The Gold in The Data - Ian Mullane

The amount of times we've seen people up there talking about retention this, retention that, methods this, methods that, it's not working. This is an industry which sees 60% of its clients walk out the door every single year. They're all right with that. And you know what? They can be because they've got more coming in through the front door. The reality is that's starting to stop.

What's up, Fitness fans? Welcome back to the Future of Fitness Podcast and Interview Series. This is your host, Eric Malzone, and this is episode number 161. I talked to Ian Lane. He uh is out of the UK. Um is the CEO and founder of Keepme.ai, which is a SaaS platform uh for retention for gym owners of all size, from uh, you know, big 4,000-person health clubs to boutiques, and uh it's an interesting software. And most of all, Ian I would say is is a problem solver, really. And that's what he looks. He does. He looks for unique problems to solve and he gets after, he does it quite successfully, and his insights are really cool. I love this conversation. We talked about artificial intelligence, he talks about the obvious importance of retention, but how that's gonna come uh even more into play. Um, I think we both agree as you know the economies are growing, but we're gonna get probably stunted for a while on what's gonna happen. Um, and retention is gonna get an even bigger uh focus, and rightfully so, right? I mean, retention's everything. Um so yeah, really good stuff. So many nuggets in here. I hope you really enjoyed it. And before we get on to, we have a couple sponsors, of course. Uh level five mentors, L-E-D-E-L number five mentors.com. Um Ken and I started uh doing business coaching years back, but we've actually formalized it behind uh a company and a brand and a system. Um unique workshops, uh, online community, 1v1 coaching. It's all rolled into one thing that is just appealed for one specific reason to leverage our experience and insights in networks to help you grow faster as an entrepreneur. So it's awesome. Go to level5mentors.com. We are taking free consultations right now, and I would love to hear more about you and your business just just because I love I love talking about it. I love talking about entrepreneurship, I love talking about the fitness, health, and wellness industry and seeing the shifts because it's a really exciting place to be right now. So hit me up at level five mentors and we'll we'll grab a call and uh I can learn all about you. Uh next is certifiedcoursecreation.com. So Kate and I once again have been doing this for uh a little bit. We've pumped out some great certifications and we're looking for great partners moving into 2020. So if you have a great idea, if you have a concept um that you think is worthy of an accredited online certification, I would love to hear from you. And you can go to certifiedcoursecreation.com because it's a way to A leverage yourself, B, stop training your time for money, and C make a huge impact, right? And that's what we all want to do. We want to change lives. So you can change lives for the better at a much higher magnitude uh with a great online accredited certification. So go to certifiedcoursecreation.com and one more thing, a request if you haven't yet. Uh I know people are listening, right? So if you haven't yet, go to iTunes, go to wherever you listen to this, and give me a give me a nice review. I'll read it on air. It goes a long way, and uh I really appreciate it. And you know it would make me happy and I'll read it on air. So without further ado, episode number 161, Ian Mulane of Keep Me.ai. Enjoy the ride. A lot. Ian, welcome. Hey, good, great to see you. Yeah, man, this is awesome. Um, you know, as always, great chat before recording, probably stuff people wanted to hear, but we didn't record it, so we'll have to go over it again. But thank you for making it um on the show. I know it's a little bit later over there in the UK, and I'm I'm really excited because you have such a um you have a unique background, you know, coming into the fitness and health space. You know, a lot of people are are, you know, I'm sure it's been part of your life, but you came from a lot of different backgrounds, a lot of different companies. So I guess, you know, a great place to always start is you know, give us your story, how did you get to where you are, uh, and then we'll get into uh what you're doing now.

