Predictive Modeling

October 4, 2021

Data-driven Marketing for Profit

Predictive modeling is a phrase we at Instinctive Insights use with ease, though many of you may wonder what it really is and more specifically, how its use will benefit your club.

The short answer is that predictive modeling uses statistics to predict future outcomes. In the world of health clubs, outcomes are typically defined as new and returning members.

In order to establish predictive models for health club clients, data must be collected on current and former members. The data is then cleaned, sorted and filtered through algorithms that include psychographic, demographic and transaction data points that align with interest in fitness, wellness, healthy living and so on.

Key commonalities current members share with prospects are identified and Personas are established. Personas are, simply put, buckets of people who typify ideal members of a particular club, and are often segmented as families with children, seniors and young professionals. Smart marketing decisions are now able to be made regarding who to engage and beyond that, which channels are worthy of investment.

Predictive modeling kicks in once campaigns have matured, and fresh data is available. The match back process assigns each new member to its previously determined Persona to calculate ROI for the campaign under review. This also puts the algorithms to work.

Algorithms automatically adjust to campaign results and select the “best of the best” prospects for future campaigns. The models are predicting the likelihood of marketing success the next time around and when averages, like joining fees, monthly dues and length of membership, are included in the equation, potential profit is calculated.

The benefit to club operations is that by using predictive modeling to plan upcoming campaigns, operators can confidently invest the appropriate time and money into marketing efforts.


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