LAS VEGAS -- Despite being one of the world's largest fitness chains, 24 Hour Fitness knew it was behind the times when it came to technology and reaching its customers.
As recently as 2015, 24 Hour Fitness didn't have a CRM system to work with its more than 4 million members. The company was in good shape -- no pun intended -- but it saw other industries being disrupted and the movement toward customer personalization, so it decided it needed to digitize to remain a leader.
"We knew personalization was important -- we've had personal training for years," said Tom Lapcevic, chief marketing officer for 24 Hour Fitness, headquartered in San Ramon, Calif. "Consumers want to have a personalized fitness solution, but the reality is few people can afford personal training."
Customers expect more engagement
Speaking at Adobe Summit, Lapcevic said about 5% of 24 Hour Fitness' members could afford personal training, so the company decided to personalize the digital interactions and marketing with its customers to better reach them.
"There have been changes in customer expectations," said Cindy Zhou, a Constellation Research vice president and analyst who also spoke at the Adobe Summit session. "Consumers want to engage on channels convenient to them."
We looked at Amazon, we looked at Netflix and thought, 'How do we evolve from being land-based to becoming a solution provider on a 24-hour basis for our members?'
Tom LapcevicCMO, 24 Hour Fitness
Engaging on digital channels was not something 24 Hour Fitness was doing before implementing some more modern technology to help organize and make sense of its customers' data.
"In addition to being a land-based operator of fitness centers, we were also a traditional marketing company doing direct mail, using traditional channels," Lapcevic said, adding that he looked toward industry leaders in customer personalization for inspiration. "We looked at Amazon, we looked at Netflix and thought, 'How do we evolve from being land-based to becoming a solution provider on a 24-hour basis for our members?'"
Lapcevic wanted to build that customer personalization relationship at the first point of contact all the way through membership. And to do so, 24 Hour Fitness needed to understand and use its data to its advantage.
A need to address fragmented data
"We had a lot of data, but it was fragmented all over the place," he said. "We had duplication; it wasn't governed. We were in a tough place with data."
Beyond the data conundrum, 24 Hour Fitness wanted to be a digital brand, but it lacked any content and had an outdated mobile app and website.
"In 2015, the first thing we did was focus on the data," Lapcevic said. "We had no enterprise systems, no CRM systems or marketing platforms."
With the internal team at 24 Hour Fitness refocused, the company began producing new content, creating a new mobile app and royalty programs to acquiesce to its changes in customer preferences. But there were still difficulties in bringing all that information together.
"It was crucial for us to have a common experience across the platforms," Lapcevic said. "Our consumers expected us to know a lot about them."
That's when 24 Hour Fitness turned to Adobe and Microsoft.
Finding the right technology
Adobe and Microsoft announced their partnership about a year ago, later deepening their product integration at Microsoft Ignite in September of last year. Adobe combined its marketing products like Adobe Campaign and Target with Microsoft Dynamics 365 CRM -- a combination that piqued Lapcevic's interest.
"It took a little while from that first engagement with Microsoft," Lapcevic said. "We had to go through an assessment on how to get the right partners to help organize with this."
After going from no CRM system in 2015, Lapcevic said 24 Hour Fitness had its most successful year in its 30-plus-year history, generating its highest revenue and profit ever.
"We did a lot of consumer research to identify how we could use technology to create mass customer personalization," Lapcevic said. "Our goal was to deliver a solution we can scale to all of our members and take advantage of their consumer preferences."