Sure, okay, let's start there then. So um my background is predominantly in finance. So it has been for the vast majority of my career, and I'm gonna give me a good indication of age here, but you know, north of 20 years, most of my career was involved in trading and risk management. So I'm predominantly the provision of platforms for predictive technologies, risk management. So I'm more likely to be working the likes of Goldman Sachs, JP Morgan, Morgan Stanley than I am with a fitness organization. Um that's giving me an opportunity to travel around the world, and I've had stints in both the US, the south of France, and then Singapore. Singapore is where I landed in 2003 with a wife and a six-week-old son at that particular stage. And um I was kind of at the nexus of career at that stage. I was uh the chief operating officer of a US corporation called Sunguard, an SP 500, and that's all I'd really ever wanted to do was to run a large technology business, running it in Asia Pacific at the time as well. Very exciting, exactly the type of thing that I'd want to be able to be doing. Um by 2007, I can specifically remember being in a meeting and realizing that this wasn't where I wanted to be anymore. Um, I couldn't in any way get excited about another year in that organization. I didn't feel my values were aligned with any of the individuals sitting around that boardroom table. And I can remember phoning a mentor on the way back, uh, his name's John Andrews, and he's since gone, unfortunately. And John took the telephone call and I said, you know what, I'm done. And he he laughed and he said, and what are you gonna do next? I said, I have absolutely no idea. I returned to Singapore, I resigned two days later, and I fortuitously, and have a very supportive wife, I fortuitously um had become involved in boxing as a way of fitness. It was something which had taken me as a mid-30s, overweight, smoking individual down to uh, I would say a relatively spelt and startingly athletic again, fit person, right, over a period of years. So I decided that I would try and build myself a gym more for myself and a couple of friends because the facilities in Singapore weren't always there when it came to boxing. Um Eric Levine and the team had all been out that stage and they were building California fitness, but no one was putting boutique stuff in in those days. And I found a slot in an old grandstand, a racing grandstand at a race course called Turf City. And when they told me the price, I looked at them and I thought that price is wrong. Now, Singapore property is extortionately expensive, and these guys were gonna be selling me around about 70 cents a square foot. So I took 20,000 square feet. I went home to my wife and I said, I've just signed the lease for three years for 20,000 square feet. And I said, And I'm gonna open a boxing club, and she said, No, you're not. And I said, I am, and she went, right, okay, we need to make this work. And I went, I know, I want a really big boxing club. And it's like, for you and your four friends, no, it's not happening. So we sat down and my wife had identified an opportunity for an indoor playground for children, and we put in what was uh at the time the largest indoor playground that existed in Singapore for children with soft play. And at the end of it, in this windowless room of no more than a thousand square feet, Banda Boxing Club was formed. And yeah, when you look back now and you paint your narrative, you think of it as a boutique, but realistically, it was a room with a boxing ring, in itself, the first in any boxing club in Singapore, even though Singapore had a national boxing team. But more importantly, or as importantly, what it also had was the ability for anyone to go come and go 24 hours a day. We had biometric, and it was myself, number of friends. We'd go in, we let ourselves in, stick the iPod in, play the music as much as we wanted, and we had this great place. Roll forward, um, roll forward five, six years, it's 2,000 members and it's a 10,000 square foot CBD facility. Um, it's called Vandadot Fit. It uh was a business that was very much dedicated towards utilising boxing as a fitness system, but in an environment where anybody could participate. Um, so we would utilize it for um anything from professional to amateur to people who genuinely wanted to go into an environment which had the best equipment, great instructors, and was the type of fostering environment where people could go. Um it built a lot of passion, and for me, it built an interest, but it was never going to be a financial interest from my perspective. We exited from the soft play, we were lucky enough to uh have a liquidity event and be purchased on that particular aspect. Um, and in around about 2014, I founded a business called Locowise, which is a social media analytics platform. I did it again because Vanda, by that stage, had become a sports marketing agency. We were working with the likes of um Everton Football Club, Manchester City Football Club, the New York Cosmos when they were coming back into line, right, from the US soccer, and also Formula One. And with social media coming online, one of the primary concerns I had, coming from an analytical background, was I really struggled to find a way to show the return that social was giving to these brands. So I looked around, couldn't find the tool, and did what the people do, and you've got this mindset that I have, which is I built one. So Local Wise was born, and Local Wise is and still is a very strong social media reporting tool to demonstrate performance, understanding which content performs best, and overall report at an agency level. So it's used by many of the big agencies in the world and many of the big brands in the world as well, such as BMW. Coming to 2017, um we got to a stage where my involvement in Vander was no more than update calls. Um, I was trying to understand how the team is doing. But when you looked at it from an objective perspective, when you weren't in the trenches on a daily basis, what became apparent to me was that growth was slowing considerably. There's two certainties in Singapore is that costs will always go up, right? And that you will also see salary costs will increase. And that means the PL has very little flexibility. So unless you've got good control over the revenue, you can actually map out the time you will no longer exist. So when I took a look at what was happening, we were seeing a steady decline in the new members coming into the doors. But we were also seeing an increase in the cost of acquisition for ones that were. And the reasons behind that were simple, in the most basic form. When we arrived in that physical location in the central business district in Singapore, there were three competitors within 500 meters of us. Roll forward to this date, there were 19, and they have now subsequently gone past the 50 mark in that particular area. So massive competition. So what became clear to me was we had to do with what we had to be able to continue in the form that we did. So retention became the focus. Let's replay the story again. There's no tools out there, right? What when when I wanted the team to have a look at it, we could have a club management system, we had our mail chip, we had our marketing, we did loads of things in the sales area, and in fact, we did a lot of clever stuff because of the analytical background we had. But when I said to the team, what is the biggest problem? Well, they said the biggest problem was identifying which members are going to leave us in a time period that allows us to change the outcome. Anyone could do it the last month, that's easy. They haven't been in the last 60 days, they're out of here, they're not going to be there. But this gave us an opportunity. So what I wanted to have a look at, taking into account in financial services at that stage, statistical models have been replaced with machine learning and on artificial intelligence. So I took a data set from the club and I wanted to see: was it predictive? Would I have the capability to be able to model with machine learning the outcomes? Did I have enough to train a model that would then subsequently be able to do the predictions? And you know, I'm going to say, cut a long story short, I haven't given you a monologue for five minutes, but you know, what has actually happened is we we did. And out of that um came, you know, again, like all of the good entrepreneurial narratives, a chance meeting with a number of individuals who were involved in the fitness business. And when I told them what had been built, they looked at me as if I'd discovered the Holy Grail and they wanted to get more involved. So, you know, um by January 2019, uh the product was capable and exists. It's called Keep Me. It's a um a platform which identifies the members at risk of leaving, as well as providing the organization multiple, multiple different insights and then giving them the engagement tools to go and swing and turn it around. And you know, to this state, we've got customers around the United States, Canada, Poland, Australia, Thailand, a whole host of other areas. And indeed, as we've just discussed before we started, we've just finished our latest investment round, which has given us the opportunity to open the offices in the US, Madrid, and then Australia.

There you go.

Yeah, love it. Great story. Um, and you know, one of the things that excites me about this interview brings together two things that I love, which is uh entrepreneurialism, which is still a tough word for me to say, and uh and fitness tech, right? And AI especially is a fascinating thing to me. And I, you know, I'm curious, you know, from a personal perspective, when you look at the businesses that you create and the problems that you solve, you know, do you have, I mean, some of the best entrepreneurs I know have a checklist of criteria that they're like, okay, this is a good opportunity. I'll pursue this. You know, and they're really good at like finding the diamond and pursuing it and then letting everything go. Um, because as you know, as entrepreneurs, we have we see opportunity everywhere, right? Um, you probably at a certain level, you probably get approached quite often about things, right? What's the criteria that you use on deciding what to pursue?

