This podcast is a real masterclass in loyalty. Dean talks about single view of customer/member, retention, customer lifetime value, emotional loyalty, real-time view of member data and personalisation.
Dean’s leadership is driving a quest to ‘improve people’s lives through wellness’; wellness created from the merger of a fitness brand (Virgin Active) and a nutrition brand (Kauai).
Virgin Active has launched its Rewards programme, firstly in South Africa in 2023; its roll out plans are UK and Italy in 2024 and APAC for 2025.
Hosted by Amanda Cromhout
Amanda: Hi, I’m Amanda Cromhout from Truth. And today I have the pleasure of speaking with Dean Kowarski, who is the global CEO of Virgin Active. Virgin Active operates in eight countries, has over 230 clubs, and over a million members worldwide. Dean describes a move to a social wellness club away from the traditional gym structure, and in their partnership with Kauai, they’re able to create a real wellness brand, not just fitness, not just nutrition, but real wellness.
They’ve recently launched the Virgin Active Rewards program, first of all in South Africa, but with plans to roll out to the UK and Italy in 2024 and Asia-Pac in 2025. And the Virgin Active Rewards program rewards for frequency and consistency with a combination of instant gratification and the ability to build up rewards for broader benefits. It drives retention, reduces churn, increases usage.
My discussion with Dean is a real masterclass for loyalty professionals. We talk about the single view of a member, retention, customer lifetime value, real time view of member data and personalized experiences that really change people’s lives and change the performance of the Virgin Active brand.
So hello, Dean. Dean, you are the global CEO of Virgin Active, and we are incredibly excited to have you on the Let’s Talk Loyalty Show. Thank you for joining us today.
Dean: Thank you. It’s great to be here. I appreciate the invite.
Amanda: So I know we’ve got so much to talk about. You’re working for an absolutely amazing brand, but it’s not really just that story that we’re so excited about. It’s the integration of the amazing Virgin Active brand with another wellness brand that creates an even better customer experience that we’re going to unpack in our discussion. So can’t wait to get into all of that.
But before we do, I think, you know, there’s a traditional question for the Let’s Talk Loyalty show. And that is, what is your favorite loyalty program?
Dean: Man, that’s a really easy question for me to answer, probably a little bit biased, but with, without a doubt, it’s the Kauai loyalty program. It’s a loyalty program that I started and was very involved in being involved in the Kauai business.
But actually, aside from that, without my bias, it is honestly the program I use the most and that’s why it is my favorite. I eat healthy. I think it’s a really simple program to follow and understand. I’ve got my, my genuinely the top tier status on that program and I enjoy all the benefits that come from that.
So it is just with, without wearing a Kauai hat and just wearing a consumer hat, it’s a great program. I use it incredibly frequently. So, so without a doubt, my favorite program, if I had to look at a program outside our group and something that I wasn’t involved in, I do like the Nike membership, which is more of a club than the loyalty program, but I think what ticks all the loyalty boxes as well really nice exclusive perks and access to special events.
And I’m a bit of a sneakerhead. I collect sneakers, particularly Jordan sneakers and being part of the Nike membership program. I often get early access to product launches which they really understand me. They know me and those services appeal to me. So I think Nike has really done a good job in creating a whole lot of exclusive perks, nice community around it and a lot of personalization. So Kauai at the top, well ahead of Nike. And for a distant second, Nike.
Amanda: I love that. I love it. I love it. So thank you for sharing both of those with us. I’d like to add, you’re not the only one who’s mentioned Kauai and Nike membership before on Let’s Talk Loyalty. Both of them feature in the Top 100 Favorite Loyalty Programs of Loyalty Professionals who’ve been interviewed on Let’s Talk Loyalty. I feature that in the Blind Loyalty book, which has the Top 100. So both of those are mentioned before, but I think as you said, Kauai from our point of view at Truth, we’ve run the South African Loyalty Award for years and Kauai has successfully won for several years, the Best QSR and Restaurant Loyalty Brand.
So you’re not alone. And thinking that it’s, even though you may have a slight inward bias there, we can’t remove that. You’re not alone in thinking it’s a fantastic program. So that’s great to hear from that. And great to hear about Nike as well. So Nike membership. So thanks Dean for sharing those.
