right, which was 2007 and take over the music and do whatever you want to do in there. That business group, it grew exponentially over the years and it’s ended… I sold it in 2019 where it was a 10,000 sq. ft. facility in the CBD district to Singapore. It was during that time or coming up to the end of it where having moved back to the UK, my involvement in the business on the day to day was logically not massive. But my background in Fintech, I have an interest in predictive analytics and the utilization things like artificial intelligence and those things. So just simple hypothesis, could we take the data that existed within the studio and use it to drive some insights that could help us retain members, and they [unclear] It’s over the next 12 months started to develop into an idea wherein we started to understand to what degree, and this is a challenge for many, many businesses and that’s how Keepme was born.

Kevin: Cool. Very good. Do you miss running the fitness business? 

Ian: I think to be fair, I could overstate my involvement quite considerably. I think after the initial 6-8 weeks in the early days of being involved with the business on the day to day basis after I left my career in Fintech, I brought in a team which I’m pleased to say is with me to this day. In fact, Michelle Thavasi, who ran the business for eventually every one of those years is now the CFO of Keepme, and Olivia Milne who is the Marketing Head is actually overlooking after the AP business these days. The team and the expertise still exist. Did I miss it? You know, you certainly enjoy the industry. It’s a challenging industry, and particularly in Singapore, the cost only every go wrong place in Singapore [unclear] And that means you constantly got that monkey on your back, you constantly looking to do better, how can you sell more, how can you keep more members, how can you evolve your products, and get more and more competitive as well. But, yes, it was… Let’s put it in this way. It’s giving me the opportunity that is Keepme so I’m going to be forever grateful that I took that opportunity to build the property in the first. 

Kevin: Exciting. Okay, that makes a lot of sense. I know you’re very passionate around the impact that technology can have on the industry. Probably one of the biggest drivers of that is how consumers are changing. Maybe give us some insights into how you think the fitness consumer has changed in the past 12 months.

Ian: Well, I think and that first of all, if we’re going to say in 12 months, I think that what we’ve got in the last 12 months is just a rapid acceleration of forces that already in play prior to that. I think fitness consumers have been evolving because they’re a bit more informed. You know, clubs themselves where often they’re solo engagement… But they become more available or more aware of the opportunities available to them than have more variety delivered to them through aggregators. They got digital delivery now for workouts at any time with a great deal of variety. There’s definitely an increase awareness on the wellness journey that both nutrition, sleep, and mindfulness play on that as well. And then they’ve also got the tools to measure progress. I mean, anyone look in their Apple Health recently to see the amount of data, or in your Google Fit that’s actually collated by your phone relative to the biometric on yourself. Consumers no longer looking to their clubs to be the temple of wellness. It’s much more multifaceted than that. And as I said, these factors were already present, COVID just accelerated them at what speed and turned the consumer into a more informed consumer, and potentially a more demanding one as well. 

Kevin: When you say that clubs are no longer the temple of well-being, what do you mean by that?

Ian: Well, that’s not a direct reference to the digital workouts than may well be doing now via their apps. It’s a case that their understanding of wellness is now to stage where people don’t believe that’s a constitute just going to the gym 3x a week for 45-minute workouts. They understand that that has a lot more to do with overall activity levels, nutrition, hydration, their sleep, mindfulness, mental health, alcohol consumption. There’s a whole element of that. Now, you could argue all of that was always aware but consumers now have the capacity to capture that and then see directly the response its having. We still, and I should premise, I never in any stage suggesting that bricks and mortar traditional operators or anything else bottom are continue to be a very important part of the overall ecosystem. But a consumer no longer classes wellness as 3 trips a week to the gym. They view that as being a much more comprehensive aspect of which many participants are playing a part and therefore many participants are competing for their fitness goal. 

Kevin: Yup. Okay. I think I understand that and it make sense. I think it’s always good to look at the world from their shoes of your customer and see how they’re perceiving you is a good way to I suppose develop strategies for your own business. 

Ian: Absolutely. Absolutely correct. 

Kevin: I was reading one of your recent whitepapers that you’ve put out, and you talk about this kind of rush to delivery of digital content as being a knee-jerk reaction or that some operators are maybe rushing into this without fully thinking it through. What are your thoughts on that?

