A project which commenced over three years ago with initial support from the LGA’s Productivity Experts Programme and phase one will launch in June 2019. Initially it was set up to maximise income potential of the council’s leisure assets, especially a new leisure centre, but the programme of work has developed into much more than this.
Councillor Julia Jeapes, Cabinet Member for Leisure (2015-19) championed this project and commented: “We have always valued our relationship with our leisure customers and the new ourChelmsford card will enable the council to take this a step further. It will create a much stronger customer base, which has been branded and structured in such a way that it will form a solid foundation from which we can exploit the potential of a wider range of council services.”
The challenge:
Having explored and implemented numerous initiatives across all the council’s services, the challenge is to continually identify new approaches to generate sustainable revenue savings to meet current and future budget gaps.
The council had embarked on the construction of a new £40 million flagship leisure centre with a target revenue improvement of £500,000 per annum to be achieved. This and other existing leisure facilities continue to operate via an in house model and this remains the council’s preferred approach going forward.
Aligned to the Leisure offer, there was a need to refresh the Council’s Leisure card scheme to entice more customers to it’s services. As part of the council’s digital transformation programme and the strengthening of data protection legislation, there is a need to implement better linkages between systems. These linkages allow the council to create a more cohesive approach to communicating and engaging with residents and customers; as well as understand user/non-user behaviours and profiles for future planning and improvement.
The solution:
Using resources provided from the LGA’s Productivity Expert programme, the councilwas able to engage an external advisor. The experthad been identified due to significant experience working with other Local Authorities to deliver new commercial opportunities. The first day long workshop with the council’s management team focused on reviewing the achievements secured to date and how they have been implemented. He identified that the council had performed well in taking a fairly “traditional” service lead approach to achieving savings, particularly in securing additional revenue or making expenditure savings from the council’s hard assets (buildings, land and vehicles).
An extended management team focused on generating a wide range of new commercial opportunities using a Business Re-engineering model as the basis for evaluating each opportunity. The expert encouraged the group to appreciate the significant commercial value of the Council’s soft assets, which were often not understood or exploited by local authorities; whereas such assets in the hands of a commercial operator would be viewed as “stored value”.
Time was spent considering in detail the opportunities afforded by maximising the benefit from the following soft assets:
- Trust and credibility
- Market position
- Customer relationships
- Data
The team quickly appreciated that the relevant soft assets, combined with the right Business Model, could act as a multiplier to commercial growth.
It was agreed to focus on the under exploited Leisure card and to use leisure and lifestyle as a way of broadening the existing offer and creating greater appeal.
A cross councilteam of five managers was set up to develop the proposition with initial guidance fromthe expert. This group explored the full potential of the soft assets and how they could be maximised with any future proposition, for example, as a direct provider of leisure services the council held over 30,000 customer records (including email addresses).
A new leisure and lifestyle account would be established which would use the Council’s new Microsoft Dynamics platform to (in time) be the customer interface with many other services (e.g car parks). The card would capture data and provide opportunities for communication and marketing not currently possible.
Following internal consultation and public engagement, a new ourChelmsford account is about to be launched to coincide with the opening of the new leisure centre in June 2019. Phase 1 would see the scheme being made available throughout leisure centres only, utilising latest access control/radio frequency identification technology including cards, stickers and bands. Phase 2 extends to other culture and entertainment services, including partner organisations (restaurants, cinemas) through collaborations on offers. Phase 3 would include other council services such as play, car parking and so on which would strengthen the use of the cards (e.g. in leisure centres on barriers and in car parks with payment machines) and provide residents with a single customer view of all their interactions (bookings, payments, applications) with the council. It is recognised that other “city” type cards have included other services provided by first tier local authorities (such as libraries) and transport companies. This is not part of the current proposal but has not been discounted in the long term.
The phase 1 card (more an “account”) involves a three tier structure
Premium – this aims to create a “club” type offer, whereby customers are prepared to pay a monthly sum (up to £44.00) for unlimited use of leisure centres and receives a wide range of additional benefits (such as exclusive and better advance booking privileges). This currently equates to 3,500 customers and around £1.3m income and the aim is to increase with a new pricing strategy - 1,000 customers within 12 months to £2 million net income. As phases 2 and 3 are implemented these card holders will have access to other premium services within the council and it is anticipated that the numbers will increase.