So I think you, you are heading up this huge organization, a global organization. And as you said, you’ve come through in the South African landscape with this incredible, well known brand in South Africa, but it’s not only South African now. So we’re looking forward to hearing the expansion of Kauai from you. But you founded the Real Food Group and clearly have an absolute passion for healthy living, but tell us a little bit more from a career point of view, what brings you to where you are now, which is just a very exciting point in both of these brands?
Dean: So I didn’t start out in health and wellness which is absolute passion of mine. I started in a very traditional finance route and I studied finance and I worked in finance and corporate finance after my studies. It wasn’t a real passion of mine, but it’s something that provided me a springboard in terms of my ability to do what I really wanted to do was wellness.
So I worked overseas in corporate finance. I worked in South Africa in, in corporate finance and then ultimately through the corporate finance world was able to get involved in operational roles and in business, in businesses that we ended up acquiring. Some of them are quite a strong retail focus, multi stock retail businesses. And that really enabled me to cut my teeth in operations. So, so that was a really nice opportunity to take a small business growth into a multi-site business, all the learnings around retail and how tough it is and understanding the consumer.
And then went into a financial services business with very different skills and different consumer base there, but learned a lot in those businesses, but effectively through those two businesses and then the ultimate disposal of those business enabled me to start and get involved in the stuff that really was appealing to me and really meant a lot to me.
It was very personal. I had through that journey in working in these big corporates. I didn’t lead a healthy life and I wasn’t performing to my optimum. I didn’t believe, and that’s not only in a work environment, but in a personal environment with relationships, etcetera. And I was, and I actually became physically unwell and was on medication.
And wanting to come off the medication, I started to look at nutrition and exercise and change my lifestyle, made some really big lifestyle changes and had this incredible impact on my overall wellbeing. And really that’s just how important those foundational pillars of wellness are of how you eat, what you your sleep habits, exercise, et cetera.
And it was unfortunate enough because of my corporate experience, get involved in the nutrition business, founded a nutrition a healthy food restaurant, grew that acquired Kauai, grew out Kauai, purchased some other healthy food businesses brought those together as real foods.
And then the final step was, well, now we’ve got nutrition and we’ve got healthy food. Let’s bring that together with the next biggest pillar of wellness being fitness. And we merged the fitness, which is Virgin Active together with Kauai. And we’ve created what I believe is one of the first true wellness business, not a pure fitness business, not a pure nutrition business, but an integrated wellness business on a global scale. So really excited with the merger and the partnership between Kauai. New and Virgin Active, which is where we are today.
Amanda: Wow. What a story. And I didn’t know some of that story, Dave. So thank you for sharing it. And I think what is so incredible is that it’s a very personal story as well. You know, your career starting out in finance and operational roles, which so many people are probably resonate within that. It’s so easy to not lead a healthy lifestyle and feel the consequences. And you’ve been through that journey and turn the corner and beyond that to make an entire business out of it in a positive sense, transforming your life and the life of many others. So I can’t wait to unpack the details here, especially of this wellness brand on a global scale.
Cause I think as you are going to share with the listeners of Let’s Talk Loyalty. You know, whilst Virgin Active is more known globally than a Kauai or new brand, effectively it isn’t about fitness. It’s about fitness and nutrition. So I think before we get into that, because that’s for me, one of the most exciting parts of our discussion is.
Let’s think about the size of Virgin Active initially and then we’ll unpack Kauai and you separately. But talk about Virgin Active on a global scale. So, I know it’s very big here in South Africa, but it is global. So can you talk us through the size of the organization, number of countries you’re operating, number of clubs, number of members and so forth?
Dean: Yeah, absolutely. It truly is a global business, a market leading global business. So we operate in eight countries. That includes South Africa, Italy, United Kingdom, Australia, Singapore, Thailand, Botswana, Namibia, and just over 230 clubs across those eight countries. We are over a million members.
