Case Study: Fitness and Sports Club Chain

Case Study: Fitness and Sports Club Chain

 

Problem
This multi-location Fitness and Sports Club Chain was faced with diminishing business results in the early stages of the recession. Allocation of marketing dollars to the most cost effective and productive channels was key. The goal of the project was to develop statistical models that could aid in understanding the relationships between marketing expenditures, key operations metrics and external factors.

Approach
Our ROMI (Return On Marketing Investment) suite of tools was utilized to determine which activities were working and which were not. ROMI not only analyzed the direct impact of specific spending but also the interaction of multiple channels. As importantly, this tool evaluated the impact of external (non-marketing) factors (e.g. unemployment, stock market, etc.) on the effectiveness of those activities, which was particularly important in the face of the recession. The analysis utilized multiple modeling techniques including Genetic Modeling, Graphical and Regression Modeling and Structural Equation Modeling to create a broad picture of prospect leads and member joins.

Results
A clearer understanding of the “optimum” marketing mix was developed. Recommendations were made for shifts in spending, enhanced processes and improvements in some measurement tools.

A planned reallocation of acquisition spending was stopped when it was shown that a more effective approach was possible. Marketplace results from the revised approach have helped stem the decline during the recession and provided a solid base for growth going forward.