You know, I I'd love to give you this fancy answer now that I had, but in both, in if you think about my entrepreneurial career, I started Vander because I couldn't find a facility that would give me the um the time and the equipment that I needed to achieve what I wanted to do. The fidgets, the indoor children's playground, whilst Mrs. Milan clearly gets the credit for it for those ideas, that is also something that came about because we wanted a place for our young children to be able to play an air conditioner in Singapore. Localiser started because I needed a tool to be able to present the performance of social media campaigns to clients. And Keep Me was a tool that was built so that I had the capability to be able to improve my business performance. Um I build for my own need, and if my need happens to have a commercial outplay, then logically I am going to try and take that forward. Um, but you know, realistically, I'll be frank, it has to be something that I'm interested in as well. Um, when I look back on anything that has happened, it's because I haven't felt that it was going to be laborious. You will as well. You come across many ideas and you can see how they could work, and you could see how you could make them successful. And you could also see yourself dragging yourself along nine-inch nails for the next 12 months, not having one element of fun. So, you know, when when Keep Me as a decision came around this time, I looked at it from a commercial perspective, and I looked at the team that I had available to me in Banda. I also looked at the people it would require me to interact with on a regular basis. Quite frankly, I also looked at an industry which needed help in this specific area, and therefore I had a high optimism that our message would fall on enthusiastic ears, and therefore I couldn't see why I wouldn't want to do it. I get to play with the platform that I really love, hopefully improve a problem which exists in the industry, and get to work with some very, very cool people as well. So um I don't have a checklist. All I will say is that when I decide to do it, then I will, you know, psychologically, I commit myself to it 100%. And that's probably why, even when the checklist isn't there, the barriers that come about I can get over because I've already made the decision this is going to happen. Come on what hell?

Yeah, that's a good answer. And uh you know, so so retention. Oh, you know, big shout out to Alex Armstrong and the Fitness Retention Podcast. I think he's the one who connected us. I've known Alex for a long time. So if you guys are interested in learning um, you know, about retention, um, obviously it's a great podcast. That's the name of it, right? Yeah, Alex is a great guy.

Yeah, he's good, good dude.

Um you know, retention's an interesting thing, man. I um, you know, I own Gyms for a long time in California, and uh you know, there's a certain amount of ego that's attached to retention for for operators, and like, you know, people are leaving me, right? I I don't want, you know, my service, which I think is so amazing, so we instantaneously, you know, fall back on lead generation when really I believe, and I think a lot of people who see it, and it's it's becoming more and more obvious by the day, retention is the is the place to be. I mean, it's really expensive to get new clients, you know, nowadays. You know, it's not like you know, Facebook's getting eking up in the costs, and and ads are you know most markets, especially here in the states and certain parts of like you know, California or the East Coast, you're just bombarded with ads, you know, as a consumer. And people don't know what to do, the challenge format isn't really as working as well as anymore for Legion. So retention needs to take a much bigger stance on the stage. And um, I'm really glad that you know people like you are taking a technological look at it versus the traditional um, you know, just behavioral notices and you know, trying to stay on top of it. I mean, I literally had a spreadsheet and I went through all my clients, and if I hadn't seen them in two weeks, you know, we'd call them and and it was just tedious, but it was worth it.

Yeah, it is, definitely. Right? I mean we're not there in any shape or form to replace any of those best practices. It's just they're not they're not possible to do at scale. And also there's a necessity to have a better understanding of what stage a member is in that member life cycle, so that the communication you have with them is relevant and is not blanket. So for my my my view, my view around why retention is important is because we are in a false market at the present time. It's not something I get total agreement on, but we are in um we're in a very strong economy. The economist in me would suggest that there are big fundamental issues, but the reality is currently that's not the case that's showing. But if that we we are in a business which has 90% of its revenue tied to the subscriptions of our membership, then in addition to that, we have these fixed price PLs where we have no room for movements, right? Because it's it's rental, property costs, and then obviously the salary costs, right? So unless you're gonna get rid of your staff, you've got no flexibility there. So therefore, these PLs have got very limited opportunity to take a shock. We're in an economy at the moment which is growing and is performing well. However, we also know that we are going to see at some stage a dip. And that dip, based on a whole convergence of issues out there at the moment, could be very, very significant. When we look at it, we've also got increased competition. And this increased competition isn't just from bricks and mortar gyms or boutiques, this is from the digital players like Peloton, right? And let's not forget, I've read plenty of content at the moment of people who go and look at Peloton, it's no different than we work and the rest of it. Bullshit. It definitely is. You show me any business that in 2012 had stood up and said, don't start a fitness business. By the way, two and a half thousand costs two and a half thousand just to join up, and it's 40 a month. And by the way, you do it in your own house. No one would have gone near them, right? They have a 93% retention rate. I'm fortunate enough to work with, from what I know, two of the highest performing retaining clubs in the world, and they're based in the United States. Both of those individuals are nowhere near 93%. 93% is definitely without that. So we have all of this competition. So we've got constrained PLs, an economic climate that could change at any time, massive competition from both digital and traditional players. Oh, and All the free money sloshing around at the moment. You want to open yourself a new club? No problems whatsoever. Here with the virtually zero interest, right? We've got the opportunity to go and do it. I sit with operators all of the time. And I've heard from CEOs tell me, yep, four and a half thousand new members last quarter. Fantastic. What was your net? Well, that's irrelevant. Four and a half thousand one of your things, right? That's irrelevant. And that's the way it is, right? It's totally new from that aspect of it. So at the moment, there is the possibility to buy four and a half thousand members, right? There is the possibility to grow from five sites to ten sites to fifteen sites to twenty sites. We are going to see a catastrophic event if we get a convergence of a number of factors out there, right? Particularly when it comes to a lot of the players that have overstretched during that time. The franchise models may not have effect, their risk is more diversified across a large quantity of players. But you know, your boutique players into your larger box players, they are going to find it very difficult to maintain growth if their concentration is not on retention. If you can't retain the members you've got, you are going to find it more difficult to recruit new. The cost of acquisition is going to get to the stage where it's more expensive than it is to have an EM band. When that happens, you've got a problem. So the recipe is really simple. If I was an investor now and I was looking for organizations to invest in this space, I would be looking for those that are retaining their own members and then recruiting from those that aren't. And you know, that as a model is going to work. I have seen when I look at the best performing clubs in the United States, these organizations have an utter bias to retention. They now understand that by retaining your members, you will see significant increase in your referral traffic. You will see a decrease in your acquisition costs and your lifetime value of the membership and therefore the revenue will go up exponentially rather than the consistent crack cocaine sales approach of trying to get as many people in through the door and just new sales, new sales, new sales, new sales. But you know, when people listen to this, you'll get 50% of them in the industry and senior positions will say, ah, crap, crap, he's talking rubbish, right? Yep. Good luck. We'll see you in five years' time. The reality is that what you've done for the last 10 years has not worked. The amount of times we've seen people up there talking about retention this, retention that, methods this and methods that, it's not working. This is an industry which sees 60% of its clients walk out the door every single year. They're alright with that. And you know what? They can be, because they've got more coming in through the front door. But the reality is that's starting to stop. Penetration levels. This I read every year about this remarkable economic effect of this market, just keeps on growing. It's amazing how it keeps on doing it. Um doesn't seem to figure to me. Aging population, and I haven't seen a huge change in the way people are attacking that particular marketplace. So we've got an aging population, and we've got birth rates decreasing. Where's this increase in penetration? Oh no, that'll be because of the increased wealth everybody's got. Um, sorry, salaries have been stagnant for the last decade. So, where are all these miraculous new gym goers coming from? Well, could be the race to the bottom, $5 membership, $6 membership, $10 memberships. And indeed, I even had a call the other day with a US gym that currently has no retention issues whatsoever. Do you know why? They charge $1 a week. And if you're charging $1 a week, I'm pretty certain you're not going to have retention issues either. I'm also pretty certain, unless you've got something I don't know, i.e., you're not paying rent and you haven't had to pay for equipment and you're not paying the staff, you won't be around for much longer either. You can see it's not hard to get me on the pulpit of retention. It breaks the hell out of me because you've just got to face the reality of what's there. You know, whenever I ask, and I ask all of the time, and what's your retention right? This is only CEOs. Nothing. They don't tell me, they don't know half of the time.