And then what’s really important is within those countries that I’ve just spoken about, we really, we’re in each of those major cities. So this incredible business with these amazing locations in cities like Milan and Rome, and Florence and Palermo, and London and Singapore, and Bangkok and Cape town and Johannesburg, Pretoria. I mean, literally everywhere. So we’ve got a real global presence, one of the, not one of the biggest global presence in the wellness space outside of North America, major cities, incredible locations within, in those cities. A very strong brand.
I think the it’s really inspirational DNA when you look at the Virgin brand and Virgin active and where they’ve come from and if it’s really well with wellness. And these are big full service clubs just to emphasize these eight countries, 230 plus clubs, big full service, premium clubs that have swimming pools, steam saunas. They, many of them have food and beverage like the Kauai is inside. And then as we’ve evolved the concept, obviously big gym floors, studios where you can do yoga, reformer Pilates, cycle boxing classes. So quite a diverse offering.
And then as we’ve evolved the concept, we’re moving into what we call a Social Wellness Area, Social Wellness Club where the social spaces as important as the exercise space is as important as the studios. And those are spaces where people can just come to meet friends and socialize with over a coffee or a smoothie or a healthy meal, but also if they want to work, these become coworking spaces where boardrooms, meeting rooms. So really this evolution of what was a typical gym space into what we call a Social Wellness Club, a space, a second space outside your home where people can meet, gather and generally just have a non toxic, healthier meeting space to socialize in.
Amanda: Wonderful. That’s amazing. It’s great to hear the transformation of thoughts around a traditional club, which is just sort of a sweat box and a place to work out versus, as you say, the social wellness experience for your members. And obviously that’s where the relationship with Kauai comes in and you’ve already touched on it in your introduction or your career path leading up to where you are today.
So as you said, there’s been a commercial deal between Virgin Active and Kauai, and I think Kauai is less well known globally. So if you wouldn’t mind, share with the listeners, please, a little bit about Kauai and a little bit about the deal that’s taken place between Virgin Active and Kauai and why it’s happened and how, I think you’ve touched on that, but how it’s come together to create a better proposition all around?
Dean: So Kauai is just over 200 stores and we have another brand called New Health Cafe. So between the two of them well over 200 stores, largely in South Africa and some of them inside Virgin Active. So there’s been a long standing relationship with Virgin Active, but Kauai does have stores in Thailand. It has a store in Amsterdam and recently has opened in a short space of time, six stores in London in the Virgin Actives.
But the idea for putting the two businesses together really comes from a strong belief that for wellness to be truly effective, it has to be integrated. And many of the offerings today come at individuals as separate components. In other words, there are people that deal with sleep, there are people that deal with nutrition, that companies that deal with fitness, but no one’s looking as the individual as a whole.
And the, what I’ve seen over time and experience personally, but also a lot of the research shows is that in order to get the best results, you need a holistic approach. It really doesn’t help if you train in every day, but you eat unhealthily or you don’t have good sleep habits or your mental wellness is not where it should be or vice versa. You could be eating incredibly healthy, but you don’t exercise and you sleep poorly. Your overall wellness is going to suffer. So we, we believe that we need to look at this holistically and the two fundamental, the two biggest foundations of that wellness with nutrition and fitness really made sense.
We had this relationship with Virgin and the Kauai was operating inside Virgin. We reached out, conversation started and real foresight from the Virgin Active shareholders and stakeholders in Virgin to embrace that wellness principle. And we managed to do a deal to bring the two businesses together.
What it really does though, from I mean, what we know that, as I’ve just mentioned that from a consumer point of view, from our members or customers point of view is that by embracing more than one vertical in wellness, they’re able to achieve results much quicker. So whatever the goals may be, someone may purely just want to lose weight for a wedding at the end of the month. If they eat well and they exercise, they’re going to hit those goals much better. Your goal may be to run a marathon. And once again, if you do both components and you eat well and you exercise, you’re much more likely to hit your goals.
So it really works from a consumer point of view, but the business logic behind that Is ultimately one of the big things that drive engagement and usage is results. I mean, people, if they go to the gym and off to six weeks, they see no results. They start to question whether they should be going to the gym. They get lazy, they get demotivated and ultimately can end up terminating their membership. But same if people eat healthy, but they don’t exercise. So will the healthy eating does nothing for me. It doesn’t help me achieve goals when we can.
