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Making Membership Services Fit for Purpose In response to a sharp increase in membership numbers, budget UK health club chain Fitness4Less developed a sophisticated in-house system that allowed them to manage all subscriptions and collections. We speak to them about the challenges of implementing such a system.

Making Membership Services Fit for Purpose

by Emma Edwards, Marketing Director, Fitness4Less

Fitness4Less was founded in 2005 as a pioneer in budget health club services offering a new business model differing from those of existing providers and offering greater flexibility in membership plans for our members. By the nature of our business, we operate within tight margins, so it is essential that we can automate the collection of member subscriptions as far as possible to minimise manual intervention and the need to dedicate administration resources. When the business first started, we researched the market for suitable applications but discovered that there was no single vendor that could support this objective.

Consequently, we used our internal IT resources to develop an efficient collections process, combining a variety of third-party tools. While we were able to manage our own subscriptions, we could not complete the whole process online. We therefore made the decision to work with a Bacs service bureau that had an online solution to which we could route users of our website in order to make payments and set up direct debits.

Fitness4Less business description

Challenges and objectives

This solution proved very successful for a number of years, but by 2012 we were facing two key issues. Firstly, we had experienced significant growth in our membership base. The pricing structure that we had set up initially with the bureau was based on transaction fees for each new and recurring collection, so our costs were increasing without economies of scale. Secondly, we had introduced a variety of new technology such as biometric identification at club entrances and a new website. We wanted to ensure that the subscription and collection services we offered to customers were fully integrated and consistent with our suite of member services. Consequently, as we moved to the next stage in our growth strategy, we recognised the opportunity to review our processes and technology.

We researched the collection solutions that were available in the market with the aim of reducing the cost of collections and improving the service we could offer to our members. For example, although accessing the services offered by a bureau had been very valuable during our early years, it was becoming increasingly apparent that we needed to be able to manage the entire customer relationship in-house. Members found it frustrating to have to deal with a third party for direct debit issues, or if automated entry to their club was disallowed due to a failed direct debit. We do not have telephone customer services but our online customer service teams were experiencing a relatively large number of customer queries relating to payments. We were therefore seeking to manage all aspects of subscriptions and collections in-house rather than outsourcing parts of our member services.

Implementing a solution

We found that even though seven years had passed since we first set up our subscription and collection service, there was still no single tool that offered all the capabilities we needed. For example, as a 24/7 business, we needed to process direct debits at any time and integrate our collections data with club entry criteria so that members could immediately access their preferred club following successful payment. As part of our evaluation process, we approached Fundtech, which had a highly competitive collections solution. Fundtech was enthusiastic about Fitness4Less’ innovative business model and was willing to partner us in developing its solution to provide the additional functionality we needed.

The development and implementation process of a new solution took around eight months and was inevitably challenging at times. With around 67,000 members, it was crucial that the transition process was flawless, so we took a systematic approach to testing including a pilot project with a defined group of members. Rather than migrating all of our existing customer data to the new system before going live, we switched to using the Fundtech solution for new members to get more rapid benefit from the new system, with a parallel project to migrate existing member records. This gave us time to work with our incumbent provider to standardise and transfer existing member data without postponing the value we could gain.

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