Ian: Well, I think that one of the points to make around that that was a totally understandable strategy or tactic to put in place when lockdown first came to play. However, to be able to consistently deliver a product of quality that is going to engage the member, taking into account that their member has the option to acquire that same content or different content from a whole bunch of providers. Can my local studio compete with Peloton, Fitness+, Les Mills on demand, or any of these professional offerings? Are we aware that Peloton, as a prime example, we may know it’s the provider of the hyper-expensive bikes but their offering is much more driven through their app-based digital platform. That platform as a whole has a broad range from mindfulness, to yoga, to strength and conditioning, to a whole list of other aspects. I think as importantly to give consideration their they see themselves as a media production company. They spend over 100,000,000 on this. They’ve got talent management. They’ve got music, challenges. There’s a whole bunch of variables which produced that content. 

Now, I in my local studio decide that I want to provide increase engagement from my members during lockdown? Absolutely. Go out there. Do it anyway you can and keep that connection with your members. But as a long-term strategy, do I really want to be getting involved in digital delivery of content, content calendars, staff managements, consistency, quality, building studio. The other aspect of it is to get consideration here is the fact that when we do come out, when this world does stop to look a little bit normal, the priority will be about shoring up our existing business. We don’t need operators having new distractions putting in place. There are certain aspects that could be dealing with, but certainly trying to consistently deliver that; no partnership has to be the way, unless you got an incredibly strong brand or very deep pocket. Because both of them are going to be required to be able to make money or consistently deliver a solid product.

Kevin: Okay. I think what you’re saying or maybe tell us a little bit more around what you think assuming you are in the majority that doesn’t have those really deep pockets or massive brand. What is the right path to those businesses?

Ian: Well, coming out of this particular situation, most organizations are going to have to take a very good and strong look at how the balance sheet condition is and how that is going to bear up to the activities that they can actually do. I think that the reality is that most organizations are going to find their selves on a runway, and that runway is going to be very close to how many members have I got when I come back divided by what my cost are. That just the real reality. There’s going to be casualties in 2021. It’s not going to be pretty. We’re going to see some very big names as well as some mediums, and smalls bite the dust. That’s just the reality of what is going on. Doesn’t necessarily mean by product by the way, it’s just means that timing as well. That is the… I think what we are seeing in the marketplace is consumers have changed their requirements, and as an operator, now is the time to start aligning ourselves with those expectations. We no longer as consumers… We have the capacity to have our music to chosen for us or purchase as advised. We’ve got the capacity to understand what the next best movie would be for us to actually watch during that period. All of those things are the type of personalization that is expected on by a consumer. 

Now, let’s take as an example, my personal training scenario. I go into a club currently. What would be the contract between myself and the personal trainer is that I will turn 45 minutes, and they will do their very best to work me as hard as they can without me getting bored or being repeated. Now, the reality of that situation is that I am going to attend those sessions on a regular basis in very different conditions. And those conditions are going to be related to the strain I’ve had during the week, my sleep, my nutrition, my travel, whatever else it may be. If I could turn up and I said, I turn up and the first thing you said, “You’re pushing that a little bit hard this week, right. We’re going to take a little bit easy. We’re going to concentrate on recovery. You got a session booked on Friday. Let’s move that to Thursday. We’re not going to push as hard today but I guarantee you on Thursday we’re going to push hard.” That’s a fundamental difference in the relationship between me and my studio. And in turn, what that means is that trust. It’s no longer a case of I’m just paying for someone to push me. I’m actually paying for someone to coach me. I’m paying for someone to have it. Now, you could argue or you could suggest, “Okay, that seems like a big app. How can we do this?” Well, the reality is now that every single one of us carries around in our phone more biometric data and physiologically data than a sport scientist would have managing a premiere league football team 5 years ago. And it’s just access to that very bare bones that could give me the ability to customize the experience to my member that is going to build up that trust, increase the value of the membership to them, and hopefully the longevity as well.

Kevin: I think that make sense. I think what we’re maybe saying in some more years that rather than becoming media production companies maybe bricks and mortar clubs and businesses need to think around how they improve what they are doing on premise and how they use technology to do that.