Yeah. I mean, you ask I'll ask people, um, and this could be, you know, multiple gym franchise, you know, like tons of locations, or it could be a boutique, or it could be someone who's you know getting their their five, six location chain um expanding. But retention and profit margin are two things that are very foreign to a lot of gym owners. And it's it's it's a crazy metric, but everybody can tell you how many leads came in last month and how many members they had and what their top in revenue is, but everything else is just you know smoke and mirrors, and it's it's only um it's just a bury your head in the sand tactic that you know you gotta pay attention to retention. I mean, I I tracked it every month um for many, many years, and you know, proud to say most months were in the 90s. You know, most months were in the 90s.

Really, really good.

I I didn't know, like, you know, but then you know what what what uh actually saw the decline. I mean, I probably held we probably held that steady for a very long time. It was the advent of digital marketing when I started leaning heavily on that that my retention decreased. Um it was a crazy thing. It was like, oh, finally, because I was, you know, as a gym owner, a boutique gym owner, you can be tired sometimes. You can be tired of always having to go out and find new ways to get new clients and replace the ones you have. And we create a great experience, very proud of that. But as soon as I started leaning on digital marketing and lead generation for for my primary source of new business, I started to see a pretty steady decline in in my retention and referrals and things like that. So it's it it's it's a band-aid most of the time. But retention is the long-term goal.

That's the issue, right? Well, one of the things I also think when you talk about the you know the relying on the digital aspect, I mean the digital is going to remain the dominant channel um that is non-referral based, okay? Um, but one of the other things which I have found interesting in in kind of being interloper in the industry has been that they can tell how many people, the industry is capable of telling how many people came into their clubs, but they don't understand the value of that. And you know, we did an analysis very recently where for a number of clubs we took a look at the inbound that they had. And you know, their you know, Facebook, for instance, would dominate in many cases the thing. And and they the cost of acquisition they could justify you know, maybe two times what what what uh two times what the revenue would be two times what the cost of acquisition would be. However, what they didn't realize was that they were the lowest LTV members as well, their entrance in and their exit out. And people try to understand why that may be, and to me it's not, it's very simple. When I walk in, or when I come in as a referral, I've got an existing relationship within there that may even tie me in on some type of social or behavioral level, but at the very minimal will give me a connection beyond just a sheer financial transaction. When I come in via a, you know, ironically, when I come via a social channel, but in a paid ads sense, there is a much stronger probability that I do not have any relationship with anyone within that organization, and therefore it's just a straight financial. I think that it would be entirely possible to drive very strong retention from those individuals as well. But you need, in the first place, to have differentiated that they are that type of member. They did not come in through referral, they did not come in because they know Ian, they didn't know Eric, right? They came in because they answered an ad. And then for you to find a way to build those connections within the gym, with the relationships, with their group X, or whatever else it may well be. But treating you, treating every member is the same, clearly not going to work. And there is simple differentiation put in there around age and gender and those type of aspects. But what there also needs to be is how did I come to the club? And then in how I came to the club, will take to some degree how I'm then placed onto the member journey around, for instance, as a good example, the induction. Do I get a I'll get a different level of induction maybe than someone who came in via referral who's going to do their first lesson, their first group X, their first class, whatever, with someone that they already know. So I the I'm not I'm not negative or pessimistic about the outlook for the industry. I just think that the industry itself has got to start taking advantage of the data and the best practices that exist in both this industry and in others as well. We are fundamentally a subscription-led business. Fortunately, the world on financial models has changed dramatically in the last 10 years towards subscription in. I have two businesses of it, and there are many other examples, as we all well know, Netflix, etc., etc., which means that there is a huge body of data, there's a huge body of governance, there's a huge body of best interests, best uh activities that you can get involved in from these practitioners, which should be brought over. And yet I'm still attending conferences and listening to the same thing time in, time out. I'm listening to people talking about the tech, the the future of fitness, and it looks to me like a six-month view. It doesn't look like a five-year view, it doesn't look like a 10-year view, and it actually, quite frankly, most of the time, it doesn't even look like a well-thought-out view. And the reality is that that is going to be the biggest detrimental factor to the growth of the sector overall, because there is so much we could be doing better, because what we do do really well, which is the innovation around on the floor and the group X and our people and that we're doing very, very well. But the business operationally could get better.

