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Venture-backed tech company seeks to turn data into revenue for health clubs

  • Media Coverage

Originally Posted on Clubindustry.com

Imagine you have a member who regularly attends your health club’s 5 p.m. Monday yoga class as well as some of your livestream classes. Now imagine it’s a snowy Monday, traffic is backed up around the city and your member likely won’t make it to the 5 p.m. class. How would she react if you emailed her to recommend that she skip the in-person class and instead attend the 6 p.m. livestream yoga class from the comfort of her home? She likely would be impressed that you knew her well enough to make this suggestion.

Offering personalized recommendations to all of your members could help increase member engagement and member retention, leading to greater revenue for your business.

Club operators have the data needed to make these personalized recommendations through member relationship management systems, class schedules, OTT livestream schedules, mobile apps and third-party data. The issue is that most club operators don’t have the ability to connect all the data in a system that can make personalized recommendations.

That’s where CIPIO comes in. A venture-backed customer intelligence company, CIPIO recently completed a $2 million pre-seed round and will soon start their seed round, according to Growson Edwards, co-founder, and CEO of CIPIO.

The company’s pre-seed round was led by DX Partners along with a team of investors that include Linda Abraham, managing partner of Crimson Capital; Vineet Goel, senior director of BI and data analytics at Visa; Kathy Holmes of Arcola Investment; Ketan Karkhanis, chief product officer of Turvo (and ex-Salesforce general manager and senior vice president); Karl Rumelhart, chief product officer of Gainsight; and Bill Schmarzo, data science and data monetization strategic advisor at Dean of Big Data.

CIPIO is using the funding to innovate and invest in creating value out of data to generate predictions and recommendations to help clubs grow, Edwards told Club Industry. CIPIO provides a domain-infused customer intelligence platform that humanizes and automates predictions and recommendations for B2C businesses to increase customer engagement, retention, and growth, thereby allowing them to truly understand their subscribers/members, create and capture new value, increase retention and boost revenues.

These granular predictions and recommendations are integrated into the customer’s back-office/engagement systems to operationalize CIPIO’s AI capabilities to ensure maximum financial outcomes.

“There’s a lot of intelligence tools out there, but we also have this belief that all of this data is just dying on the dashboard,” Edwards said. “Nobody knows what to do with it. How do you turn that data into actionable intelligence? That’s really what we’re focused on because by making it actionable, we can help a gym actually grow.”

CIPIO also is focused on measuring the impact of these predictions and recommendations on a health club’s key performance indicators related to acquisition, retention, and growth, he said.

Edwards and co-founders Manoj Kumar Goyal and Dharmesh Trivedi are offering club operators a free trial on the platform.

“We don’t expect customers to start paying us until we’ve proven an ROI until we’ve proven we can increase their retention rates, or how we can increase their upsell/cross-sell rates through optimization,” Edwards said.

The platform collects data from a club’s MRM system, club management tool, OTT platform, marketing automation tool, mobile app, and even member survey systems to offer a unified view of all of the club’s customers. CIPIO then uses artificial intelligence to identify individual member/subscriber patterns and behaviours and to make recommendations about how to engage them.

And they do so not just for the in-club services but also for the on-demand offerings so club operators can better understand how members are using the online offerings compared to the in-person offerings, their patterns of use, and their purchasing decisions.

In addition to focusing on the predictions and recommendations, CIPIO also focuses on measuring their impact on the club’s KPI as it relates to acquisition, retention, and growth, Edwards said.

CIPIO is analyzing more than two million members and subscribers in the fitness industry. As that number grows, it will give them more data points about patterns and behaviours of individual members and subscribers that make the company’s machine learning and AI algorithms that much smarter.

CIPIO’s early adopters include AKT, Club Pilates, Crunch Fitness, Cyclebar, Motor City Church, NCFit, Pure Barre, RowHouse, Stretch Lab, Stride, World Gym, Xponential Fitness, and YogaSix.

One of CIPIO’s first customers was Al Noshirvani, CEO of Fitness Club Management. The owner of three World Gym locations in Dale City, Virginia, and two in St. Mary’s County in southern Maryland began using CIPIO in late 2019. Noshirvani, who also is the founder of Motionsoft, previously worked with Trivedi when Trivedi worked at Motionsoft.

Even though club management software companies have a lot of useful reports, Noshirvani often had to spend time combining multiple reports in Excel to get data that could be used to make decisions, he said. In addition, the CMS reports are good for providing insight into the operational performance but don’t incorporate deep analytics.

“We needed a system that did more than that,” Noshirvani said. “I challenged CIPIO to look at our data and give us more.”

With the CIPIO system, Noshirvani has focused primarily on performance to budget (sales, cancellations, non-dues, etc.) and retention of members.

“The big payoff came a few months ago when they delivered a report that gave me insight into the top 100 members likely to quit and the top 100 most valuable members for each of my locations,” Noshirvani said. “We have now implemented operational and communication protocols to help us keep these members no matter which end of the spectrum they fall into.”

Xponential Fitness launched CIPIO in mid-2020 in the heart of COVID to scrutinize its digital experiences, Garrett Marshall, president of fitness streaming at Xponential Fitness, shared with Club Industry. In particular, Xponential, an aggregator of nine boutique studio brands, has been inspecting the types of programming used, various digital cohorts (and the similarities and differences between those), and how its product releases have impacted digital engagement.

The company didn’t have a system that could report or predict across all of its product experiences such as physical, digital, and all the variations of those at the global, national, and local level, Marshall said.

“We’re using CIPIO to get an understanding of how a single customer consumes all aforementioned,” he said.

With CIPIO, Xponential’s brands are constantly learning how to make more impactful content—from the style of production to optimal streaming times, to which instructors actually increase views, he said. In its digital business, a view is the best leading indicator of engagement and therefore length of stay. The more views the content generates, the greater lifetime value.

Xponential also is getting a clearer picture of how to use its various product experiences harmoniously to serve different purposes in the funnel. That could be a customer who first engages digitally having the opportunity to take part in an in-studio experience at an Xponential brand or vice versa.

CIPIO is focused on how to help gyms thrive in hybrid engagement, Edwards said.

“Everyone has this on-demand or live-stream model married with their in-club experience, and I think it’s gotten even harder for them to understand customer engagement,” Edwards said. Gym operators need to know when their members or subscribers are using their online offerings vs. coming into the gym and their patterns and behaviors around that.

“We’ve gone to great lengths to develop strategic partnerships with the club management platforms and the OTT platforms, so we can give a hybrid view and understanding of the customer,” he said.