What you need to know:

• Five years into a digital transformation program Sydney club and venue operator Norths Collective is driving major growth through personalisation and data-driven insight.
• Engagement metrics are through the roof – and it’s getting more spend from members.
• Plus it’s using the data to de-risk the launch of new clubs. It knows how much income it can likely generate from 60,000 existing members before it even opens the doors.
• The program has flipped its relationship with suppliers: It’s now leading the meetings to tell them exactly how and where sales are happening and unpack trends that inform their marketing strategy.
• A new app and loyalty play also has drinks giant Lion licking its lips at the prospect of tapping customers within the app.
• Ahead of the next phase Norths is embarking on ‘Project ROI’ to determine exactly which aspects of the CX stack (not just the campaigns it enables) are delivering which gains, per GM of CX, Brand and Innovation Rob Lopez.
• Lopez has five key tips for marketers starting out – or re-engineering – their transformation programs.
• Getting the right level of resource and expertise to drive the CX Lambo is crucial, per Lopez.

Love the beast

Ask CMOs if their martech stacks are delivering ROI and what they will tell you privately is often a very different story to public proclamations of efficacy and ROI. It’s not easy to tell the CFO the CX Lambo turned out to be a lemon that nobody can drive.

Norths Collective, however, is roaring away from the competition, per GM of CX, Brand and Innovation Rob Lopez, despite the clubs and venues business suffering severe Covid disruption. He puts it down to a major martech overhaul – and putting in place sufficient resource to actually drive the beast.

Versus a pre-pandemic baseline, customer lifetime value across its 60,000 members is up 12 per cent. Membership is up 20 per cent, renewals up 28 per cent – and automation of those membership processes has saved circa 28 marketing hours a month.

Click throughs on website pop-ups are sitting at 24 per cent, email open rates have tripled to 60 per cent and email CTRs have increased 10x to 11.3 per cent, driving a surge in web traffic and feeding back into its “ethical personlisation” machine, says Lopez.

All of which is significantly increasing visitation across its eight venues and two fitness clubs. Now Norths is doubling down on ROI to see what top gear looks like – and the data it is starting to fully leverage is bringing eager partners like Lion to the table and into its forthcoming app and loyalty play.

Project ROI

Built out of the North Sydney Bears, before amalgamating with other clubs, “Norths Collective, at our core, is a profit for purpose, membership-based, community-focused, dynamic hospitality group,” says Lopez. “Try saying that ten times fast.”

Over the years it has diversified, added venues to the group – three in the last 18 months. It’s eying more – and the data insight now at its core is de-risking expansion options, per Lopez, as well as driving growth from existing members and outlets.

Norths' transformation began with a conversation with the CEO in 2018, before moving into procurement, largely Salesforce, in 2019. The original mission was three-fold.

“The first was obtaining a full 360 degree view of our members, our customers,” says Lopez. “The second was getting smarter with our data, improving our business analytics capabilities. And third was getting much stronger in terms of hyper personalised omnichannel marketing capabilities.”

It’s paying dividends, says Lopez. But this year he’s embarking on ‘Project ROI’ to more precisely quantify those martech-CX dividends.

“Project ROI for us is giving us the opportunity to really prove the worth of this digital transformation journey to the Norths Collective bottom line,” says Lopez.

“We talk a lot about growing engagement, but this is really about understanding cost, understanding return, but also understanding risk – how we're actually mitigating the risk of housing the data that we house by making the decisions that we made at the beginning of this journey, to partner up with the likes of Salesforce and use their technology, their security and their trust mantra to help us ensure that we're securing the data that we have,” he says. “So risk actually is a big part of Project ROI as well.”

In other words, it looks like he's banking on Salesforce to underwrite the risk of data management as well as enable the smart CX stuff.

Growth accelerator

It may seem perverse to be honing in on ROI fully five years after sitting down to mud map the project with the CEO. But the world – and scale of the operation – has changed, says Lopez.

