Utilization of AI - Report

Utilization of ai to increase gym membership retention rate
STUDENT DETAILS
STUDENT DETAIL

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Executive Summary
Artificial Intelligence (AI) is the future generation technology that operates for automating
the operations effectively and efficiently. The incorporation of AI minimizes human errors to
zero. The primary aim after designing AI is to automate the operations and to enhance
customer experience. For this report, the selected company is the Virgin Active Health Club.
The purpose of the company is to ensure the healthy life of the people and their goal is to
enhance members retention ratio by incorporating the use of Artificial Intelligence in the
process. This report has concluded that the implementation of AI will fulfil the goal of the
company that is to enhance the membership retention ratio. On the other hand, in order to
fulfil the purpose which is related to ensuring the healthy living of the people, here, the
people themselves have to work on the treadmills and they themselves have to lift the weights
for achieving their fitness purpose. AI can also resultant in enhancing customer experience,
people themselves have to work on their fitness goals to achieve fitness. In this report, three
theoretical models are selected that are customer data journey, big data information and value
flow analysis.

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Table of Contents
Introduction................................................................................................................................3
Theoretical models.....................................................................................................................3
Customer data and customer journey:....................................................................................3
Big data information value chain...........................................................................................4
Value flow analysis................................................................................................................5
Methodology..............................................................................................................................6
Analysis section.........................................................................................................................6
Discussion..................................................................................................................................9
Conclusions..............................................................................................................................10
Recommendations....................................................................................................................11
References................................................................................................................................13

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Introduction
Machine learning (ML) is a subset of Artificial Intelligence (AI). AI is the technology that
enables the human to simulate human behaviour in the form of taking appropriate decisions,
systematically conducting the process-channel, etc. AI is the intelligence system that is made
to perform set operations automatically without the intervention of humans. However, the
technical team can make necessary changes in the program of AI even after its
implementation (Acemoglu and Restrepo, 2018). AI incorporates the use of natural language
processing (NLP), speech recognition and machine vision. It is the branch of computer
science that is mainly concern about building smart machines that do not require human
intelligence to proceed, only set programmers are required to input then the AI system
automatically works accordingly (Adadi and Berrada, 2018). Virgin Active Health Club is the
select health club channel for this report. The company was founded in 1999 in London and
they have 43 stores in the UK. In this report, there will be a discussion about the measures
through which the utilization of AI can help the company to increase the percentage of
membership retention. 4 different kinds of theoretical models will be discussed in this report
with methodology selection. Apart from this, in the end, a few recommendations will be
made so that the management can perform better customer retention.
Theoretical models
Customer data and customer journey:
The customer journey is the step by step activity of each customer. In order to implement the
AI in the Active Gyms, it is important to understand the customer journey data for getting a
clear picture of the decision-making aspects of the customers. For example: with the help of
data from the customer journey, the management of Active Gym will get the idea about
which is the prime external factor that empowers clients to attend the gym. On the other hand,

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the study of customer data will also help the management to analyses the prime factors that
are responsible for demotivating the customers towards the gym. The analyses of the
customer journey will allow the management to conduct an effective and efficient study
about the external factors that put more than 60% influence on the decision making of the
customers towards the attitude of going or denying the gym (Brynjolfsson and Mcafee,
2017).
As Virgin Active gyms want to incorporate the use of AI systems in their process thus it is
important to analyse the role of customer data and big data. Given the heap of ways that each
excursion can take as clients move between various channels after some time, recognizing
which ways are impeding organization development, client dedication and fulfilment is a
major information and examination challenge. The present clients are more engaged and
associated than any other time in recent memory (Calo, 2017). Utilizing channels like social
media and online business, clients can get to pretty much any sort of data in seconds to
illuminate what they should purchase, from where and at what cost. For instance, they
anticipate that organizations should give reliable data and consistent encounters across
channels that mirror their history, inclinations and interests. Like never before, the nature of
the client experience drives deals and client maintenance.
Big data information value chain:
Big data is an emerging field where innovative technology brings various ways for the
company to conduct a detailed study about the utilization of AI for enhancing the member’s
retention rate in an effective and efficient way. As the big data value chain system describes
the flow of information inside the data system as a series of steps that are required to generate
useful insights. In other words, a big data value chain system can empower the company with
the data information in sophisticated manners to conduct an analysis of their target audience.