Way better, way better. And uh, you know, obviously the title of this card this podcast is The Future of Finance, so it's a huge interest in mine because I do believe out of you know 160-something interviews that I've done on this show, not to mention the four-inter I did on my other, you know, getting an idea of what's going on within the industry and and you know, the analogy I use all the time is want to see people skating to where the puck is going, right? Not where they are now. And there's a lot to it. I mean, there's a lot of different viewpoints. I mean, there's a lot of people, I'm starting to get a pretty cohesive vision where I think it's gonna be in five, 10, 15 years. Tech, huge part of it, undeniable, right? Pelotons, tonals, mirror, you name all the home-based devices that that are out there. Then you start getting, you know, the wearable technology and what that means for you know, essentially health, self-health management, you know, by AI, um, the internet of things. I can keep going on and on and on who are gonna be the players potentially, and I don't know, nobody really knows. But tech is gonna have a huge part of it, and people need to start embracing it. And that's a big thing that I want people to do. And one of the reasons I like talking about this stuff. So, man, I I think we've painted a pretty clear picture of why it's important to talk about retention, right? So, start giving me some insights. You know, one of the things I was cruising through your website, looking at our you know, resources that you guys do, and you know, it sounds like you guys do pattern recognition as part of your software. How does okay, big step back? What do you do? How does it work?

So we we did pattern recognition. That's one way of looking at it. Listen, you know, artificial intelligence in a fitness context is two things, right? It's prediction and it's and it's automation. They are those two areas. Big proviso. None of those are designed to take away the human interaction. They are because there is no club on the planet who's got high retention if they are not at the best they can be when it comes to member interaction when they have a member in the club. Okay. This technology, our technology, the artificial intelligence type of technology, is there to support the human interaction, to make sure that when we have an interaction, we are equipped with the best insights possible to have a valid interaction with that member at that particular time. What Keep Me does is it takes the existing data within a club and then using a machine learning methodology called random forest, it then teaches itself about what historically has happened. Now, you and I will sit there and you've said you've done it yourself. We we would go through it, we may predict, we would say that, well, it's the final month of membership, let's use attendance as the main variable, and we could have a look to see what we think. Well, if they've not been there in the last 60 days, the probability is that they will not be there at the end of the month. I can then take that as a variable and I could do something called statistical modeling, right? Where I would utilize that, and I could probably get to about 65% probability throughout the lifetime of a membership. Machine learning throws everything we think we know out. It will build a decision tree around a key variable as an example, um, attendance, and then it will look at every single other combination it can put together. In the context of our platform, on an average data set, it will build over two million decision trees, all of which are then brought together in what we call an ensemble of fashion to then be able to present a prediction of the probable outcome. The accuracy levels of this far beyond human. Now, this is where it gets funky, right? So the the description that I would always say is what it provides is an understanding of the member that's going to leave prior to the member themselves knowing they're going to leave, right? And again, pulled up on that one each tab. It's a real easy one to explain. I've joined in January, it comes to March. Keatney's telling you that I am not going to be here in December. I am showing so many of the behaviors and the data points that would suggest that. But if you come and say to me in March, hi Ian, are you leaving us in December? Well, of course not. Some cost fallacy. I've just years worth of membership, I'm not going anywhere. Right? And quite frankly, I'm still kidding myself. The fact that my average attendance has gone down and all of the other aspects which would point to it, I'm still going to tell you no. But keep me's already identified that that's the possibility. And what we need to be doing in that context, what you can do with the technology, is then we have the automation aspect of it. The automation aspect is looking at the behaviors, looking at the risk of the individual members and the groups of members. And then I have instructed it as the owner and the operator what behavior I would like to do. So for instance, if I haven't attended in the last 14 days, maybe I get an SMS asking me if everything's okay. If in 28 days I haven't attended, right? Maybe then I will get an email to give me some guidance or suggest I come back to PT. Maybe after 30 days I get a telephone call for member services. However, that needs to all be automated. I often sit in front of operational teams and they'll go, yeah, we do all of that. And I'm thinking, no, you think you do all of that. You send out all of those SMSs and half of them just bounce because they're no longer the email, they're no longer the HP numbers, their iMphone numbers that people have got. Keep me automatically sees that and then sends the email and asks them for an update on that aspect. You make all those telephone calls, um, but then what happens after that? There's no further contact. So what we need is to have an understanding at any one time of what level of our membership is actually likely to be with us in a period. Now it gets better. I can then identify gender, age. For instance, a recent, I'd use a good example recently. So I've got uh a current club, uh, there's about five sites. They are uh sub-20-year-old, terrible, right? It's their attrition risk is massive. 50 plus, it's massive. 26 through to 40, beautiful suits for all low risk, they're doing very, very well. However, they saw themselves as uh 18 through to 26 club, not a 26 through to 40. Changing social messaging, a little bit more outreach, get a better understanding of where the product is. Next day is down. Keep me tells you group X. So it looks like, for instance, that um the high intensity class is driving a uh low attrition, whereby a PowerPads is doing a high attrition, right? Now, it's not that PowerPads is not a sensitive, it means that there may be some underlying reason. When you click on it and then you drive down and you see it's a particular class, maybe it's human performance. Human performance is driving, you've got a group X instructor which isn't at the standard of everybody else. Same for PT, same to these two. So what Keekme does is if I sit down as an organization, by the time I'm finished, I'll know what risk I've got, I'll know to what level I have an opportunity to change it because we bucket it to the degree where we can tell you the ones never to go near, we can tell you the ones which are all good, we can tell you where the sweet spot is which you need to hit. And then I've got an understanding about what parts of my business may be affecting attrition and what I may be able to do. The thing that's important when you're dealing with machine learning is to understand that it never stops learning as well. So we are always seeing these models refine. I mean, they're all based on each client, but they refine themselves. Every time you send out a newsletter, did they open it? Did they respond to it? Did they report it as spam? Did they click on it? Right? NPS, good example. They have shout out to all the NPS providers, but you know, the data that we see on this one, zero to ten, right? I could give you a zero. Yeah, I'm a detractor, I can give you a 10 or a promoter. But did you know that the individuals give you zero to ten, any one of them are four times more likely than the ones who didn't open the email in the first place? Keekme is looking at these things all of the time, and it's just small data items, small data items, small data items, which allows it to refine things. So the industry's opportunity is that it has consolidated huge quantities of data for probably 10 years now, where we've professionalized the club management systems, and God knows there's enough of them out there, right? So you've got the opportunity now with that data. What people need to understand is they've got a massive opportunity to do something about that, to turn that into operational gold, real revenue, by not only the insights, but also having tools that can automatically take action based on the unsights that they're seeing. And it's that because you know it's very easy to read the retention dogma about what the receptionist should say, how you should interact, and that. Well, you know what? It's not them people I'm worried about. It's the ones that aren't coming, it's the ones that aren't coming as regulars, the ones that are flying in under the radar. The only way we can engage with them is digitally, and doing so in a custom manner at the right time, at the right message, in the right time, all of the time, by doing that, we've got a better opportunity to get them to re-engage with the business.

