Turn Member Data into More Revenue for Your Health Club

Though fitness data can be valuable to the club operator the laws regarding privacy of health and fitness information remain a gray area Photo by Thinkstock

Though fitness data can be valuable to the club operator, the laws regarding privacy of health and fitness information remain a gray area. Photo by Thinkstock.

As more members track their workouts either through wearable devices, apps or tracking options on equipment, fitness facility operators have a growing amount of detailed data available to them about users' exercise behavior, heart rate and eating habits. New technologies and integrated platforms have made it easier than ever for health clubs to collect detailed member data and use it to generate revenue.

The question many club operators now face is, how can they make that data work for the club and for members?

The most valuable part of data collection is the ability to find patterns that can be translated to a better understanding of member behavior, says Steve Sweener, senior vice president of operations for Gold's Gym Southern California (SoCal).

To help Gold's Gym SoCal do this, the company is working with Netpulse, a San Francisco-based media and data company, to roll out the Gold's Personal Solution (GPS) program through 12 locations in 2014. The new system will allow club operators and members to share in an integrated data platform that will take member engagement to a new level, Sweener says.

"Gold's Gym GPS will tie technology platforms together—whether it be meal planning, workout planning, tracking, any of those components, and even going as far as referring you to businesses that are in your area," Sweener says.

The system offers usage data, such as how many members are using different types of equipment, how they are using it and when they are using it.

"So when we design a club, we can design a club for what they want," Sweener says. His primary goal is to determine the behaviors that lead up to a member's decision to leave the club, so that the departure can be prevented, he says.

"What if you saved 1 percent of your membership base? What about 2 percent or 5 percent? What would that equal?" Sweener says. "Realize that moving the gauge just that much is not as hard as selling 5 percent more memberships. The usage has a spider effect. These small incremental gains over an entire organization mean millions of dollars."

The Netpulse One product is a data system that interfaces with many cardio manufacturers, mobile apps and wearable fitness tracking devices. The system aggregates data from all sources and makes it available to health club operators for a variety of revenue-generating activities.

"Clubs, especially in the U.S., are buying equipment from more than one vendor," says John Ford, senior vice president of product for Netpulse. "One of the biggest challenges that club owners face in respect to making use of data is that they really need their equipment to be able to talk."

Netpulse also helps club operators turn single source data into revenue, Ford says. Key product integrations allow the health club to become a single point of contact for members to track fitness and nutrition inside and outside the club. The data also provides a wealth of information about member behavior, habits and motivators.

Netpulse communicates with sites such as Perkville and dotFIT. Perkville provides an online loyalty rewards program, and dotFIT uses member data to provide customized online training programs, supplement plans and nutritional products, which health clubs can sell. Other data-based revenue opportunities include serving up targeted advertising and leveraging members' buying habits to gain sponsorships for club challenges and events, Ford says.

Privacy Laws

Though fitness data can be valuable to the club operator, the laws regarding privacy of health and fitness information remain a gray area. Health information privacy laws such as the Health Insurance Portability and Accountability Act (HIPPA) and California's Confidentiality of Medical Information Act (CMIA) do not apply to health clubs, but state-specific personal privacy laws often do. (See sidebar.)

"We do things that companies in the consumer world do, like making sure the user understands what information is being shared," Ford says. "It's pretty standard stuff and, as long as you're telling users what you're doing, most people are fine with sharing non-sensitive information, such as how far I ran on the treadmill, as long as they are getting a valuable service."

Some equipment manufacturers have decided to err on the side of caution by de-personalizing data before it is made available to a club operator. Workout data generated by Life Fitness' Wi-Fi enabled equipment can only be sent to the member's individual LFconnect account. Users can choose to share their fitness information with trainers and health clubs, but those permissions are controlled completely by the user.

"As for LFconnect, data captured there is subject to the privacy policy associated with that site and to the choices the individual account holders make about who will have access to the data they upload," says Amad Amin, senior product manager for technology and analytics at Life Fitness, Rosemont, IL. "In that instance, it is the user who decides where the information goes."

Life Fitness supplies club operators with de-personalized usage data free of charge. When used correctly, this information provides value in a variety of ways, Amin says.

"Clubs can use data collected by the machines regarding usage as a selling point for designating peak viewing times for prospective ads, thus generating revenue from local businesses that can advertise on the consoles during those periods," Amin says.

Precor, Woodinville, WA, has taken a similar approach, providing members with the ability to individually track their workouts and giving club operators de-personalized usage information, says Dave Flynt director of the Precor Experience Development Center.

Part of the benefit of tracking systems on cardio equipment is that some of them include software that allows club owners to track data to determine patterns of usage so they can optimize equipment to prevent uneven wear and tear and proactively address maintenance issues before they impact customer satisfaction, Flynt says.

The end result is that data collection technology can provide new opportunities to drive revenue, save costs and build a tighter relationship between the club and members.

Sidebar: Best Practices for Handling Personal Member Data

Federal laws that protect the privacy of health information include the Health Insurance Portability and Accountability Act (HIPPA) and California's Confidentiality of Medical Information Act (CMIA). These laws apply to health care providers, health care plans and health care clearinghouses. Currently, HIPPA and CMIA do not apply to health clubs and spas. Many states have personal privacy laws that apply to any business that collects personal information.

It is important to understand and follow the laws of each state in which you operate a business. In addition to following state privacy laws, there are best practices you can put in place to protect yourself and your members from privacy infringement issues.

Best practices for handling personal member data include:

  1. Provide members with a comprehensive privacy policy. The policy should include the type of data you will collect, what you will do with the data, where it will be stored, how it will be protected and what will happen to the data after the member leaves the club. Have each member sign a copy of the policy when they fill out an application for membership.
  2. Have employees sign a non-disclosure agreement to protect members from privacy infringement.
  3. If you collect private information online through applications or member portals, post your privacy policy on the home page of your website. (This is required by law in some states.)
  4. Learn the specific personal information privacy laws in your state and follow them. Each state has separate regulations regarding how businesses can capture and store personal data. Be informed about the laws in your state and document how you are following them.

Although health clubs are not currently subject to the same strict privacy regulations as health care providers, the regulations can change at any time. Follow the laws set forth by your state, stay aware of changing federal regulations and follow best practices for keeping member information private and secure.

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