By putting the two businesses together, we can help our customers and members achieve their goals and aims, whatever those may be. It really motivates the customer. And that motivation becomes like a flywheel effect as people get more, more motivated, they engage more, they use the gyms more and that usage case of increasing usage and driving up retention, driving the customer lifecycle is really the business case of why this thing really makes sense is we see a strong correlation between esults, motivation and usage and engagement and what that does for the business.
Amanda: You use the magic word there of retention, which obviously every loyalty professional uses frequently, but it’s great to hear you as the CEO, really talking that through. I mean, it’s fam, it’s famous that the club industry, the gym industry has a massive problem with retention, massive signups in January and then drop off. So how you’ve explained it, that they have to work together. I mean, I know personally from my own experience, if I’m not, if I’m running like crazy, but not taking care of my nutrition, then it’s pointless. So it’s and as you’ve translated it into how it works for the business to drive retention, to stop that leaky bucket, so to speak.
So as a loyalty professional and as we’re on the Let’s Talk Loyalty show, it’s very appropriate that we talk about how you have launched into loyalty and rewards with the Virgin Active Rewards. So I’m extremely lucky to be in the market where you’ve launched this first, which is South Africa and I’m loving it.
So can you talk us through the value proposition of what your members get from Virgin Active Rewards? What do they have to do to get those rewards? Just give us an overview so the listeners can understand what Virgin Active Rewards is all about.
Dean: So, so maybe before I get there, it’s important to understand what we were about, what Virgin and Kauai are about. And it really is, we want to change people’s lives through wellness, improve people’s lives through wellness. It’s what flows and it’s our why, it’s the reason we exist. So, we wanted to, how do we drive this? How do we really make an impact and get people to change their lives and change people’s lives through wellness?
So, and one of that, with that as our North Star and our guiding light is, well, then how do we make it easier for our members to meet their wellness goals. And we thought, well, how do we give them an extra reason to visit our clubs? I mean, people sign up in the beginning with the best intentions in the world, but we know that sometimes whatever life gets in the way and it’s family and it’s work and other commitments, and it’s a sports event and it’s a movie you want to watch, the things just get in the way.
So, so we want to just give an extra reason for people to visit the club. We want to give an extra reason for people to stay healthier. And that’s why we started to add, and the loyalty program is about adding tangible instant rewards to our members, just motivating, giving them a little extra push on why they should come into our gym a few times a week. So the very simple mechanism is around. How do we drive usage? How do we get people into our clubs on a frequent basis? And we rewarding people for that, reward people quite simply. If you access our gyms twice a week, you immediately get an instant reward. That can be a quiet smoothie, a Kauai coffee. We have a supplement partner on there so that the member can choose after that second visit.
What is the reward? It’s instant, it’s tangible. You can go redeem it immediately. It’s not like building up points where you’ve got to wait for a future and a big event, and it takes time. This is real instant gratification rewards, and it really does start changing behaviors and motivating people to come to the gym twice a week.
So those are the simple weekly rewards, those usage rewards. In addition to that, to the weekly rewards, we also want to reward our members for consistently achieving those weekly rewards. So we have something called a Sprint Award, which really rewards people with an additional road on a monthly basis. In other words, if you’ve achieved your weekly reward four times in a row, you get a Sprint Award, which is an additional set of rewards there. And then on top of that, we have all the traditional each time you access the club, you get points, those points convert to wallet balance, and you can use that wallet balance in fact, to get a discount on your membership. So you can reduce your next month’s debit order. If you pulled up sufficient, you can have a debit order holiday effectively or two months holiday, depending on what your wallet balance is.
So, and then we have tier status, which unlocks a whole lot of additional benefits from partners, from ourselves, depending on your tier status. But I think that the most impactful part of our program is this instant gratification. It’s just twice a week. Just enter the club twice a week, and you have this tangible reward in your hands working with our members to drive that behavior around usage.