Cool. So how how are the data points collected from the clientele? Is it done? I mean, obviously they have to check in the tenants, that's easy, right? Is it collecting social media, email opens, it's it's it's going to be the basic stuff, right?

So that it's going to be their their age, it's going to be their gender, it's going to be their location, it's going to be um their check-ins, what classes they're doing, whether they purchase PT, what purchases they make, what type of membership have they got? What type of payment choice do they have? You know, are they a credit card? Are they a ACH? Do they do it via full up front, those type of aspects to it as well. That is the type of data. And take attendance. It's it's always going to be a fundamental part of any algorithm in this area. When you have a machine learning thing, it'll take your daily attendance and it'll make up to 40 additional model characteristics just of your daily attendance. It will look at hourly, it'll look on weekly average, it will look at seasonal, it'll look at three-week average, two-week average, Monday to Monday, Tuesday to Tuesday, Wednesday to Thursday. It's not stuff we ever think about. But what the model is trying to do is it will segment all of these out into these things and then segment the other stuff out there as well. So it will look at age category 20, age category 20 to 25, 18 to 20, and it builds all of these, and then it is constantly putting the comparisons into place. So for someone to be able to utilize this, they need to obviously have the type of stuff they have in the club management. We definitely can use products such as Myzo, which would be a prime candidate for adding in additional data sets. We utilize uh MPS platforms like Listen360 and Medallia and those ones as well, which will provide it. And we can utilize um, should we say, the more CRM-oriented ones like the Salesforces, the Marketos, and that type of aspect. But fundamentally, it's about utilising the club management software data, which they hold around the membership, and then thus being able to we may supplement it, but predominantly the model can build off those data points. So my message is everybody's got it at the end of the day. It is there, it's not always in the best health. And and you know, putting some time a lot of the work we end up doing in the initial stages is cleaning up, tidying up, and making it into a presentable data set. But most people these days are there or thereabouts. So there's plenty of tools to help us do that.

Yeah, I was gonna say the how the data is managed. Um we're probably better in this conversation, mismanaged most often is yeah, probably. You know, a lot of a lot of because they don't see the value. We don't as a we just don't see the value in it yet, right? But it's there. I mean, every other you look at had a gentleman we're talking about uh wearable technology he was on, and we were looking at you know how you know the first rendition of the Fitbits and any kind of wearables come out, and now everybody's taking a big step back. They're like, holy shit, we got a lot of data, right? So now there's a new wave of hires of of you know uh uh data researchers, people know how to massage the data, how to look at it, and that's kind of the next wave of things are coming out. And it's quite honestly it's quite scary. I was listening to uh Joe Rogan interview at Snowden um about you know where data is going and it's happening, right? It's just happening, and it's not what you can do, so you learn to adapt and leverage it if you can. So, you know, from a a broad perspective in the fitness and health space, where do you see data being leveraged? You know, obviously retention, right? But let's say like 10 years down the road, you know, like where do you see data being leveraged, IDC being used in the market?

