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In this webinar, Vice President of Mid-Market Sales, Steve Ayers, leads a conversation on retaining, engaging, and winning back health club members during the COVID crisis. We offer this talk to support everyone in our fitness community in getting the resources you need to recover strong from COVID-19.

Short on time? Here are the takeaways:

1. Automated engagement assistants are extremely powerful in engaging your members during this time, especially if your staff is thinner than before.
2. Automated engagement assistants can be onboarded and ramped up within two weeks.
3. The engagement this type of assistant can drive far exceeds cold calling and other traditional outbound efforts.  

For the full webinar, read below or play the recording above. 

Video Transcription

Steve Ayers: Thanks to everyone for joining today. We're here for a really important reason, probably the most important reason. We're here today because we want everyone in our fitness community to have the resources that they will need to recover strong from COVID-19.

What does that mean? I think that's different for every club. But, in general, it means how are you going to retain members? How are you going to keep them engaged by your business? And, eventually, how are you going to win back members that you may have lost due to COVID-19? Now's the time to focus on keeping your business viable, but how can you come back even stronger?

To help explore the potential that AI has to offer, we've invited some special guests to join us, Andrew McCraith and Mark Harrington. Andrew is the Vice President of Business and Corporate Development at Conversica. Conversica is a thought leader in artificial intelligence for the fitness space. They're helping some of the most trailblazing clubs strengthen their member acquisition and engagement, along with retention. Welcome, Andrew.

Mark Harrington, Jr. is the President of Healthworks, Republic Gym, and also GymIt. Healthworks is one of the premium fitness clubs in the country. They're in downtown Boston. It's the largest family-owned fitness company in Boston. Mark has played a crucial role in the development of the company, which currently operates four different concepts in nine separate locations. The company includes more than 25,000 members, and helps oversee 500 employees.

Mark Harrington: Hey, everyone.

Automated Engagement Assistants in the Health and Wellness Industry

SA: Andrew, we're here today to talk about this new inventive and innovative resource. Could you please tell us what is AI and how does it affect the health and fitness space?

Humans Plus AI to Scale Business

Andrew McCraith: Conversica's mission is to help our customers, our users and our partners realize the workforce of the future, where people and AI are working together in harmony to scale business. Now more than ever, we know there's a new normal. We can't go back to doing business the way we used to.

People bring a lot to the table. We're creative. We build relationships. We like to advocate the benefits of our membership. Machines, AI, on the other hand, your engagement assistant, is highly scalable, reliable and consistent, incredibly predictable and persistent, all the traits of what a machine brings to the table.

AI isn't here to replace your team. The engagement assistants are here to augment your team and to take on the work that your people either can't do or just simply won't do well.

SA: What are some of the recent trends now and how is that going to be used more in the health and fitness space?

AM: Absolutely. The engagement assistants can help anywhere along that customer journey, that members ... First time they reach out to your club becoming, a member, and then even once they are a member, getting the most out of that membership. What we're seeing right now is a strong desire to be able to engage members even in these hard times. That's made challenging by having doors closed, not having all of our staff that we'd like to have.

Core Membership Skills

AM: The predominant skills that we hear people talking about are winning back their former members. We've had a lot of cancellations. We can't hide from that. Our system thrives on reaching out to them and proactively working to bring them back.

"The predominant skills that we hear people talking about are winning back their former members."

In addition to that, all those prior leads that you may have had in the past, those members are out looking around as well. As people start to open their doors again, reach out to that broader market to build up your membership base. Then those members that have stayed with you, how do you engage with them, let you know you've reopened your doors, and get them back into the facility, get them back re-engaged and utilizing their full membership. Those are the three areas we're seeing people really focus on as they look at how they can accelerate their recovery in the weeks ahead.

Adapting AI to COVID-19

SA: How have you adapted this to the COVID-19?