Amanda: Wow. How thorough is that? So what I’m loving about listening to this, for example, in our annual white paper that we release, we see consumer behavior skewing towards either instant gratification and, or saving up for big, longer term rewards. And what we’re, what I’m hearing from how you’ve just described Virgin Active Rewards is exactly that, the ability to do both.
And the interesting fact that comes through our research is that the same consumer often wants both. You’ve just got to work out and it’s complicated to work out. So in what you’ve described here, it’s meeting your business objectives of frequency and consistency, but obviously engaging with the customer on that regular instant gratification, but also longer term rewards. Like I love that payment holiday on your monthly membership
Dean: To your point, I mean, it’s exactly that I think we’re very fortunate in that we didn’t have to make, we didn’t want to make a decision in between. It’s either a longer term points top build up and a longer term reward or were able to do both. And by doing both, once again, we’re in this fortunate position is that the, if we are able to improve people’s lives, if we are able to drive usage and get people into our clubs, which improves their lives, improves their wealth, it’s incredibly aligned with our business objectives. So this is one of those unique stories where the business objectives and the commercial objectives are totally aligned with our members. If they get healthier, the business does better.
Amanda: I love that. So one of the questions I wanted to ask you, which you’ve covered off nicely around, well, why did you go into loyalty? And I think you’ve started to explain that, that actually you’re not misaligned business wise from what consumers will, you know, they’re running in parallel, but running to support each other. I mean, if you look at commercial or KPIs of the program and how it’s quite a young program. So how are you initially performing against your initial objectives or KPIs?
Dean: So, so exactly, as you said, I mean, important KPI for us is around, how do we drive this consistent positive habit of getting people into our clubs, how do we give them this extra reason? And as I explained, that’s the weekly reward that we offer them. Eh, so a key metric for us to look at is usage.
If we look at and in the gym industry, you are at risk members. Your members that are at risk of terminating, or members that are not using the clubs or using the in clubs infrequently, they don’t see value. They don’t believe they and rightly so, why should they pay a membership fee if they’re not using the clubs?
So we identified a cohort of people that will use in the clubs in the 12 weeks prior to registration on the app, one or less times per week in the 12 weeks prior. And then we looked post registration for the 12 weeks post at that at risk, that low usage cohorter and pre-registration on the app for that 12 weeks, the average usage was 0.4 times a week. And then post registration in the 12 weeks after that, move from 0.4 times to once a week. So those cohort of people, once they loaded and once they registered on the app, started to use the clubs at least once a week. Where there were 0. 4 times before. Now that is an incredible statistic.
First one’s 164 percent increase from 0. 4 to the one times a week. So it’s incredible improvement, but more than the percentage, what it means is someone that is using, as I said, the gym once a week is far less likely to terminate their membership. From a retention point of view, we seen an immediate within three months, a real immediate benefit in terms of the business objectives of driving retention, improving retention, reducing churn. At the same time we helping our members form that positive habit more than the gym every single week. So once again, I refer to this incredibly strong alignment is that we actually making a difference to people’s lives and we drive in a key business objective for Virgin Active, which is around retention.
Amanda: Thank you for sharing that. I mean, it’s great to actually put real stats on the table. So 164 percent increase is a dream for anyone looking after a loyalty program or any membership base. But as we’ve known, you know, retention is such a difficult, difficult play in some industries. And I think whether you’re in insurance or traditional health clubs, it’s certainly been an area of focus. So to see that and to see those results of 0. 4 per week up to once a week. And I’m sure there’s a lot of energy going into helping those members be able to get to that twice a week so they can enjoy the war, the weekly rewards. Wonderful.
So given that you have. started the journey into actually using a robust program and with great results initially in the South African market. What are the global rollout plans? You know, you’ve said already you’re operating Virgin Active in eight countries. So where to next?
Dean: So, I mean, we specifically designed the loyalty proposition and the app as well to be applied across territories. So, it’s a real single proposition that we can roll out across territories. Currently, we’re just adding some additional features into the South Africa loyalty and app, which will be completed in the next three or four weeks. Thereafter, in the first quarter next year, we will be doing the United Kingdom. So we’ll roll out the loyalty and the new app into the UK. And the beginning of the third quarter next year, we rolled it out into Italy. And then early in 25, we do APAC, which is Singapore, Thailand, and Australia. So, so post South Africa, the first territory, United Kingdom, and then into Italy.
