Most health and wellness businesses struggle with member or client turnover. For the latest Payments as a Service Tracker™, PYMNTS caught up with Chet Brandenburg, chief product officer at MindBody Online, to discuss how he’s trying to acquire and retain customers with a full-service scheduling and payments app for health and wellness businesses. Find that, along with the latest headlines from around the space and a directory with profiles of 89 players, inside this latest Tracker.
Talk about turnover.
Health and wellness businesses have serious problems retaining customers. According to one estimate, these companies see half of their clients turn over every year. And as a result, companies are eager to find ways to turn any consumer into a loyal, repeat customer.
To make matters worse for these businesses, even as Americans spend more than ever at health and wellness businesses, like gyms, salons and other service providers, missed appointments continue to cost individual businesses and practices as much as $1,000 per appointment.
But in today’s fast-moving world, where plans change quickly and appointments can easily be forgotten or missed, speed and convenience are essential in keeping customers coming back again and again. Even when it comes to taking care of themselves and their bodies, consumers are constantly trying to find ways to simplify and speed up their activities in order to make them more efficient.
That’s where companies like MindBody Online come in. MindBody allows members and owners of a host of health and wellness business to schedule and pay for their appointments through its smartphone app.
PYMNTS recently caught up with Chet Brandenburg, the company’s chief product officer, to discuss how full-service payments can impact the health and wellness industry, how loyalty and rewards features can keep customers coming back and what he sees on the road ahead for his company and the space as a whole.
Keeping customers loyal
Brandenburg noted that, because the companies in the health and wellness industry see 50 percent annual client turnover, they are constantly trying to bring new clients in to their business and keep them coming back. As a result, any solution that looks to serve this market must help entice and keep their customers with tools such as loyalty and reward solutions.
Brandenburg said he believes health and wellness businesses can operate two different types of loyalty structures, as MindBody does. First, companies can employ rewards-style programs, in which customers rack up points by spending at a certain business and can use those points to pay for other classes or products, a program that is popular with many businesses currently.
But, Brandenburg said, wellness centers can also use tools like the one offered by him and his team to make customers even more loyal. MindBody clients can enable their customers to sign up for multi-packs of classes, which include admission to five or 10 individual sessions for one price, as well as recurring monthly or yearly subscription services.
By using these different pricing options, along with traditional rewards programs, Brandenburg said, companies attract more new customers and can help ensure they stay loyal.
“These are very popular with our clients right now,” he said. “With the markets we operate in seeing 50 percent annual churn, retention and acquisition are big concerns, and those are both great ways to solve those problems.”
So far, for MindBody customers, loyalty has been high. According to statistics provided by the company, 50 percent of MindBody app users who purchase an introductory offer or class become loyal or repeat customers, compared to just 6 percent of new customers becoming repeat customers at the average fitness club.
Along with customer retention and acquisition issues, Brandenburg noted that missed appointments are typically big challenges for health and wellness companies.
He said that a missing payments functionality was at the heart of the missed appointment problem. He noted that integrating payments into scheduling was the most important part of the solution, as it allowed making the appointment and payment process as simple as possible for both customer and business alike.
“It’s the integration of payments that really completes the value proposition for this kind of solution,” Brandenburg said.
He noted that the ideal full-service payments app for the health and wellness industry would help customers by easing the hassle of paying before or after their appointments or having to bring wallets or other valuables with them. MindBody does so by allowing customers to make and pay for appointments quickly and easily, using a saved credit card of their choice.
Simplifying payments solves much of the problem for not just the users but also for the businesses. Users can pay for extra classes or other purchases at the business’ brick-and-mortar location without having to have their credit card or cellphone with them. MindBody provides its partnering business with a front desk tablet that lets customers log in and pay through their saved payment method.
This relives a pain point for businesses, Brandenburg said. Integrating payments with scheduling allows business owners to make appointments without worrying about giving away a spot to someone who may not actually show up for the appointment that they made earlier.
“These companies don’t want to deal with payments — that’s usually their least favorite part of the job,” he noted. “They’re in business because they’re passionate about serving others and improving wellness, not about collecting payments. There are also a lot of businesses that don’t want to be left on the hook if someone doesn’t show up for an appointment, but since the credit card is stored, if someone doesn’t show up, they can get charged a no-show fee.”
More than just payments
There are also several other tools that gyms, salons and other businesses need in order to function to their fullest potential, Brandenburg said. The software produced by his team includes staff scheduling tools, automated reminders and confirmations and allows business to establish profiles of regular clients to get a better idea of what services they have purchased in the past and which they’re likely to revisit.
It also offers data-driven resources, such as marketing tools that are designed to help introduce customers to the businesses, along with reports that show which classes or products are selling best and which may need a boost. The data can also help businesses identify what classes or programs have the most empty spots or no-shows, enabling companies to reschedule classes or change their strategies in order to entice more guests to actually make good on their appointments.
“We try to be a one-stop shop in terms of the software and technical solutions that our health and wellness customers need,” Brandenburg said. “Obviously, a big part of that is through payments, but we offer a lot of services in order to help our clients simplify their business.”
The state of apps to come
Since its founding in 2001, MindBody has found success with its original business model, growing by more than 300 percent from 2012 to 2015 and landing on the Deloitte Technology Fast 500 list five times since 2012. Despite this, Brandenburg said he and his team are hard at work to create new features and functions for the company’s health and wellness business clients and those businesses’ customers, while still helping tackle basic pain points, like appointment scheduling and cancellations.
The company recently introduced its own MindBody app. The new app allows users to book appointments and pay at not just one location but at any business that uses MindBody. Brandenburg said that many customers of MindBody clients visit several businesses that use the software and that, with the new app, they do not have to have multiple apps for the various businesses.
He also noted that the new app opened the door for other expanded features, such as a loyalty program that could roll over reward points from business to business into one account, helping the user accumulate rewards faster.
Brandenburg also said he expected more consumers to start making and paying for their health and wellness appointments online or via a smartphone, whether with MindBody or another similar company.
With more Americans than ever before turning to health and wellness smartphone apps, it may not be long before there are fewer missed appointments and more loyal customers for health and wellness businesses and providers.
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About The Tracker
The PYMNTS.com Payments as a Service Tracker™, in collaboration with Cayan, is designed to give an overview of the trends and activities of merchant platforms that not only enable payment processing of new and old technologies but also integrate with other features to improve the merchant’s experience, including customer engagement, security, omnichannel retail, analytics, inventory management, software and hardware management and more.