Ian: That’s a very good summary of it. What we’re saying effectively is that if you’re a bricks and mortar operator that wants to trade off no more than a large physical space in a convenient location with lots of equipment that clients have at home, you’re not going to last for a very long time in this evolving marketplace. You need to be able to establish higher levels of engagement with your membership because your members are now gaining higher levels of membership with even their digital providers. If I train with Fitness+ or if I train with Peloton, the level of customization, the level of engagement that I will get will be higher than I’m going to get from a bricks and mortar institution 9/10. Yes, that’s technology, and yes, that’s data science or all of those things. But the reality is that the consumer doesn’t care. The consumer is only going to look at the experience and how they feel from that and the result of. Even if you look at Apple, you have the Fitness+ product. We can look at that, we can see the variety, we can see the quality, and we can see those aspects. What fundamentally what interest me on that is the ability to customize based on the metrics and the natural connection between the Apple Watch and the actual product itself. Now, if I go down to my local gym, how does that work? Where is the customization in them? IPT was probability, but beyond that, personalization is if I’m fortunate to be in small enough club that maybe the receptionist knows my name as I walk in through the door, right. And I’m sure, you know, there’s always a hard core as being an operator, so I know there’s also a hard core of membership which everybody knows because they’re always there. They are always doing it, right. They’re not the members you need to worry about in retention. Retention is going to come from the individuals the other 80% of members, right. And they’re the ones where if we could change our relationship with them, we change the probability. 

Kevin: If it’s true, say, Apple and Peloton know a lot more about the consumer than, like you’re saying, the bricks and mortar gym or studio. How does the bricks and mortar gym or studio level up? What are some practical things they can use to start personalizing that experience?

Ian: Well, logically the company that I found and represent would be an obvious start. Well, I’m not going to go down that route because that’s a little advert. What I’m going to suggest though to a higher level is that in each one of these organizations, they have a level of data which is capable of producing higher levels of engagement. I still feel and it may not be a view shared by yourselves in you guys at Glofox, but I still feel as an industry, the willingness to adopt technology is on a necessity basis only. If we don’t do it right then we can’t operate the business. And then the secondary motivation is if we don’t do it, the members will ask why they can get it down the road. The proactive stance, and do remember the competitive market is being shaped by technology first providers, the competitive stance would be how can I look for a competitive edge by utilizing technology that would allow me to customize at scale the member experience. How could I have more rabid fans about my physical product through the utilization of personalization. Technology exist now for us to be able to do just that, whether it be through automation, marketing automation or the utilization of machine learning and AI which may feel long way off to fitness organizations. But I could name you 38 that deployed AI, and I’m not talking about my customers perse, 38 organizations in Europe alone last year that deployed artificial intelligence and machine learning. I’m not just talking about pure or basic, a whole host of other organizations does doing it off the shelf, bringing in their data, and then finding insights which is allowing them to improve their engagements. 

Kevin: Okay, yeah. What do you think is the best way for a smaller business to start to dip their toe in the water on this front?

Ian: I think the first thing that they should look to do is to identify aspects of the member journey which they believe to be essential of which there’s much dogma and guidance out there and what that may will be, and they look to how that they consistently deliver it probably through technology. Now, I’ll give you the… I’m a firm believer that, no, I’m not a firm believer. I think that it utterly clear there is no silver bullet for retention. Retention, solid retention, low attrition clubs come from consistently taking the right actions day in and day out no matter how small they are. Strong products, strong people, etcetera. But making sure everyone gets the welcome email. Making sure that birthday greetings are pass. Making sure that nonattendance messaging is dealt with. Making sure that’s everybody is getting the engagement relatively to offer letters. Making sure that there’s timely delivery of offers around whether it be [unclear] These types of aspects, right, are consistent enough. 

I’ve sat down maybe with 200 organizations since 2019… and even more. And many, many times, when the conversation comes up, there is a broad assumption at the CEO, President, Owner or a Proprietor level that this happens day in day out. And the reality is it doesn’t, it may do in intent and it probably was part of the process map but the reality is that we send out a welcome email and we’ve had 330 subscribes or we had 18 non-deliveries, so then how do we get the MailChimp data? So move back into the provider system so that we’ve got all of these aspects. What we need to do is to make sure that we understand the areas where we could automate. Because when we automate clubs are definitely going to need to do more with less resources in the next 12 months. But more importantly, when we automate tasks which can be automated we free up time for more one to one human engagement with the membership which is exactly where the value should be in our human resources within our organization not chasing down exceptions on mailing list and working out how to get .csv files into the platform so they can update schedules and those types of aspects. Technology exist out there. You’re going to look our organizations to see how we can operationally improve operation skills. It’s through that which I think you’re going to get the best. 

Kevin: Okay. It sounds like even though the technology is going to get more sophisticated and probably a little bit more complicated and complex to understand to a certain degree. The challenge remains the same which is defining the experience that you want your members to have and making sure that it happens. 