Amanda: Great. I’m sure those members are waiting in anticipation.
Dean: I mean, what’s important, I suppose, as well is, we are bear in mind, obviously we’ve got the partnership in South Africa with Kauai and we’ve got many Kauais inside our gyms. What the rollout in the UK and Italy does as well, it does coincide with a rollout of Kauai inside, as I mentioned, Kauai is already in six clubs in the United Kingdom, but there’s quite an aggressive rollout in the UK and Italy next year.
So the rollout of the loyalty program does coincide with the rollout of the Kauai stores. And therefore this partnership and the ability to offer Kauai roads, which is really compelling fits really well with the loyalty rollout.
Amanda: Yeah. Lovely. It makes absolute sense. Great. And I think the members around the world and UK and Italy are going to be excited for next year and then APAC 2025. Thank you for sharing that. And thank you for sharing the timelines of your rollout. So we’re going to be watching that and probably invite you back in another 12 months to give us another update.
Now many of us who listen to the show or involved in loyalty know that it’s not easy to turn this on. It’s not easy to create a loyalty proposition, particularly across brands that have so many different interfaces. I know in South Africa, Virgin Active has got some great partners in the marketplace. So to pull that off, it’s complex, can you give us a sense of how you approach the technical infrastructure and the ecosystem to bring all this to life for the, for your members here in South Africa and obviously going forward around the rest of your territories?
Dean: So you’re absolutely correct. I mean, it’s the second time I’ve done a major loyalty program and a new app, and it’s always complex. And as much as you learn from the first one, it just is an incredibly complex and difficult process to, to roll out incredibly rewarding. But it is complex.
We see the app and the loyalty and the rewards program is a very, very significant differentiates. I know many industries, hospitality, food and beverage have quite established loyalty programs in the gym space. They’re not established loyalty programs. And we, one of the first movers in the loyalty space and integrated with some unique functionality in terms of our app in the gym and the fitness space.
So, so because it’s such a major differentiator and so important to the future of our business and how we engage and with our members and our personalization journey, that we decided that it was important for us to own the skills base and build this technology and RP within our own business and capabilities for ourselves. We did work with a lot of leading providers to support the design and the development. But we made sure along that whole journey, we were building up RP and skills, and there was a transfer of that skills mileage to a team within the business.
So, we used from specifically from a rewards program. We didn’t go and build our own loyalty engine. We used a third party platform there and we had to configure that and ensure that it matched with our business objectives and could integrate with our member management system and our app in a seamless way. So really complex technology project, trying to own as much skills as possible, but also being where it made sense integrating through API’s with downstream third party providers. So really a multi system platform but everything we do, whatever systems we do, we pull all the data together into one central, one central place. The data I’m sure we’ll discuss later is incredibly important for us.
But I do emphasize like, like in, in any training program, we, it takes a while you start our training to some days when you’re a bit stiff and store and as you get stronger, you get fits and you build muscles. And it’s the same process with the app is. As you move along, you certainly have some bad days and you stuff and so on, and we certainly haven’t, and it’s a long journey ahead, but we recognize and we pick up our mistakes quickly. We have the in house capabilities and teams now that are making changes as quick as possible, bringing out new versions where problems are found.
I would be lying if I said it was a smooth launch and an easy launch. As we said, it’s complex, but I think we picked up errors. We’ve significantly improved this constantly new features come out. But I think for us, certainly it was important to make sure we brought those skills in house and we continue to evolve and develop those skills in house.
Amanda: Well, I mean, you know that I know some of your team extremely well. In fact, one of them used to work with us at Truth. And yep, you’ve got the A team there. So it’s great to see you build that capability. And I know the industry’s watching. So, I’m sure they’ll be super excited to hear what you’ve just said.
And I love what you’ve just said around how building a loyalty program is like when you’re on a fitness regime. So I know full well, after a lot of running training, I have days when I can’t walk and I feel like that sometimes on some projects. So great description there. So thanks for pulling them together.