I I see it being leveraged uh in the very near future, the next 12 months, in in actually, ironically, the member, the new member sales. So I think that there is the perfect opportunity to be able to utilize the algorithms that define um the best retentioned members, the members that like to stay with us the best, to be able to build models about which ones we should go after, right? So, how do you get better retention? Well, you recruit more members that are going to stay with you longer. And how do you do that? When you look at your existing membership when you do it now to do that at scale, right? So, you know, I I have that marriage of both the social media and the fitness aspect because of those things. So, in my in my world, what I can do very simply is this I can look at my membership, I can have the model define for me what the characteristics are of the member that's likely to produce the highest LTV, and then I can build custom audiences on Facebook to reflect that. Now, currently, people's custom audiences are based off what they believe the brand's target is, where in our context, it is who is going to provide us the highest LTV, and that doesn't matter if it's an 85-year-old or a 25-year-old, as far as we're concerned, we want to build those characteristics. And you know, it's a war of small increases, it's incremental. You want an extra 1%, 2%, 3% on your LTV, and that makes a significant difference. So I think there is that. I I think that um as we get to paint better pictures of um of which type of members are going to have a better retention in our club and use those for sales, we're then going to produce a better environment for those members as well, because we will be bringing together the people that are most likely to want to stay within that. And in doing that, we will then be able to tune the product for that as well. So I think they're the main areas. I think you know, logically, the the wearables, the wearables is not overdone. What wearables have I I am a self-proclaimed, I have there's a cupboard which is uh off over there, and honestly, there is more wearables in there than it's just ridiculous. I've had every Fitbit, I've had all the aura rings, I've had a few garments, including the big massive ones down to the models, a few santos during the time. Yeah, exactly. Beautiful pieces of kit, and you know, and then the the whoops come along, and that's changed virtually everything for me. You know, that it's it's but it is the first tool which has got it right, where the balance has been about the data collection and then the utilization of it. So I mean I wear an iWatch as well, right? And the Apple Watch is great and it does a lot for me, but this is the first time where I could get a reliable HRV on a regular basis and then blend that data in with my sleep and those aspects. Now, if Whoop is you know, guys, if you did happen to listen to this, you know, there is no integrations with this tool whatsoever, right? Which means its adoption beyond professional athletes is going to be relatively minimal, right? Because they you know they've got coaches to do this stuff. But if if I went into a club and it could dictate which class I went to based on my recovery score from Whoop today, that would make a difference, right? If I could then be trained, now my zone does a very good job on a heartbeat level of being able to tell me what zone I should work to today. But if it's on a whoop side of things in the same concept, if I went in and I know I'm on a yellow day today or I'm on a green day today, then all I have to do is to keep my overall strain level, which is their concept, in the orange or the yellow in the green, then that's going to be beneficial. Feeds brilliantly into retention as well, by the way. I guess why? Because one of the big things we do see is that people who consistently attend but consistently do it threshold are the ones with the highest retention. However, if I've got the data set, I'm telling you now the model would be able to tell me that if I go in and overreach on a consistent basis, and I've seen this happen in data terms, then that model that member's unlikely to continue, they'll burn out, they'll over-trainer, they won't have the capability. So utilizing all of these gadgets that we carry around to be able to tailor the experience, and whilst you can't tailor 30 group X classes for 30 people, you can provide them the window into their exertion effort and whether that is optimal or not. And you know, final one on the Whoop, just as an example. Um, I sit there, so I've been out, I'd done my training for the day, I came back in. It's five hours later, hadn't looked at the Whoop all day, pulled it up, I'm on agree, I could push myself more. Nothing inside of me wanted to head out and do a run. Nothing whatsoever because I was done, I was spent. I put my shoes on, I went out the door, and I did the run. I did a PB as well on that particular day, and it was because the only thing that was stopping me from doing it was that once HRV and the other aspects, sleep and the rest of it, is start to brought in, it gives us a much better picture of what we're actually capable of. I've uh I've my my training levels have gone up insanely since I've allowed this to follow. And you know, when it tells me to rest, I rest. When it says you're on a half day, I'll have a half day. But when it says push, I will push. And if I only do what it does, I seem to be getting all of the benefits. That type of data incorporated into a gym environment that occurred, that was then being able to utilize that to not only tailor the experience on the day, but then to tailor the communications afterwards. You know, Ian, you've been overreaching two out of your last six sessions. Can we suggest that you don't go and do the high intensity class, that you go and do the class which is in the same one in parallel, but it's one more level. If you try that for the next two weeks, we'll inform you if we find that it hasn't had the benefit we expect it would have. Cool, right? I mean, you know, I can do that. I could deliver that now. That's a technology that I could deliver. I'd need Whoop to play a little bit more game, or I'd need my zone to up the game on the HRV, but I could deliver that utilizing models and utilizing the automation aspect of it and keep me straight away. And for me, in a high-end gym, if it's an Equinox or one of the boutique ones, that's the type of service which I would pay for or expect to get because I'm going there to have my wellness looked after. I have to participate and I have to give in, I'll be giving in financial and to sweat, but I need someone overseeing me. And it can't always be PT. That's not going to be the driver for people's long-term relationships. This would be a way of locking me in. If that tool existed, I'd struggle to leave any organization that was able to give me that level of indications.

Yeah. I love it. It's a great vision. And I think, you know, ultimately what it comes down to is, you know, as a fitness professional, hopefully people are listening and saying, you know, maybe it's not, you know, technology is not the enemy in any way. It's it's my friend. So how do I start doing it? I was just thinking, like, man, if I still own a gym, every new member and all my current members, they would all have some kind of wearable tech.

Well, if you can remember the document, we did it. That's what we did. Every single member was given the uh myzo, and everyone was given a boxing wearable as well. Why? Because when we sat down with them initially, we felt that if we didn't give them a we didn't benchmark them at the start, we weren't going to be able to show them the tracking and the improvements we're gonna make. And if you can't show people improvements, do you want to know how long they'll stay? If you can show people measurable improvements, right, you are going to find that they're going to have a much more motivated experience and be capable of staying for a lot longer.

Yeah. And it just makes sense. It just gets you engaged in your own health. I mean, I have, you know, I have the Phoenix uh, the Garmin, the Phoenix 6. The um, I had a whoop, I had all of them. I have a graveyard of wearables as well. And uh, you know, I I jump back because I always, you know, I didn't I couldn't wear I couldn't wear whoops because I didn't like too many things on my wrist. I just wanted one lock, one thing, right? So the garment works well for me. But the amount of data that I'm collecting every day on myself, and uh you know, just from you know, imagine like I've only had it for three months. Imagine, you know, 12 months from now, how much data I'm gonna have? I'm gonna be able to look at, you know, when did I sleep well? How did I perform when I slept? Right? All these things and my HRB over time and um how my stress levels were and when when my heart rate elevated, like all kinds of crazy stuff, and now I wear it all the time. I can't live without it. It's just an extension of me. And that's what it is, you know, it's an enhancement, and people need to start grasping that. When you're when you're looking at the market, Ian, what what are the challenges for your growth with keep me AI? What do you what do you think the biggest challenges are that you're facing?