“If we think back to 2019, we really only had four clubs. We've doubled since then and we had to have this system built so it was easy to start growing at a rapid pace. If I go back to 2021, it took us about ten weeks to build out the back end systems for our latest venue, which was the Veranda at Beecroft. Last year we opened two venues within six weeks of each other, and we did the back end build in three weeks. So we have reduced the time to market by 70 per cent,” says Lopez.

“We had a two, three, five-year roadmap of what we wanted to do. We also wanted to make sure that it was achievable. We didn't want to set the bar too high too early. And that's where we've seen growth, especially over the last 18 months in terms of our engagement figures.”

There have been additional costs – there always are – particularly around resource required to maximise returns of the stack (Salesforce is the main game and Boomi provides middlewear). “But overall, we've done our best to really stick to what we knew we were going to be spending”, says Lopez.

Lifetime in a year

Covid turning up mid-way through the project didn’t really help – and the pandemic means Norths has only one full year’s worth of data to make its ROI case.

Nevertheless, Lopez says the company already knows the returns are there. Quantifying them just helps focus future activity.

“2022 was our first full year of trade [since implementing]. So we’re going to be using last year as a baseline and then the pre-Covid era as a baseline, but we’re definitely seeing that customer lifetime value [CLTV] has shifted in a positive manner … it’s grown by 12 per cent from when we turned on the lights of our digital transformation.” Now it’s a case of proving more precisely which aspects have delivered that value gain.

“I report to our CEO, who reports to our board of directors, who report to our members. It's about really building out a strong system that's going to allow us to understand how we've improved our member experience and our CLTV on a monthly basis. On top of that, we talk about campaigns – and we report on those individually – but then we start reporting on the power of our data. This is really at the crux of it,” says Lopez.

“We want to start understand that by centralising our data and communicating more effectively with our members and our community, what has that done? Have we shifted member visits by one per month? Have we got an extra visit out of every three members every month? And really tying that back directly to our marketing activities.”

Creating a robust cause and effect through-line is never easy. “The fact that Jack came in for a schooner on a Wednesday because he received an SMS on a Tuesday, it's very hard to do. But because we've centralised our data points, it's made it that much easier,” says Lopez.

Attribution push

To get a better through-line, Norths started out with the basics. Setting 24-hour attribution windows for certain activities, such as a monthly $10k draw to get punters into the venues.

“We send out an SMS the day of the draw and an email the day prior. So people who come in, did they open the email? That's the first thing. And then they attended the venue, so we look at it and say, ‘yes, we're going to call that. We're going to attribute that visit to that open’. We obviously can't get it perfect every time – and if you're going to try to get it perfect every time, you're only kidding yourself,” says Lopez.

Email remains “our core engagement tool”, says Lopez – and personalisation of member emails is moving the needle in a big way.

“Before we went through this journey, our open rates on emails were sitting at about 21 per cent across the group. We're now sitting at 60 per cent – because the members know that the content is going to be relevant to them.”

Click through rates on those emails have moved almost 10x “from 1.4 per cent to 11.3 per cent,” says Lopez, “and in turn we’ve seen our website visitation increase 45 per cent, so huge growth in engagement. And we’ve also seen our unsubscribe rate drop from 1.4 per cent to 0.4 per cent.”

All of which is contributing to an increase in the number of venue visits by members by circa 8 per cent, per Lopez. But measuring uplift and member activity in-venue “is where it was tricky”, he adds, which is one of the main challenges it aims to solve with the launch of the new app and loyalty play.

Data-hungry Lion

While members already swipe cards when they are in-venue, the app is designed to pull everything together, bringing behavioural and engagement data to Norths’ rich set of demographical and transactional data. That’s what has the likes of Lion interested.

Norths is now “officially Lion’s biggest club group partner,” says Lopez.

“Out of all the club groups that they're aligned with, we pour more litres of beer. Their director of connections caught wind of this and asked me to come in and meet with their digital team. We sat down two or three times, then they came and presented to my wider marketing team, which is a great relationship to be building,” says Lopez.