AM: Yeah. We've done a few things in our messaging. We've added COVID-19-specific verbiage and we had some conversations specific to COVID-19. Here's an example of what one of our conversations looks like. This stuff in orange or yellow, depending on what your screen looks like, those are the variables that are changing. Those get tailored to every conversation, to each assistant, to each gym so they can speak to their specific program.  

AM: In this one, we're reaching out to acknowledge the situation and advise people that we do have a portal where you can go to get that latest information, and try to drive action for the member to engage by visiting the portal.  

An Engagement Assistant’s Skills

SA: You've mentioned a couple of times the idea of an engagement assistant. Tell us what that is and what does that mean for a club.

AM: Great question. The assistant is tailored to your specific club. You get to give her or him the predominantly female personas, but it can be a male persona. Treat them like they're part of your team. They have a name, they have a title, they have an email address. Everything they do is to represent your brand in engaging with those current or future members.

That assistant can either take a contact list from an Excel file and load it up or integrate in with your system of record, like a Salesforce or other solutions, to be more automated. Then she starts messaging, and every message is a little different, every message is personalized. She keeps going until she gets a response.

At that point, she knows how to process it and identify the positive intent from the negative intent. Then drive them towards the call to action you've targeted. That could be driving them to visit your portal and click a link. That could be driving them to come in and visit your club when you reopen. It could drive them to schedule a call with one of your sales professionals.

SA: The resumes look to this. You think of it as an employee, as a skill inside of your club working for you.

AM: Absolutely. She's part of your team. She just happens to be a machine part of your team. But the more you think of her as part of your team, the more ideas you'll have for how she can help your team. We've been fielding input from our current customers on how do we do this in the current environment. Can we create a new conversation? Can Alaina help me take on this task? What do I do because I have a reduced staff? Where can she really help us scale our business in these tough times?

SA: That's great. That's great. We'll bring Mark in here too as well. It's interesting, Mark and I have a long history. It seems like we always get together during crisis. One of the times I went to visit Mark and his team was right after ... I think it was about a week after the bombings in Boston.

To be in that office and to be on the street out on Charles Street, there were no people, there was a lot of sadness. But Mark had a team rally, probably 20 in the room, going through software. I think Healthworks is a real testament to how can we come out of challenges and how can we take situations like this and be forefronts in the process?

The Challenges We Face  

SA: Mark, Andrew touched on how AI is used in the health and fitness space. I think this tool is even more essential now than it was pre-COVID, as I, just like you, speak to probably 10 or 20 club owners a day. I'm a club owner as well as you're a club owner. I think we see firsthand what the challenges club owners face. Tell us a little bit about what your world is like, what your day-to-day and your experiences is during this pause or shutdown.

MH: Thank you, Steve. That was a dark day, back when the marathon bombings happened. You were there for us. Then over the last month, you and Daxko were there for us again. I really appreciate it. I appreciate your support.

It's been a pretty brutal month. I think everyone on this call would feel that way. We got off to a great start this year and things were really looking good, and I guess really the floor fell out from under us in early March and then accelerated through March.  

Us, along with pretty much everyone else on the call, has closed all our facilities. We are faced with daunting challenges. What do we do hundreds of employees, tens of thousands of members? How do we treat them all fairly? How do we treat them all with the respect that they know we do?

We really worked through it. As an organization, we focused to be aggressive about it. We did sit down and we relaunched every product we had in the virtual space. We've got a virtual membership. We turned [inaudible 00:11:06] classes, and then an extensive remote training program with one-on-one personal training.

What we're doing every day is how do we keep our members happy. Then we transitioned over the last few weeks on how we expand our sales reach and sell memberships, but not be constrained to a quarter mile around our clubs, but really worldwide and how can we make that happen.

"What we're doing every day is: how do we keep our members happy?"

SA: I think that's one of the themes of the really good club operators in our space, is some of the things we probably didn't embrace before, we felt were competitors of us, now we're looking at and that's how we're reaching our customers.