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For example: the company wants to establish AI for increasing membership retention rates.
For implementing AI, they require to collect the data to understand the external factors that
create hindrance in an individual fitness goal. As it is important for the company that people
achieve their individual fitness goals or they show discipline to regularly attend the gym.
When an individual started paying serious attention to their goals then automatically it will
help the company to accomplish their business goals.
Thus, it is important to analyse all those external factors that create a hindrance for customers
to discourage them from achieving their goals. Big data value chain system incorporates
useful insights from data so that the management can analyse about their customers in an
effective and efficient way. Apart from this big data also brings a various set of challenges
for working. The company has to study each challenge in order to bring an effective AI
process. These challenges are related to the volume of data, velocity, range of data types, etc
(Davenport and Ronanki, 2018).
Value flow analysis
The organization ought to use an improved worth system framework and choice emotionally
supportive network, as conventional practices in production network the board, to diminish
store network cost and enhance stock. The utilization of AI can give ideal arrangements in a
choice emotionally supportive network. By vanquishing issues like item following and
following in the distribution centre, computerized stock administration, rising store network
the executives framework cost, quality investigation and disposing of surrendered items.
Simulated intelligence has occupied the room to fill the hole in the production network the
board for smooth business tasks. Utilizations of AI advances in-store network the board
improve the exhibition and increment the efficiency of the business (Dunjko and Briegel,
2018).

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A robotized quality assessment gives a bit of leeway over manual techniques utilized for
examination at R&D centers (Flasiński, 2016). With computerized quality assessment, the
robot framework modified with PC vision, object identification, and AI calculations, check
items in a three-dimensional view that identifies broken items at ¼th time of human review.
As 40.7% of the organizations on the planet are mechanizing their conventional practice in
production network the executives to drive more clients and providers, while others are
falling behind. The use of AI advancements can grasp the store network the executives
frameworks by giving live item tractability, shrewd stock administration framework, quality
examination, and so on which diminish human mistakes as well as improves and smoothed
the business forms (Etzioni and Etzioni, 2017).
Methodology
The secondary research methodology is utilized in this study with inductive research
approach. Apart from this, exploratory research design is also incorporate in this study.
Analysis section
Utilization of AI can help the company in enhancing the membership retention rate in an
effective and efficient way. With the help of AI, the company can enhance the customer
experience and it can automate many tasks without the occurrence of human error. However,
here it is important to understand that at maximum level, AI and ML process can help the
company in enhancing existing customer experience but it cannot help them in creating the
sense of interest in the customers. For example: with the help of AI, the company can
automate task but with the help of AI they cannot create the sense of interest in the customers
for joining the gym or AI cannot motivate the customers to join. Moreover, with the help of
AI, the company can enhance the experience of the customers in an effective and efficient
way. As with AI they can enable activity systems, smart goals technology, automated

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technology to monitor each customer’s nutritionist levels, etc. By applying all these future
generations changes, the existing and new customers will be fascinated and then it can be said
that the company can experience better customer hospitality (Hassabis, et. al., 2017).
At the point when AI applied to the company’s process then advance IoT and PC vision
innovation can help quicken the way toward a really keen exercise centre. These
arrangements can follow a person's in-rec centre exercise to give a total portrayal of the
action information required for AI-empowered advanced wellness and wellbeing mentors.
Like how Amazon Go naturally tracks the substance of the client's shopping for food, a PC
vision-upheld exercise following framework permits clients to decide the specific activities
and redundancies, just as the force and nature of activity execution of some random exercise
(Huang and Rust, 2018).
Giving fitness centre individuals the choice to get to an answer that consequently tracks their
exercise schedules over the full range of rec centre exercises gives them extraordinary
straightforwardness on progress and gives custom fitted proposals. In addition, fitness centre
chains increase special information bits of knowledge (Konar, 2018). Utilized in the correct
structure, this information will produce included an incentive for the two clients and the
organizations in zones extending from client commitment to inward activities.
Specific activities with time period to implement AI
Requirement areas for AI
implementation in the
Virgin Gym
Time period Estimated cost
Self-tacking nutrition value
system
4 Months €30,000 to €40,000
AI centralized database 3-4 Months €20,000 to €40,000

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system
Analyzing customer journey
profiles
6-7 Months €30,000 to €40,000
The company require to implement the AI in three board aspects. First, they should make
effective system so that the customers can get a regular self-analysis nutritionist value report
in an effective and efficient way. This will enhance the customer service experience in an
effective and efficient way possible. Secondly, the company is still making centralized
database system but they require to make centralized database which is powered by the use of
AI. As the AI database will help the company to track information along with the data
analytics. Thirdly, they also require to prepare a tool which regular analyse the external
factors that are putting their impact in an effective and efficient way.
(Miller and Brown, 2018)
Getting dependable action information is one of the basic elements for such applications.
Numerous applications depend on client contribution to catch this basic data, prompting