“When we started talking about the app, we all just started brainwaving with each other – and it's come to a point where we're looking at opportunities to partner in the app. Is there ways to start bringing in Lion through the app as well? Members who maybe purchase certain products, earn certain points towards future products or goods as well. So there are opportunities there.”

Even before that point, the granularity of data is setting the firm apart amongst Lion’s partners, per Lopez, elevating its standing because it can refresh the data points that others fail to reach. Which is changing the nature of its relationship from distributor to partner.

“It used to be very one way: Quarterly, we'd sit down with all of our partners, not just Lion, and they'd say, ‘this is what you've done in the last quarter’. Whereas now we're really running that discussion, we're presenting the data back.”

It means Norths can show its partners things they may have previously missed.

“We like to look at trends,” says Lopez. “We ran a promotion last September for craft beer. Historically, we'd say, ‘beer sales were up’, and that's the end of it. But now we're breaking it down by demographics, by postcode regions, by time of day, day of week. And we're able to understand when activations through our partners are actually most effective. That means when it comes to our annual planning days we look back at the last twelve months worth of data and understand what decisions can we make now to assure us the most [bang for buck].”

One insight from the craft beer promotion stands out.

“We looked at it overall across the group and we saw 68 per cent of purchasing was male – so a very male skewed promotion. But we when we broke it down by venue, at The Greens, North Sydney, one of our marquee venues, it was actually skewed 74 per cent female there. So what that means when we look at our craft beer month this year is we actually change the look and feel of the marketing for each venue.”

'Ethical personalisation'

There’s renewed debate around personalisation given last month’s government proposals that – if enacted as currently envisaged – place significant obligations on marketers and media on consent and usage of personal data.

Lopez says “ethical personalisation” was his key takeaway from Salesforce’s Dreamforce event last year in San Franciso, and being crystal clear with members on what’s being collected and how it is being used is work already underway.

“We launched Salesforce personalisation last year on all eight websites across the group last year. So all of our websites are personalised, and that's not looking at demographic or transactional data but based on behaviour,” says Lopez.

“So we're actually now building out our go to market ethical personalisation messaging that we're going to have available for members and visitors when they go on our website to have a read through. And one of sort of the four pillars of that is basing your marketing, your targeting on behaviour rather than personal attributes.”

Behavioural targeting to date is paying commercial dividends, says Lopez.

“Back in the day, we'd send out an SMS about bingo to everybody over the age of 75. Whereas now we’re basing it on behaviour … And there was a huge, huge number from 50 to 60 [years old] in that bucket we would have [otherwise] missed.”

“So we can connect a member to their website visitation if they go to the web from an email link. And then it creates that profile and we start understanding what behaviour does that member show on the web? All of our website is categorised. There's breadcrumbs and subcategories and it builds out this affinity wheel and profile for that one individual website user.”

Connecting the dots and the comms is leading to significant gains in engagement, says Lopez. “The global average click through rate for a pop up on a website is 3.9 per cent. Now, across Norths Collective websites, we're sitting at over 24 per cent click through rates,” he says. “That's because it's a hyper targeted message that users are getting because of the behavioural information that we know.”

CX from CEO to service staff

The app will take Norths' behavioural insight-driven capability to the next level, says Lopez. But the business knows that unlocking the app’s full potential requires a significant shift in behaviour, especially among an older membership cohort. Which is why it is planning a major member engagement exercise.

“A lot of that is going to be done in person – we're going to set up booths and make sure that our members are taken on that journey with us,” says Lopez.

But it’s also why he claims the company is genuinely putting CX and digital transformation at the heart of its business – from the CEO to service staff.

“We've been on a very strong trajectory from the beginning, and that's really because we got buy-in. A big part of a digital transformation journey is understanding that everybody in the organisation is going to be affected by it. From CEO all the way through to reception and our customer facing staff,” says Lopez.

“All of our new staff that come and join our organisation through the induction process, we let them know what our digital transformation vision is – to be a true leader in digital transformation, using new, emerging and sustainable technologies as a means to tell our story, build our brand, and enrich relationships with our communities. That's where we start all inductions. We take them on this digital transformation journey with us, because everybody needs to understand 'the why' behind it.”