How Healthworks Has Adapted

SA: Now we're looking at how can we use technology or how can we use some of these platforms to make this not a competitor, but, post-COVID, how can they now become part of our offerings or expand our reach to our customers? Tell us a little bit too ... I get the question all the time about cancels and freezes. How are you handling that now and what your staffing levels look like in the club while you're shut down?

MH: Yeah, it's been a challenge. We probably have more member requests the last few weeks than ever. We have on about 70% of our full-time staff, and basically everyone is crazy busy. We're being very upfront with our members and making outbound phone calls, a lot of emails, and really trying to stay engaged with them and giving them the options.

If they're willing and able to support us, we're really appreciative of them for thinking to pay their dues. If they can't quite have those means, they can pay for a virtual membership. Then if this is not the right time, they're welcome to stay with us on their [inaudible 00:12:57] and we'll see them when we reopen.

SA: Wow! Some of the people that know you well know you come from a software background. You've always been the guy that, either through REX Roundtables or just one-offs, you've always been looking at technology. How can I leverage technology to either help my operations or a better member experience or increase our revenue? Tell us, as that relates to AI, how have you adjusted your approach into this COVID process to bring AI into your methodologies and processes?

MH: Yeah, that's a great question. I'd say the transition probably happened about two years ago, I think. When we all did get together at IHRSA, when we [inaudible 00:13:48] Sunshine, we got engaged with Daxko and Conversica. Two years ago, July, we brought Sydney onto our team. She's the name of our AI.

It really is amazing. What Andrew was talking about, people treat her like a person. I remember this one member that came up to join. Then she asked the sales advisor, she's like, "Oh, I'd love to meet Sydney. I worked with her before I talked to you." That was our AI and that's a pretty typical response.

Optimizing the Sales Process

MH: What we did is, a few years ago, we really looked at our sales process and saw what were the tasks that our sales team were really good at and what were the tasks that our sales team hated. The biggest thing they hated was cold calls.  

We used to have these Excel spreadsheets where people would have a list of hundreds of names. If they weren't busy, they were expected to be going down this list and calling the names, and they hated it. It took them a lot of time and they didn't get many results. It was always loud and clear what they were actually doing.  

Drive Action Campaign

MH: We brought Sydney on to basically complement our team, and we offloaded a lot of these really tedious tasks that the sales team hated. Instead, Sydney basically did the cold follow-up with leads. Then once someone's interested, she handed them off to the sales team, and the sales team took over.  

We took this approach. That's been working for the last year and a half plus for us. It brought us right into some selling our virtual memberships. Just last Friday, we loaded in basically former members, and Sydney reached out to all of them and said, "I just want to let you know about this special virtual membership we have." It's a great way to re-engage with the team. She's working day and night to our list and then handing it off to our sales team.

SA: Which is good. Have you been able to ... You and I are friends on social media, so I see the Harrington family's everyday group fitness/virtual class at home. If you guys have been able to leverage that. Then maybe talk to us a little more about some of the campaigns you've launched.

MH: Yeah. I think the virtual group fitness is the heart of our virtual membership. About a week before we closed ... It's funny, this has been something we've been talking about for years and saying, "We've got to get this," and there's always one thing that's more important on our list than this.

But a week before we were forced to close, we started filming like crazy. We launched about 20 videos. I think we've got about 16 now and we're having 40 this week, and we're going to be looking to add 80 the week coming up. Really what we're doing is try to add extreme value to this virtual membership with a large volume of high-quality classes. Then we're selling it for about $1 a day.

Campaign Success

SA: Wow! That's great. Tell us, what kind of success rates are you seeing in these campaigns and from Conversica?

MH: Yeah. I think we tried a lot of different stuff over the years. We're pretty consistently seeing about a 1% join ratio from leads we load into it, and it basically takes some time to process through. I think one of the most amazing things about the AI [inaudible 00:17:39] come up. I think we've all seen the slide where a sales person ... About how many times a sales person needs to follow up with someone to get success. Sydney actually does it where our sales team usually feels like they're bothering someone after the second of third attempt.