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information quality that is exceptionally subject to the individual, making it hard for even the
most intelligent AI mentor to think of significant suggestions. Movement trackers, as Fitbit or
the Apple Watch, have improved the unwavering quality and measure of followed action
information, and wellness gear suppliers are adding to the information stream by offering
progressively increasingly advanced associated gadgets to gyms. Be that as it may, action
trackers by configuration face impediments in what they can track and IoT wellness gear is,
generally, obliged to estimating just the single movement they are intended for. This is the
reason we despite everything see individuals utilizing the old fashioned, pen-and-paper
strategy for following their exercises (Lu, et. al., 2018).
However, it is important to analyse that not only AI but an individual should also make up
their mind for fitness. As AI can only enhance the customer experience, AI cannot change the
psychology condition of an individual. Irrespective of AI, the modern gym also gives latest
machines like treadmill, weight lifting machine, etc. All these machines also fascinate the
gym members but the major problem is that majority of the gym members do not pay
discipline in attending the gym (Makridakis, 2017). They either discontinued to going gym or
they change the gym. That is happening because they cannot bear the pain of doing gym or it
can be said that majority of the people do not like to do hard work in the gym. With the
implementation of AI, the company should also think for making necessary measurements to
enhance the motivation level in the people. Currently, Virgin Gym adopts various techniques
to motivate people and it can be also expected that the incorporation of AI will also resultant
in fascinating gym members in an effective and efficient way.
Discussion
The data analytic information will help the company to evaluate the aspects of AI in an
effective and efficient way. As, with the incorporation of AI, data analytic information plays

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a major role. It will help the company to effectively implement the AI in various aspects of
the gym. It is suggested that firstly the company should implement the AI system in
monitoring the health and nutrition level of the gym members. Later on, the results can be the
great medium of motivating the people because when the people will aware the level of
nutrition in their body then it can be expected that they will become more conscious and they
will continue their gym services (Miller and Brown, 2018). Once the company had developed
successful implementation of AI in measuring the nutritionist levels of the people then the
company also have the option to allow other gym members to conduct their regular test by
purchasing their quarterly membership (Miller and Brown, 2018) .
Apart from this, it is important to understand that only incorporating AI will not benefit them
with the goal to enhance the customer retention. With the AI they should also incorporate the
methods to motivate people because AI cannot walk on the treadmills or AI cannot lift the
weights in the gym. As per the critics, even if in future AI become capable to walk on
treadmills or it become capable to lift weights then also it will be only provide benefits to
robots (advance AI) it will not provide benefit to the general people (Moravčík, et. al., 2017).
Moreover, the major purpose of the company is linked with the fitness of the people rather
than just earning profits. As implementing AI is the great decision but with the
implementation of this future generation technology then should also focus on implementing
the effective means of motivation. However, it can be judged when AI will implement in the
business then it will enhance the customer experience which may result in higher retention
ratio of the gym members (Topol, 2019).

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(Shrestha, Ben-Menahem and Von Krogh, 2019)
Conclusions
 The implementation of the AI will help the company to enhance the customer
retention ratio in the better way. It is suggested in this report that the company should
first start with developing automate nutritional value analysis in the body. By
implementing AI in the gyms, it will improve the customer experience in the effective
and efficient way.
 The analytics of big information data will help the company to analyse the customer
journey. Through this analysis, the company can make details about the journey of the
customers as how they operate and what are the critical external factors that are
responsible for influencing the decision of the people to join or to discontinue the
gyms.
 Analysing customer journey will give the information to the company about the
behaviour of the customers. As, the decision making of the customers affects from
internal as well as external factors. The rise of social media and increasing social

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interaction habits of the people are capable of with over 60% power (external factor)
to influence the decision of an individual.
 Big data value chain analysis is the system through which the company can conduct
the detail analysis about the value chain system of the company in an effective and
efficient way possible. It is important to analysis the norms of the value chain analysis
to effectively incorporate the AI in the system. This is the value chain analysis will
help the company to conduct an effective value chain analysis.
 In this study, it is also concluded AI can only enhance the customer experience, in the
end, customers themselves have to come in the gym to do the work on the machines.
AI will resultant in fascinating the people and it will make people to attain the gym
but, in the end, people themselves have to conduct work on the machines.
Recommendations
 It is recommended that with the utilization of AI in the company, the management
should also work on incorporation of various motivation technique to empower
people for conducting better work out in the gym. As implementation of AI will
enhance the customer experience and it will fascinate new and existing customers but
in the long term when people will conduct effective workout and they get results (in
terms of body transformation) then only they will stay in the gym (Wilson, Daugherty
and Bianzino, 2017).
 They should also develop bots (part of Machine Learning), these bots are specifically
design to sanitized the machines automatically at regular time internal. This is the best
way that can enhance customer experience and the perfect incorporation of AI. The
bots should be design in a particular way that they should sanitize the machines and,
in this way, Virgin Gym can say in the market that they are adopting extreme hygiene
facilities with the utilization of next generation technologies (Yang, et. al., 2019).

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 Once the AI is developed then they should incorporate the digital methods of
promotion instead of utilization traditional methods of promotions. As digital methods
of promotion will help the company to minimize the marketing with the coverage of
large audience in an effective and efficient way. Digital methods of promotions
include the search engine optimization methods, social media promotion, etc. These
are well defined digital promotion methods that can be results in fascinating great
number of populations towards the AI systems of the Virgin Gym (Brynjolfsson and
Mcafee, 2017).

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