Next: Reporting, de-risking growth – and efficiency

Norths has given itself six months from here to have all its new dashboards and reporting in place. “Then we’re going to be using that to help make future business decisions,” says Lopez, i.e. de-risking them, while also hunting cost efficiencies.

“I think once we get to September and if we stick to the timeline, we'll be at a point where next year we'll be reporting regularly … and helping the senior exec team make better business decisions as we look to expand the group,” says Lopez.

Its newfound ability to analyse cross-venue spend is already clearing a path for de-risked expansion.

“Cross-venue spend … has opened our eyes. It has shown us year by year what cross-venue spend we’re getting from a member of, say, Norths in Cammeray versus one of our venues at The Greens in North Sydney. It’s one membership, eight venues – but we never really looked at the value of membership internally,” says Lopez.

“Now when we look at growth and potential future venues and sites, we can start using the member data to see, well, year one, we opened this new venue. We already have 60,000 members – we're not saying that all of them live locally to the venue, but a fair chunk do. And we can understand, just with that target market, what revenue they can bring to the venue without even looking at new [membership] growth,” says Lopez.

“So when we start looking at growing Norths Collective even further, we can use our first party data – and it's a strong, strong database – to understand what can we bring to that new venue as soon as we open the door.”

Five digital transformation tips

Asked for five steps to digital transformation Nirvana, Lopez doesn’t hesitate.

“The first is defining your objectives. Define clear, specific, measurable, attainable objectives and you're going to be set on a good path forward.”

The second is partner up effectively, "and that's critical,” says Lopez, giving partners AFDigital and OSF Digital a wrap, and name-checking app dev partner Reinteractive. “Your partners need to  understand why you exist, what you do, who your customers are and your values need to align. You're getting into a relationship with these guys. So do your due diligence, really understand their capabilities and capacity.” Get the right partners, he says, “and it will pay off tenfold”.

Tip three is “plan, plan, plan”, per Lopez. “Then, when you think you’ve finished planning, plan some more. Because you have got to be able to pivot and remain agile. You can’t expect it to be smooth sailing, because it’s not. You may get thrown a pandemic in the middle of it all. I think we made half a dozen key changes throughout that just came from learning and understanding … because we had so many external systems [at different clubs], a lot of them quite dated … and to connect them all is not easy,” he adds. “Plus, always build out to your [target] capacity. Understand what you want to do now, but also what you want to do in five years. That is really important.”

The fourth tip is to “take your stakeholders on the journey,” says Lopez. “You can't be doing this on your own or just with your team. You've got to ensure buy-in from everybody. Regular training, regular updates – and keep the team on the journey with you as well, both up and down.”

He says the fifth tip is probably the most important: “Start using the system. Now that you've turned it on and you've invested time, money, people, resources into this digital transformation journey, don't be scared to use it. Go in there, get your hands dirty and start reaping the rewards of all of the hard work that you've done".

Avoiding cost blowouts

Lopez's advice for those marketers mulling their next transformation in terms of budget planning?

“It hasn’t been a cheap exercise,” he admits. But growth rarely comes cheap, and Lopez points back to tip number four.

“We got buy in from the right stakeholders at the beginning with an understanding of ‘the why’ behind the reason for doing this journey – and it's definitely paying off," says Lopez. "Norths Collective are now much, much more advanced than our competitors in this space. There's no competitor that has really dived-in to this sort of digital transformation journey. So we're reaping the benefits tenfold.”

But transformation-driven growth does require significant resource – and recognition of that reality upfront is probably wise.

“I remember going through the early scoping phase with Salesforce and there was one slide that showed, 'if you have this many contacts in your database, then you'll need this many people in your team'. We looked at it going, ‘oh, no, we don't need three, it's fine, one's enough’. We were wrong and we put our hands up to say we were wrong,” says Lopez.

“Actually to have the platform users grow [i.e. properly resourced] has been critical – because we could not have grown to where we are today without those roles being created.”