We loaded our list into Conversica on Friday. She tried out over 5,000 contacts, worked all weekend long. 1800 of these contacts were engaged. So far, 27 of the contacts had written back to Sydney, saying, yeah, they're interested and either have taken a free sample class or said they want to learn more. So far, two of them have joined. We expect through the [inaudible 00:18:26] these numbers are going to keep going up.

SA: That's hard. You look at the consistency when you start calling off those sheets, and your cold calls or your outbound is really more contingent upon who you have doing it versus success rates. How do you gather that data, get it back, and really manage and monitor what your success? It's very nice as a club owner to say, "Not only do I know I have a consistent sales process, but wow! At real time, I can look at it and say there's 27 hot leads and two sales." That, as you know, always had been a challenge.  

MH: Yeah. It's interesting. I think our sales team was all concerned when we brought it on, but now they look at this and say, "Oh my gosh, I've got 27 hot leads," they love it.

SA: All of a sudden, they love it, right?

MH: Yeah. Rather than having to look through this list of 5500 people and try to cherry-pick out the 27 hots, they've got the list right in front of them.

SA: Which is great. It seems like we're still in what you call the belly of the beast or, as Marissa would say, the midst of the fray. But I think what I'm hearing on a day-to-day basis is, okay, now that we've come to grips with what's happening in our world and our economy and our clubs, we don't like it, but now it's time to get our head up. Now how are we going to exit this crisis? How are we going to recover from this?  

How Clubs are Recovering

SA: I’d like to get both of you guys, Andrew and Mark. What do you see a lot of the clubs that are now doing to start that planning process and starting to recover from all of this?

AM: Yeah. I see two categories. There's a group that is really working on triaging and surviving, keeping the lights on here and now. They may have new offerings, like what Mark just mentioned, and how do we get people to take up the virtual memberships and the virtual classes. There's that group.

Then there's another group which is saying, "We're shut down. We can't do that. Let's start looking ahead. What do we do when we can reopen our doors?" and they're looking at how do we invest now in our tools and our processes so we can come back as fast as possible?

Investing Time: Humans vs. Engagement Assistants

AM: That's one of the great things about the AI assistant is she's already trained. This isn't IBM Watson. You don't need six months and petabytes of data. She knows what to do on day one. Over 80% of our customers, they get on boarded, they get the assistant producing and sending messages inside of two weeks.

We can help gyms in this current environment deploy immediately so that you're ready to hit go whenever that day gets here.

SA: Yeah, you think about that. You say, okay, from go to show, you're two weeks, you're warming up a domain, you're getting your program set. You're getting everything loaded in. You can hardly train an employee how to check in people on the software and issue a key card in that quick of time. That's a pretty quick ramp.

AM: There is some training for the human team, but we can do that via Zoom just like we're all doing right now. Once you get past that triage “keep the lights on” mode, the Conversica AI system's there to help the team scale right back up. Now's a great time to be investing in that.

SA: Every time I go into GymIt or Healthworks, which is ... Sorry, my favorite, Mark, is Republic. I try to steal as much as I can from Mark, because I know mark is very methodical and very process-driven. Instead of me spending my time doing, I just fly to Boston and figure out what he does and then just rip it off. Mark, share with us what you're planning to do in your own facility between now and the relaunch of all your brands.

A Change in Consumer Behavior

MH: Yeah. We're looking at this as a total change of consumer behavior, where two months ago, I said these are our clubs and our number one priority is to get people engaged with our clubs and coming into our clubs all the time.

We're looking at it and seeing that our clubs are still going to be the best possible experience that somebody can get. But people are getting used to working out in other places, and we need to meet them where they are.

We're still going to provide the best-in-the-world experience when you walk into our clubs, but we're looking to see how do we augment that experience with great remote training and great virtual fitness and make sure that we can meet the consumer where they want to be. That's what a lot of our focus is on.