Okay, so that’s the back office, so to speak, in terms of how you brought all this complexity together for your customers. Apart from the rewards themselves and feeling, you know, great that you’ve achieved XYZ and got a free smoothie or got a payment window, what else has improved in terms of the member journey? Because you are really in the service industry. You’re really in the experience industry. How has the member journey improved through this process?
Dean: You’re totally correct. I mean, the loyalty is a function within our overall app and it’s an important, really important function. I mean, to have the app without the loyalty, I think is really difficult to drive engagement and usage of the app. So they’re really one in the same, the loyalty program and loyalty, it lives within the app and it real drives engagement. But at the same time, the app, it was important for us as, is to understand what are members really want from that app is how do you use this digital device to improve the experience in a physical space.
And then also how to encourage engagement outside of our gym. People typically come to gyms anywhere from once, twice a week for one to two hours up to even if it’s five, six days a week for one to two hours, it’s a relatively short time you have them in your space. So it’s important for us to have a tool that enables us to engage with those members outside the gym space. And that becomes the app.
But when we looked at the app initially, it was just the basic member journeys. I mean, I think a lot of people are designing apps with a whole lot of functionality. That’s hardly ever used. The first understood what is really important. It starts with just simple thing. Like how do you enter the club? You know, you no longer need a credit card entry system. We use the app. There’s a an access code on the app and that becomes your entry device as well. We know people like to book classes and there’s often a waiting list and demand for our yoga classes or a form of Pilates or cycle or box.
So we wanted to make sure that the app clearly showed what classes were available. Who the instructors were the intensity of those classes, and then just a seamless, easy way to book online. So we talk about access, talk about booking systems. Someone wants to use a personal trainer, the ability to search and find a personal trainer. That’s good for them. And then obviously, as we’ve spoken about part of the app is the issuing of rewards, issuing of vouchers, and that has to be done. Seamlessly and easy because our benefits don’t acute that some of them accumulate of time, but most of them are this instant gratification.
They need to show up very quickly. Things like refer a friend or important to us. So, the referral program that lives inside the app, very easy for someone, if they want to send. A an invite a friend for a friend to come train with them to experience ability to send that through the app is important for us.
And then reward the member that actually sent the invite a friend, because that becomes a potential lead for us. So, we will continually involve the functionality, but as I said, I think it was important for us to understand what will improve the member’s experience immediately in Clubber on access, class bookings, PTs, uh, redemption of their vouchers, and those are the things we’ve initially focused on.
Amanda: And I love the way you’ve, I mean, I’m relieved and you’ve done this superbly, just kept it all in a single app experience. There are some loyalty programs that start to live outside of the main brand app and that never seems to make sense. So the fact that everything comes together in one single experience is the way it absolutely has to be. And you’ve done that perfectly. So, yeah, thank you for sharing that. And it’s just little things, you know, like everyday experience of using using one of your clubs, being able to have the whole experience right there, right at your fingertips.
So you mentioned data earlier, and I know, I mean, I, you and I had a chat a week ago just to check everything for today. And I laughed with you saying about a hundred years ago, it felt not quite 10 years ago. Truth did some work with Virgin Active way before any of these strategies came to play and there was a gold mine of insights, even then within the Virgin Active data and some great insights turned into lovely member communication plans.
But now you’re sitting on this new level of insight, this new approach. You’ve got customers engaging with you through the app. It’s not just about turnstile records as they come in and out of the club. So what is your strategy around data? How does it fit within the broader business strategy?
Dean: Data is absolutely critical for not only for us, I think for most businesses today. I mean, we go back to this discussion around retention and retention is around us understanding our members. What are their goals? What are their needs? What are they like? What don’t they like? And then the transactional side of that. Which clubs they access, what time of day they access the club, which classes they use, which personal trainers, all of that data that we need, but the app and loyalty are only one source of data.
We digest data from a whole lot of different sources and that ultimately give us and come into a data lake. And then we have the single view of our member. And that single view is so critical for us in terms of building up this connection and building up this level of trust and this emotional connection with our members. And it’s this emotional connection that is really the long term driver of customer lifetime value. These real members know that we understand why they train, what their needs are, and then we can deliver something really personalized that helps them achieve those goals. So we have all this transactional, this first party data.