Ian: Correct. But I will start with looking at the existing processes which are in place and understanding how to get them automated. In the initial three months of engagement where we have with our customers we generally find that the improvements that they have have not been utilization of the insights to keep [unclear] But what they’ve thought was happening is actually happening consistently at the right time with the right engagement. And it’s in those aspects which are driving improvements. This is not I’ve got retention; I’m retaining 65% of my members a year increased it to 85%. This is at 65%, to 67%, to 68%, to 69%, to 70%, right. You’ve got to play the long game. A flywheel is as we retain more, we get more referrals. If we get more referrals, we retain more. It’s this type of flywheel. It’s about repetitive actions day in and day out. Automation is the way to get that done. Forget ML AI, forget machine learning or AI. 

Kevin: You’re saying that what you’ve find when you say get into the weeds with certain clubs or studios that the thing that helps them really improve their retention numbers is constant getting the steps consistently completed. 

Ian: Yes. It is. I’ve been very open in the fact that we have a number of customers who have projected incredibly large improvements in their number. I’ve been very clear that I honestly believe this is a halo effect because for the first time there is an actual focus on the challenge and there’s a confidence, there’s a technology solution which is helping them to frame the challenge and then execute simply without them having to use a multitude of different things to achieve that. Simplification is always going to be beneficial to a business no matter how big or small you are. If you can get a [unclear] It’s one of the reasons why both of us benefits in this industry because it’s one the deliverables that our tools provide. In this context, having the capacity to ensure that the right thing happens at the right time for the right member and the right form consistently takes away an awful lot of error that is historically has been happening are not being done and that has produces results.

Kevin: Okay. That makes a lot of sense. The takeaway for me outside of all the technology is that, like you said, making those simple steps happen for everybody in your customer base at the right time is the thing that’s actually not happening in a lot of business right now. 

Ian: Yeah. I’ve seen a lot of member journeys, they look fantastic. I’ve never seen a member journey which has been regularly executed on consistently. 

Kevin: Okay. That’s such a really good food for thought. I think it’s a good takeaway for anyone listening. Okay, so one of the things we spoke about before we started was how you’re foreseeing a step change or step increase in the addressable market for gyms. I think it’s good news for all of us. But tell us a little bit of the thinking behind that. 

Ian: Okay. I think there’s been a lot of focus on the arrival of digital electric. The competitive threat that they may present to bricks and mortar. I keep my eyes on market size for a long time. Indeed, obviously when launching the business, it was one of the key areas we wanted to understand before we actually engage back in 2018 and 2019. What was apparent to me was the penetration in the advanced markets – North America, or Europe, Australia, and New Zealand. The ones which have been the mature markets has been plateauing for a considerable period of time now, so there’s been no great growth. My belief is that when you bring to the marketplace brands such as Google, the Fitbit acquisition, Apple with their Fitness+, Peloton, etc. Here we got Tonal, Mirror and a whole list of others. We are introducing to a much wider marketplace the joys of the actual business itself and we are introducing the actual fitness aspect to a whole new audience. I mean, Apple has over 1 billion customers. Each one of those customers is currently being exposed or has the possibility of being exposed to their Fitness+ product. That Fitness+ product will be the gateway for a great variety of people who will then look to capitalize or maybe the getting over the initial confidence aspect of going to the gym, going to a facility which has enhanced equipments, enhanced resources, or a community which they now feel part of.  I’ve said previously that there’s going to be consolidation, there’s going to be some casualty this year. But for those that have solid products, those that continue to execute, I believe that there is going to be a larger market opportunity. I don’t think is a zero sum game. I don’t think that people who take Fitness+ or people who have a Peloton will necessarily choose to not have a bricks and mortar relationship. I have a bricks and mortar relationship. I actually have my Fitness+. I have a Peloton. But the reality is whilst I may not be the average consumer I can assure you that there is no consumer who’s now say, “I’m don’t need to go the gym again because I’ve now got Fitness+ on my phone.” That’s not going to be a long term factor. There’s going to be more people now exposed to the benefits. COVID has probably taught people the importance of it, right, so it’s going to be an accelerant there. We are going to see those people present themselves maybe not in a short term but over the 6, 9, 12, 24 months’ period I believe we’ll see an increase in penetration each one of the mature markets that we currently have.  

Kevin: It’s definitely a positive one and hopefully be very interesting to see how that plays. How do you think gyms and studios can convert these people? They’ve got a little bit more awareness now because they have started to adopt this digital fitness. How can you convince them to like the next step this new audience? 

Ian: Well, I think when you get access to the next step you need to understand that they come to you with an understanding around heart rate measurement, with an understanding around activity levels, and they’ve got an expectation their relationship with the provider will be personalized to a degree that I’m not going to end up in a high intensity class when it’s clear that I don’t have the capacity to do so because that was never going to happen in my integration I have or my engagements I have with my digital provider. 