Then there's all the other stuff we're working on. I, fortunately, have a really amazing team that is handling a crazy amount of logistics on what kind of disinfectants to get and how to wipe down all the equipment and all of that stuff. But there's some massive checklist and process for how we safely reopen our doors, but I'm dealing with the fun aspects of how do we grow and expand our business.

Gym Cultures and Subcultures

SA: You look back a few years ago, you look back probably five to seven years ago, everybody's trying to figure out the box in a box. You had this nice 30,000, 40,000-square foot club. You're going to compete against Flywheel or you're going to compete against [Inaudible 00:24:04] and all this.

Inside of our boxes, we've got to create small boxes to create and fulfill these subcultures. Now we're starting to look, okay, well, maybe that's not all the case. Just same as you do software sometimes, let's just bolt out some products outside the club.

We have a saying in our club. It's, "Our goal is to make it the best hour of your day," because that's all we can reach you. Now, with what you're talking about, you could reach them in the evening, the afternoon, Zoom calls which trainers.

I think this has really opened up our eyes to how we can go compete outside our clubs. With Conversica, it really allows us to target who we want to get to do that.

I think you can see that this tool not only is helping clubs right now, but really is going to be a strong proponent and an aide to clubs as they go forward and they try to relaunch. Some clubs are really considering these almost like grand openings again, and that's how they want to go after members.

Others are saying, if you look at some of these larger clubs, that we need to really retain these members. How are we going to communicate to them? How are we going to make them feel comfortable, that we're safe, we're secure, and we understand their needs going forward?

We here at Daxko, CSI Spectrum, and speaking for Conversica as well, we're committed to help the fitness community recover strong. That's one reason that we're doing these types of webinars. Right now, as part of our deal with Conversica, we worked with Andrew, that we're offering complimentary access to Conversica.

We feel it's important, whether it'd be through Conversica, through SMS text, and through some other products that we're doing, that we really have to come alongside of our customers during this process. It's really a “we,” not a “you guys.” We'll share more details on a follow-up email on that how you can get Conversica for a while for no charge to you guys.

But now I guess we'd like, unless Andrew or Mark have anything else they'd like to add, open the floor up to some questions and let Marissa take it from here.

Questions

MM: Yeah. I have some questions for you. We can wait for a couple more minutes for more people to enter some as well. But my first question for you guys, how do you feed information to the AI assistant?

AM: Yes. We have two options. One option is a simple Excel or CSV file that you can load in. That works really well for a lot of activities where you get that list. Depending on your system of record, we can also integrate directly. Then that becomes an automated feed into the assistant.

Some people have integrated to our API. We integrate with over 50 systems. We're continually adding more fitness CRMs and fitness club management systems into that. Continuing to add more ways that you can make it easy to add leads.

SA: I think that's one thing they understand very well. Usually, the success of adoption of a new program is tied to the process, but it's also tied to the simplicity or the ease of conversion and launch. I think Conversica has a pretty good understanding of how that works. It's pretty much a streamlined process.

MM: Great. My next question for you, what does the onboarding process look like for Conversica?

AM: That's a great question. We work hand-in-hand with the Daxko team to get that club up and running as quickly as possible. It starts with a kickoff call. We want to bring the relevant members of the team at the club together so we can walk through that specific plan where we outline here's the steps to take, make sure everyone understands what we're trying to do initially. Then put that plan into motion.

One of the most important things to be successful is to be really clear on what you're going to do at the start. It's easy to get grand visions of the seven things you want to go do and all the ways AI can help. If you get caught in that mode, you may never get started.

That's a big part of our kickoff is what's the thing you're going to do first and then what are the thing we're going to do after that? We can make sure we get you started and up and running as quickly as possible.

Certainly, the most fun part of onboarding is creating the persona for the assistant herself. She needs a name. It's surprising, sometimes this is the longest part of the onboarding process, is going through all the creative fun and agreement on giving her a name, be it Sydney, Taylor, Alex. We have a lot of best practices we can share. I've learned a whole lot about androgynous names more than I ever thought I would since I came here. But it's fun. When you embrace that fun, you're just going to find more ways to be successful.

