This is the second part of a two-part series by ABC Financial Services on revenue cycle management and why securing and protecting your data is going to be even more critical in the decade ahead.
Our recent article Health Club Revenue-cycle Management: What Is It And Why Does It Matter examined the importance of a comprehensive approach to turning booked membership revenue into dollars in the bank. By applying this holistic concept to health and fitness clubs, we provided a tangible approach to optimize the revenue life-cycle through a combination of proven technologies, disciplined processes, and expert people.
Revenue-cycle management effectively manages billing, handles delinquencies, supports member issues, maximizes deposits, and provides reporting and accounting to deliver complete business transparency and data insights. The thoughtful adoption of RCM commonly increases the amount of revenue received from billings by 5 to as much as 7%. Implementing effective RCM is not easy, and requires significant specialist expertise and technology. Clubs should seek from a capable partner who can deliver an end-to-end solution. Well-constructed RCM approaches have tangible benefits which extend beyond optimizing revenues, particularly staying compliant with user data requirements, payment security, and respecting and protecting your members’ privacy.
The Implications Of Security And Privacy For Health and Fitness Clubs
Effectively collecting, storing, and using member data is providing businesses, especially in the fitness industry, with significant competitive advantages including better understanding of member engagement, the impact of current programming on retention, and more effective prospect marketing. ABC has helped clubs drive growth by using data insights and technologies for years. The growing fitness brand, 10 Fitness is a great example. 10 Fitness pursued a insights-led approach enabled by ABC Financial’s expertise in leveraging da and technology to improve billing and collection processes. With personalized reports on financial performance, membership, and sales delivered via ABC, 10 Fitness gained critical insights and saved significant time in the back office, all while expanding to new locations. This was key to executing their growth strategy. Explore the 10 Fitness story.
The use of these data insights has also been a boon for members as operators deliver more seamless, personalized, and faster experiences. The challenge inherent in a data-driven business is the constant, massive flow of detailed member and prospect information which creates an increased risk of data being lost, stolen, or compromised. Obviously, this can adversely impact both a club business and its members.
The problem is not limited to large brands. Regardless of the volume of transactions processed, a data breach can happen to anyone. According to the Privacy Rights Clearing House, there were over 2,000 data breaches worldwide in 2019 alone. Only 4% of these hacks were “secure breaches” where encryption technology was bypassed to steal data. Today, hackers are becoming more creative in finding ways to access personal information in databases if the proper infrastructure is not in place.
Among the many problems a data breach creates, some of the most troubling include:
Promptly notifying members whose personal information has been compromised;
Facing possible litigation and legal defense charges; and
Suffering from a damaged reputation and its associated revenue impact.
The consequences of cyberattacks continue to surge, with such incidents now costing businesses of all sizes $200,000 per incident on average, according to the insurance carrier Hiscox. Sixty percent of businesses that suffer an attack go out of business within six months of being victimized.
Despite these facts, according to Keeper Security’s 2019 SMB Cyberthreat Study, 66% of senior decision-makers at small businesses believe they’re unlikely to be attacked by online criminals. Similarly, 6 in 10 do not have a digital defense plan in place, emphasizing the need for heightened industry awareness and education.
“Attackers are getting smarter, attacks are occurring faster, and incidents are becoming more complex,” cautions Justin Fier, director of cyber intelligence and analytics at cyber defense firm Darktrace. “The latest cyberattacks speedily exploit vulnerabilities in computer networks — which [can be infected] like human immune systems, changing thousands of times per second and can overtake even major networks in an hour and a half.”
What Can Smart Clubs Do About Cyber Threats?
Data breaches are a serious threat to your computer system’s security, your club’s reputation and member relationships, and the associated costs could be catastrophic for club. Having a revenue-cycle management solution which provides and continually enhances a best-in-class data protection infrastructure is a must.
Fitness businesses need a trusted and capable partner like ABC Financial to guide them through the process of wisely adopting technologies while maintaining best practices that mitigate cyber threat risks. Data security capabilities, in-house billing expertise, and more must be kept in mind when selecting a technology vendor partner, and are among the many reasons why ABC Financial is the partner of choice for leading fitness and health club brands.
For more information on why securing and protecting member data through best in class revenue-cycle management is so important for club operators today, reach out to the team at ABC Financial Services.
About ABC Financial Services
ABC Financial (abcfinancial.com) is a premier provider of technology and related financial services for the health and fitness industry, renowned for exceptional client service for clubs and their members. Its market-leading billing and collections solutions automate the revenue cycle that enable owners and operators to achieve better financial performance, all in a Software-as-a-Service and cloud-based platform. ABC’s comprehensive technology solutions include DataTrak advanced health club management and MYiCLUBonline extensible member engagement platforms that allow owners and operators to efficiently manage employees, members, resources, sales and drive improved member engagement. Founded in 1981, ABC helps more than 7,500 health clubs across the United States, Canada, Mexico, and Puerto Rico perform better and more profitably. ABC Financial is a Thoma Bravo portfolio company, a private equity firm based in San Francisco and Chicago (thomabravo.com).