MyZone has been the forefront in this particular area for a long time about integrating that type of aspect into. An increasing quantity of us are wearing devices in our wrist which are storing the type of information that is openly accessible if given permission to. For those that then point to even the Apple Watch for instance being at €400 extravagance, or [unclear] in the recent Consumer Electronic Show (CES), we are on a band which is incorporating both the oxygen levels, heart rate monitoring, and a whole list of other aspects is being sold for $35. More and more people are going to be carrying around their wrist the capacity to be able to move fluently from a digital engagement to a bricks and mortar engagement. 

I as a studio would want to understand how I could help them to make that move. And that move is not going to come from just delivering the same product because their expectation is different. Here’s a really simple maybe even… You’ve now got consumers that have got a better understanding of what their capacity than they ever had before. So why not have my classes openly categorized with the same type of terminology that an Apple Watch, right, or on a Garmin, so that you know the bands that are there. I know a red is going to be the equivalence of a 8/10 on a Peloton on a difficulty rating and those type of aspects. Just giving that fluidity and mobility is going to change the relationship with consumers that have more confidence. Once they get in they’ve got to see the beauty of the product and hopefully you can move through from there.

Kevin: Yeah. That’s really interesting. It’s like you have to smooth the path into the bricks and mortar by being more advanced from a technology perspective. It’s like you’re appealing to children who’ve grown up in these phones all the time. It’s the same. You have to think about it in a similar way. 

Ian: Even the transition on the content side. The entire content marketplace has to transition from long form was taught to be 90 minutes to long form now would just be 10 minutes. And if you don’t capture the viewer within the first 20 seconds… Now, can you imagine having an engaged digital user that other product will then moves into a bricks and mortar. Where is that stimulation? Where is that guidance? Where is that capability? Now, what I do believe is that most operators, certain studios are not going to go out there and employ themselves a CTO to then go and build themselves an impressive tech stat to be able to do this. What they should have confidence in is that the market is going to produce the capability. It’s going to produce these aspects but what we need to be as studios, we need to be aware what’s going around in the marketplace. We need to have the capacity to trial and engage with these new providers coming in so that we can look at what is best and we could start to play our part in dealing with the new consumer that’s coming in with us rather than just expecting our existing product to be something that they want to stay with. 

Kevin: That’s a good way to finish up here. I think you’re right. I think listening to this podcast is actually a great introduction to raise people’s awareness of what they’re going to have to be thinking about in the future. Ian it’s been really great to talk to you. Before we finish tell us what’s the biggest lesson that you learned in the last 12 months? 

Ian: I’ve got fair a bit of gray hair in my head these days. I have 50 last year. I thought the most of it there… I think the strength of your business being your people and not the product. Let me give you a reason why I say that. Absolutely, some shiny business are going to shit in the last year. It’s because they didn’t have the people require to make it work. Sure there was financial market challenges. We keep in the end to the first lockdown having spent the previous ones building out a team to capitalize on a huge interest we’re receiving, then bang. A new reality have us stare in a couple of months’ runway before the lights was turned off. The best part it will not save you but the best people will. We end 2020 with Q4 being our best quarter ever from our business, on investment rounds, scale our future on a product that we completely engineered. You have to have the right people and the bus will be successful. In my mature years, I’ve always been aware of that but never more than in 2020. I think that’s probably what most studio and fitness operators are seeing at the current time. I think this type of periods of adversity certainly people stand up will be counted. But for me what I have learned to what I will continue learning is that business success or success in life in general comes down to fundamentally the relationships you have and the people you work.

Kevin: Okay, Ian, before we wrap up, just tell people where they can find out about you and about Keepme and how they can get in touch?

Ian: Cool. Well, we have that whitepaper is going to be available on the website. I’m now going to tell you, it’s 30 pages. [unclear] If you head over to keepme.ai you will be able to get it from there. My only ask from everybody on this one is that if you’ve got any comments or ideas, then share with the group. I’m very interested in engaging on these topics and learning on those perspectives. And you can get hold of me directly at [email protected]

Kevin: Okay. Ian Mullane, thank you very much for coming on the show. 

Ian: Thank you. I’m glad to be here. Thank you very much. 

This podcast is brought you by Glofox, a boutique fitness management software company. If you want to accelerate growth, work efficiently, and deliver a well branded boutique costumer experience, then find us at glofox.com.                         

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