SA: Mark, I have a question for you. When you were selling this virtual membership and you start to launch that program, how did you get a target set of potential customers? Was it from your customer base? Was it your customer base plus your prospects? How did you target that?

MH: We originally started with our active members and then have expanded to basically our full database, so former members, prospective members. Then our biggest success has been the active members that are on a billing freeze to getting them to switch from a no billing up to a paying membership.

SA: That's good. You're engaging existing members, going after prospects, and actually re-engaging alumni members. That's good. Sorry, Marissa.

MM: Oh no, no problem. Another question I had come in. Is there a limit to the number of people that AI can talk to at the same time?

‍AM: That is the beauty of the assistant. She has no limits. Practically speaking, the mathematical limit is two million. We've only had one customer, and they weren't in the fitness space that approach that limit. No worries there.

We don't charge per message. We encourage you to message as much as possible. Reach out to as many of the contacts that you have and keep going as much as possible.

MM: Another question I had come in. Are there any stats on how many touches Conversica needs to engage a lead?

AM: That's a great question. It varies a lot with the use case. What type of audience are you reaching out to? It varies from club to club. It varies on many things. What we do find is that undoubtedly there's a lot of success that happens after the third attempt. Five to seven attempts is not uncommon. Sometimes even on that tenth or eleventh reach is when we have success.

Undoubtedly, the response is something like, "I'm so sorry I didn't respond earlier. I've been really busy. Thank you for being so persistent and polite and helping keep this in front of me. How can we move forward?"

It's incredibly rare that we ever see someone complain and say, "Leave me alone." It's really the opposite. If we're reaching out to them and they know why we're reaching out and we're there to help them, they're appreciative of that. We're all busy our inboxes are all blowing up these days. Having that polite, personal reach out, it actually reinforces the brand, not the opposite. We can control that cadence. For whatever reason, you only want to go with five attempts, we can adjust that for your assistant.

‍SA: Andrew, along those lines, I'm going to put you on the spot. We haven't talked about this, so I apologize ahead of time. Speaking of that open rate engagement, do you have any data on that, kind of what it looks like?

AM: Absolutely. Our delivery rate and open rates are in the high 90s, typically. The engagement does vary depending on the use case. You can imagine, if you're reaching out to existing members, you're going to have a different result than if you're reaching out to former prospects that never joined.

We see engagement rates anywhere from 15% to 35%, typically speaking. We've done a lot higher, we've seen some come in lower. Then actual turning that into a hot lead where someone says they do want to take that action you're driving them towards, a couple percent up to 10% or higher depending on the specific campaign.

SA: Wow!

AM: One thing people often ask about is does she get it wrong or how often is she able to handle this? Is she really autonomous? The benefit of doing this for as long as we have, we're approaching almost a billion contacts across all of our customers and all of our industries, is the models that power the AI have gotten really good. Over 90%, and we're approaching 98%, 99% in some cases, of those messages, she's able to autonomously respond to and get it right on what that intent was.

On that occasion when she doesn't know, if someone asked her an oddball question, she's been asked out on a few dates or someone wants to recruit her for a job, she doesn't guess what to do. She raises her hand and stops and ask the human team behind her to get into the loop and tell her what to do. On that small percentage, the team's there to train her and educate her on how to handle that.

MM: Awesome. My next question for you, can you give us a little bit of history or background on Conversica? Is it a new company? Is it in other industries?

AM: Absolutely. Conversica's about 10 years old. We got started in the auto dealership industry. Our founder was selling leads to auto dealers and they weren't getting followed up with. That was the impetus for Conversica.

Fast forward to today, we're used in thousands of dealerships around the country. We also have a significant customer base in tech, higher education, financial services, manufacturing, health and wellness. We have over 20 pro sports teams as customers.