Plus – this relates to the current Leisure Card and there are around 15,000 customers paying £5-15 per annum in return for a discount on full priced activities. This will continue as an annual fee with the aim to upsell and convert these to premium card holders.
Lite – is new for Chelmsford and forms the baseline level for all those with accounts on our sports booking system. The ultimate aim is to convert all local residents to opt into this free of charge account, providing the councilwith a huge database for engaging with and marketing to those in and around the City. Clearly the aim is to build customer relationships with these card holders and provide marketing opportunities to incentivise new services. In time, residents may be required to at least hold a “Lite” card to access currently free services, such as access to museums, play schemes etc.
This structure itself is not a significant innovation and largely follows the previous offer (with a much simpler category and standard and discounted pricing structure); however, the new ourChelmsford is set up with a solid foundation which provides future growth opportunity. Using the established trust and credibility and customer relationships it aims to maximise the revenue potential from this card through careful marketing of a wide range of councilservices not previously achieved.
- Tying this project into other initiatives linked to the council’s drive to improve its digital communication channels, allows us to be:
- more effective in creating awareness,
- targeting and reaching the right audience,
- better understand the needs of users and barriers to prevent access/use,
- understand how effective the Council’s services are being used by different sectors of the local community, such as BAME, people with disabilities and LGBTQ+ users
Creating strong linkages in understanding usage with a more sophisticated booking system and ourChelmsford data, allows for better directed awareness and promotional marketing campaigns via web, social media platforms, email marketing and so on. Use of profiling and segmentation data (including postcode) from ourChelmsford, allows us to capitalise on the council’s new advanced GIS mapping project.
The ourChelmsford project has been tied into the council’s new corporate plan, and it’s single customer view aspirations, which shows the council’s commitment to growing and developing this brand. The branding has been carefully worked up to achieve a number of objectives to highlight the need to join and belong to a scheme which will offer real benefits. The connecting of services is worked through the strapline (Join, Connect, Enjoy); the “dots” and the place names again strengthens the offer for all, including some of the parishes and villages outside the City of Chelmsford.
The impact
It is not yet possible to demonstrate the impact of this project as it will not go live until June 2019. However key estimates for the first 12 months include:
- Supports around £5 million of leisure income
- Target 4500 Premium members = £2million per annum
- Target 15,000 Plus card = £180,000 per annum
- Target 40,000 Lite card holders
The marketing potential of the new leisure management booking system will provide more sophisticated opportunities to target various groups to try new activities as well as communicate with customers. This all strengthens the customer relationships which is identified as a key under exploited soft asset.
Some initial work has been carried out to look at ways of selling other goods and services to the customer base, for example gym products, yoga mats etc through fulfillment partners.
The whole process has enabled a full review of the pricing strategy within the leisure operations and this has focused a great deal of attention on the council’s priorities and helped to iron out anomalies and simplify the process from a customer’s perspective – this piece of work alone is likely to generate an additional £200,000 revenue per annum with minimal impact on customers. This has also removed a traditional approach to “concessionary” charges and introduced a range of discounts to target use at off peak times. Whilst tightening the eligibility criteria for some discounted rates, the councilhas been able to afford to target a key under participating group within the leisure centres by raising the age for a discounted rate from under 18 years to 21.
The project is not only important for the leisure operations but for the whole council. If the scheme is launched on a secure footing and is well supported by residents, then the foundations will be in place to extend the card to other services.
How is the new approach being sustained?:
The business model is financially sustainable but is wholly reliant on maintaining a strong base of ourChelmsford account holders. To ensure a critical level is achieved all leisure customers will need to hold at least a free card to access the Council’s services. This should give the project an immediate 40,000 customer base from which it can work to exploit future commercial opportunities.
Lessons learned:
A review is programmed for both three and twelve months post launch to assess progress. This will determine the pace of progression to phases two and three.
Based on the process to date the main issues identified are as follows:
- Involve a wider group in the planning, so that other services can see future opportunities
- The ICT platform (booking system to maintain/operate it and online application) is key to the future success of a council wide card and therefore key players from the Digital Services team should be involved from the outset.
- Allow sufficient budget for branding and marketing
- GDPR – ensuring marketing opt-in data is linked to other systems holding this type of data, to enable effective application of a single opt-out
Expect to explain any changes in a pricing strategy very carefully, as customers vociferously challenge above inflation price increases without always understanding or assessing the value of a service
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