Um I I think if you if you want to have a successful product, then you need to be aligned with the market. And um currently the people adopting um uh keep me are ironically enough the best and the top retaining clubs. Um, they are the ones that recognize it's a major part of their strategy. If you feel that the new sales is going to continue to be the driver of your operational growth and you feel that retention is something that um can wait, then you're not going to be eager to get yourself involved in this particular aspect of this tab. So I think um apathy towards the industry issue is one. It doesn't worry me from a company perspective on the basis that there are still many, many, many hundreds of organizations who are very eager to approach their attention in a new way and look to get things to do. Um I think that um you know, disappointingly, probably one of the biggest drivers of Keep Me's growth is if we have an economic correction and if we do find that uh organizations are no longer having the ability to be able to drive new business sales into their clubs as a way of maintaining their revenue, then the alternative is retention of what they have. And that's when a tool like Keep Me is going to come into place from that side of things. But you know, I'm optimistic for both because you know we're a global business, as we highlighted at the start. We've got mature markets in the US, the UK, and Australia. You know, these ones are high penetration, they've been sophisticated for a long time. And then in Southeast Asia and in Latin America, we've got markets which are coming online, are growing at double digits on a regular basis. So there's plenty of opportunity for us. What I would just like to be able to do is to start to build an understanding about the benefits of utilizing retention as a central pillar of business operation. And my hope in time is that we'll be able to, you know, we haven't rushed out with any 10 facts you must know about retention or any of that type of stuff, right? Because, you know, the data sets which are used by most people at the moment, they're decades old. Any data set that's more than two years old is irrelevant, right? Statistically and otherwise. But also because the work we're doing at the moment is showing massive promise. But I've been very open, even in the investment round. The reason that people are saying that keep me's had the massive impact it's had, I'm not sure yet it's to do with keep me. I think it's because it's the first time they've actually put the attention into retention because they've got a tool which is concentrating the mind that isn't just an NPS platform or some BI thing. And because of that, suddenly we find ourselves in a situation where they're doing actions and then they're seeing value. And then they're attributing it to keep me. And you know what, thank you very much, we'll take it. But I think that our benefit is going to be in the six and the nine and the 12 months, because the one thing I will agree in the dogma that is in this industry around retention is it is about consistent, constant action, daily practice of doing the right thing and doing it on a daily basis. And with that being the case, whether it be digital engagement or whether it be custom communication or whether it be greeting people properly in the club, if it's happening at scale on a daily basis, you will do better. That's going to happen. And in the case of what Keep Me does, because it allows you to do it at scale at custom, we will see those improvements. So I'm optimistic, clearly I'm optimistic, and now I was on here saying, no, we're in a world of trouble, Eric. That's not going to make a great interview. But you know, the reality is that there is an industry problem, and we think we have got a solution that will help a lot of people. We're not the silver bullet, and by the way, it doesn't fix your attention, it just allows you the opportunity to understand where, and then have an opportunity to take action. And if that is the first stage, then I'm hoping with our track record and capability that we'll be able to grow into the industry and then start to add on the other aspects so that we can become a very viable technology partner for those organizations which want to incorporate technology into their operations so that they can concentrate their people assets on the members and the member engagements.

Yeah, awesome. I I thought it was really funny what you said in there too about uh, you know, kind of like it's like a digital placebo for retention. Right? Oh yeah, now I'm doing something, so it's working. Uh yeah, this is it's it's it's been a lot of fun having you on the show. Unfortunately, our time is running short here, but um, keepme.ai is your is your website. What about you? Where do people find you?

Yeah, you you can find me, um, you can find me on LinkedIn, right? So I'm not the only IMLAN on there. There is one other that wants to compete with me on that side, but I still think my my URL, my vanity URL has held it as IMLAN. And then I can always be reached at Ian at keepme.ai as well. And I'm always happy to answer questions, not just related to product, but also related to how the technology and artificial intelligence can actually influence and help with operations. Awesome.

Well, Ian, man, thank you so much. Great insights, great stories. Um, you know, a lot of value that you brought to our listeners today, and I really appreciate you taking the time, man. It's been awesome.

Uh Eric, thank you very much for having you on. It's been uh some time coming, and I've been really eager to do it, and I'm glad we've got the opportunity. Yeah, me too.

Ladies and gentlemen, Ian Lane. Thank you, sir. Hey fitness fans, don't leave yet. It's your host, Eric Malzone, and I have a quick favor to ask. Actually, three favors. So, number one, if you're a fan of our show, I asked you to do something that takes under three minutes. Go to iTunes, please, and subscribe to our show. Please, please, please. It means so much to us, it's so important. And then give us a favorable review. We would really, really appreciate it. And uh, I can't tell you how much it means and helps us out. So I know it takes two minutes of your day, and uh, it means a lot to us. So please do that. Number two, go to our YouTube channel or Fitness Marketing Alliance, and uh please subscribe to our YouTube channel there. Number three, if you like this episode or any of the episodes that we've released, share it on social. That's huge, that's a big deal for us. And we're we put a lot of work into these episodes, uh, trying to give you great actionable content uh for the fitness industry. So that would mean a lot. And that's it. So we have some big plans coming up for this show. I'll be talking about that in the next couple episodes. But thank you so much for listening. It means so much. And uh, if you have any questions, please reach out to me. I'd love to hear from everybody. Eric, E R I C at Fitness MarketingAliance.com