It's really any organization that should be reaching out to their stakeholders via digital means. We have a place where we can help them. We tout over 2,000 customers today. We're approaching 50,000 phrase packages or conversation templates for an ever-growing set of use cases that we're continuing to get even more honed in on.

MM: That's great. That's awesome. A question for you, Mark. In your targeting, who else did you target for your virtual gym outreach? Was it just gym members?

MH: It was all of the above. Our primary focus for the existing gym members was if you're willing and able, please continue paying your dues. Then what we're considering the new sales, so that's people that were engaged with us previously.

That's based on the two main pools are former members. We're living in a highly [inaudible 00:36:32] city and a lot of members are moving out of town. We're trying to loop them back in and engage them virtually. Then also our prospect pool. It's anyone that had been in our database, but had an interest in joining before. We don't want them to have to wait. We want them to engage now virtually. Then they can join the gym for real when we reopen.

SA: That's really big for you too, Mark, knowing ... Not to put your business on the street, but you probably have one of the most successful and engaging personal training departments that I've ever seen. It wasn't a matter of do I want to launch virtually, maybe you had to watch launch virtually, especially from the Healthworks side.

MH: That's for sure. We have an amazing training team, so we're looking to still do about 4,000 hours of paid training this month, even though our [inaudible 00:37:30] closed mid-March and we're looking to only go up in May.

SA: It's amazing numbers.

MM: To jump back to a previous question with you, Andrew. This is an assistant, the same assistant. Is it used in the auto industry the same way? Is it the same assistant in that regard?

AM: There is some overlap and then there's some uniqueness between each of them. In the auto market, we have a different set of conversations that the sell side of the house uses, when people are looking to buy a car, from the conversations we use on the service side of the house, to get you to come in and get your car serviced. After you had it serviced, a lot of dealerships run promos. They use it quite differently in those two cases.

In the fitness market, for our gyms and clubs, some of those same conversations are pretty similar. Some of them are very unique and specific to the gym industry.

The underlying tech of the models in recognizing intent is very similar. The actual conversations that get generated and communicated is quite different. That's something we're continuously looking at and working with our customers for feedback on what else can we do to make it more specific to your domain, to your set of customers?

‍MM: Now there is a value of that personal touch with staff in place. How does this not replace them, or how do you make sure the AI complements real staff?

AM: I'm happy to answer that. Mark, do you want to go first, since you're living and breathing this, and your employees are embracing it and enjoying it?

MH: Yeah, happy to. I'd say this is probably one of the most common questions I get when I'm talking to other people interested in it. I would say it's probably the biggest concern our sales team had when we announced it. I think their initial reaction was, "Are you replacing me with a computer?"

They quickly learned that it was not a replacement, but it was a way to use a tool to offload the tasks they didn't want to do, some of the things like cold calling or things like going through whole lead databases. It was just really boring tasks they hated doing.

Instead, we have our sales team focus on high-value activities, so dealing with hot leads, working with walk-ins, trying to sell corporate accounts, stuff that they're really good at, engaging with people. Then we let AI take care of the boring stuff. Cultivating a lead pool and getting leads to the hot stage, and then we hand it off to the sales team.

AM: I would add there's a lot of campaigns that clubs would like to take on, but they just don't have the extra resource to go and do it, or that they might not be sure it's worth doing. That's a perfect thing to put Taylor or Rachel or Jenny task to. That could be upselling a secondary program. It could be those old leads that never signed up to become members, things that you thought may not be worth it. You only need to find a couple percent in those big buckets to realize a pretty healthy ROI on the investment to help grow the club.

I'm glad this question came up because one of the things I enjoy most about this product, it isn't that it grows the business and drives dollars, it's that it actually helps employee morale. Employees are happier because they're doing more of what they like in their job. That always gives me a personal level of satisfaction with what we're helping our clubs to achieve.

"Employees are happier because they're doing more of what they like in their job."