We are big believers in zero party datas, some trade exchanges using the app, using loyalty to get a little bit deeper in, into not only the transactional side of when and how and what they’re using, but why do they use the gym? What are their goals? Understanding those goals and then delivering something as a, as I said before, meets those goals there.
So we want this real time view of our member data. It needs to be real time for us. We wanna know as soon as you finished a class, we need to be able to send you a half aft so well done on that class. We know you’ve booked a class for tomorrow. We want to send you the reminder the night before to say, Hey, have you packed your trainers in your bag? Are you ready for tomorrow? So it’s a real time view of our members to be able to provide this relevant personalized engagement with our members.
Amanda: Amazing. Wow. Some great real experiences there, but translated from not only the customer experience that is enhanced because of the data, but also how it drives clear performance for the business. All because of the data. And it actually matches everything you’ve said from the first, second we started chatting around. The whole program works for the customer, works for the business, the whole proposition works for the customer, works for the business, and the data strategy improves everything for the member and improves for the business. So I think you’ve absolutely got a on point strategy that works without question.
Now, I did mention earlier around Virgin Active, particularly in South Africa, has worked with partners and a lot of loyalty programs have great partnership strategies in place. How does, how do you see the future of Virgin Active with the partnership ecosystem you have, and how important are those partners to the success of A, the new rewards program and B, the broader business proposition?
Dean: Look, I think even beyond the loyalty program personally and the company is a big believer in partnerships and collaborations, ability to work with like minded, but also different people on different projects from different industries. And I think we all get stronger if we are able to collaborate and not be so territorial and scared of competitors and other industries. So, so collaboration is a really big part of how we work internally and how we work in externally.
So, so we embrace partnerships. We don’t see our loyalty program trying to compete with any loyalty program. We think having other partners that offer two different pieces of the loyalty program or even similar pieces and members can effectively double dip across both of those just as a benefit to our members. And we’re not trying to move someone off one program to another program. These programs all work well together. It just ultimately benefits our members if they have other programs available.
So we want to work even closer with our partnerships with existing partners, Virgin with Kauai and Virgin with Vitality. We’re working with new partners like Biogen, for example, who’s a supplement provider. So continual partnerships, continual collaboration, bringing more and more partners, people getting involved. Ultimately, we’ve got one objective is as I said, right up front, we want to change people’s lives for the better through wellness. The more people that can come on this journey, the more partners, the more collaboration we have, the more successful we’ll be in improving people’s lives.
Amanda: Incredible. Every customer’s up for a double dip or even a triple dip. You know, some of your brands really do overlap. So, and it’s lovely to hear you say you’re not trying to outplay the partnership program. They can coexist because often that is a source of a new kid on the block and your rewards program is relatively new, comes into an environment that has programs that have been in place for a long time and it’s great that you can see them coexisting and they clearly are and clearly adding benefits for the customer.
So, Dean, thank you so much. Is there anything else you’d like to share with the audience of Let’s Talk Loyalty?
Dean: No, man, I think you’ve done a really good job in covering all the points. It’s been great to talk with you and get some of your input. I know you add a lot of value. And as you mentioned earlier we have some people working with us that I think have learned from you and your team. So everything covered and appreciate the time with you.
Amanda: Well, thank you. I think for everyone who’s listened to your story today, Dean, I mean, it’s been a real masterclass for loyalty professionals. We’ve talked about single view of member. We’ve talked about retention. We’ve talked about customer lifetime value, real time view of member data, personalization. I mean, I could just keep going. Keep going. So anyone who’s listened to this, I think we’ll have taken a million notes and we’ll be using them in a million presentations for the future.
So I just want to personally thank you for your generosity of what you’ve shared with the listeners of Let’s Talk Loyalty. It’s an incredible brand story and incredible partnership story and an incredible customer loyalty story. So thank you very much and well done and good luck for the future. A lot ahead of you and your amazing team, and we know you’re going to be a great success. So thank you.
Dean: Thank you. I really appreciate the time.
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