MM: Mark, how many people would you have had to hire to do what Sydney is doing?  ‍

‍MH: Yeah, I don't know. I was just looking at my dashboard when Andrew was answering one of the other questions. Yes, I think it's [inaudible 00:41:51] 34,000 emails for us as we came on board a year and a half ago, so I'll let you do the math. Each email is personalized and individualized, so it'd be a lot of people.

AM: Yeah, it's not just how many contacts you reach out to. It's how many times do you continue to reach out and persistently follow up with them until you get the engagement. The best SDRs, they struggle after the second or third. Even if they're doing a fourth or fifth, it's a cut and paste. It's not very personalized.

We know it takes more than that a lot of the time, and that's not what our people are best at. We'd rather have the AI go do that. That's what the AI loves to do. She never gets tired, she never gets sick. She just keeps going with a smile on her face and bring that hot lead in so the human team can then take them on a tour, answer their questions, build that personal relationship, and get them sold on the membership.

MM: We only have time for a couple more questions. But just to add on to that, Mark, what would you say is the ROI on this compared to what you were doing before you had AI?

MH: It's a tough question. I'm pretty sure there's a white paper on Daxko that actually quantifies a little more. I'm sure that they can share with all of you, and it goes through our stats. It's a solid ROI. We're looking at 1% to 2% of contacts we load into it end up joining. We are about $100 a month club with a 20-month average lifespan. When you actually do the math, it becomes quite a nice investment.

AM: One of the clubs we worked with, in their first 90 days, they were able to generate 90,000 new memberships. I've always liked that one because it's just a really easy set of numbers. It wasn't anything we dreamed up. It just played out that way. That was from one campaign. That gym is now running a variety of campaigns and different use cases, so seeing an even more significant return.

MM: My last question for you guys, are there some other ways to generate revenue in engaging customers?

MH: There's a bunch of different conversations that you can load in. Our main focus has been on new member sales. But it has some other [inaudible 00:44:35] capabilities for basically upselling existing clients, so booking your complimentary training sessions.

Other use cases we've looked at are low users. One's someone that you see use the club that's fallen off the club, have the AI reach out to that person to re-engage them and get them to come back in the club. We offer them a free session to do that. It's a much more personal approach than the mass email, whatever you use to do it.

AM: Yeah. We've seen some clubs use it to migrate from an individual membership to a family membership. If you're running multiple brands, you may have a standard experience and a deluxe experience. Migrating them there.

Mark mentioned that selling those additional services, so the personal training. Some clubs also have spa services. We've seen a lot of success with those clubs promoting and executing on various campaigns on that front to make sure their spa's fully utilized.

SA: I think it really comes back to the basics, though. The answer to every question in the fitness space is sell two more memberships a day, and none of that matters. If you can just help me sell two more memberships a day per club, we don't really have to have a lot of discussion around anything else.

AM: I think the other part is keeping them from leaving. If you can identify those low users, like Mark just mentioned, and you can reach out and get them back in the gym, you may not upgrade their membership, but just keeping them before they left. We're increasingly seeing that as something that gyms were looking at.

Admittedly, that's kind of fallen on the back burner given the current environment. But if we're looking six months ahead from now, nine months ahead, that's definitely something I'd be encouraging every gym owner to think about. Once you get them in, how do you keep them?

MM: Well, thank you guys so much. I think that's all the time we have for questions today. But I do want to thank everyone for jumping on the webinar and for you guys for hosting. Steve, I'll let you close out.

SA: We appreciate everybody's time and we hope everything was valuable to you guys. If you have any more questions, please reach out to us via email. Thanks, Andrew. Andrew, you're a wealth of knowledge on the Conversica side. Mark, thanks for all your support. Thanks for being a good friend. Say hello to Senior Matt for me. We really appreciate you guys spending your afternoon with us.

AM: Thank you, Steve. Thank you, Mark. Thank you, Marissa.

‍MH: Thanks, everyone.

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