As fitness business operators we all essentially have the same high level purpose: improving the lives of our community. One layer beneath that, however, our commercial goal is to maximize shareholder value. Given our business model, that means a few things. Firstly, our business is very much made up of fixed costs, meaning that on day one our monthly expense number creates a big hurdle to jump over with revenue, but once we do, the incremental membership revenue created will fall directly to the bottom line (as does the gross profits of items such as training and paid programming).

Secondly, we are faced with the concept of customer acquisition cost (CAC) and lifetime value (LTV). We need to acquire new members as efficiently as possible (low cost) and try to make an ROI on them over time by selling them lots of products and services. It may be that your customer costs on average $150 to acquire in the form of sales and marketing, but then you may make $750 over the course of their life with you, leaving you with a “net LTV” of $600 in simple math, ignoring the time value of money for this explanation. The challenge for fitness operators is to maximize that LTV and have the ratio between CAC and LTV be as high as possible (in this case 5:1), and a net LTV as high as possible (in this case $600).

In the fitness business, the LTV expansion comes from having greater length of stay, and more secondary spend. (See Graph) So if having a greater length of stay and more secondary spending is the basis of the game, the question is will the onset of digital fitness erode our numbers or grow them? Will digital fitness act as a competing force and make it more expensive to acquire new customers, as there are more competitors to service the demand, or can digital fitness be leveraged to help extract more LTV over time for the operator?

Make no mistake, smartphone apps that help you workout at home, play a role in keeping consumers accountable, or connect you with other exercisers can be seen as a rival force, chipping away at those prospects in the marketplace. However, MYZONE has been built differently. MYZONE has been built through the lens of the operator. It has been built specifically to help operators engage their members, and extract more LTV via new member on boarding, a value add to training services, and increase member retention.

New Member Onboarding

It is widely accepted that members who engage in the first 30, 60, or 90 days of their membership are members who will stay much longer and be worth more to you in the form of LTV. MYZONE is being used by clubs around the world as a tool to facilitate this. On joining, the member is given a MYZONE challenge, “if you earn X points in the first 30 days we will reward you with Y.” By using this basic form of gamification you are driving the behavior you want, affecting what you can affect, and in doing so increasing the likelihood of long tenure and deep engagement. Studies show that by applying this tactic you can take your new members average visit from 5.62 visits to 8.73 visits per month for the first 2 months. Gamification with extrinsic rewards works, and tracking the effort new members put into exercise in the first 30, 60, 90 days is correlated with how deeply they engage.

Enhancing Personal Training

Trainers typically only see their clients twice a week, however the results of this client comes down both the cardio homework they complete, and they food that they eat. The MYZONE platform has been built to help trainers keep their clients accountable to their cardio, using the smartphone app to “thumbs up” the workout or post a comment. Further, the app has a photo function within it to keep a convenient timeline of the food they consume, helping the trainer to give corrective feedback. This value add takes the trainer from being an hourly appointment to a comprehensive coach, building value, tightening the relationship, and driving PT retention.

Validating HIIT

HIIT training is where many clubs in 2016 will derive their paid programming fees. The essence of HIIT is to train at a high intensity in order to achieve EPOC or after burn. The MYZONE live display keeps the member accountable to this level of intensity, and it validates to them that in order to ‘go there’ they need the support of a group, the encouragement of the coach, and the feedback of the live display. Those 3 things is why they pay extra. “How could I burn 900 calories myself? I need this group.” MYZONE helps prove that with the calorie burn metric and points system helping to retain paid programming becomes easier. It gives a tangible handle to promote to other members as a proven solution.

Retention of Membership

All roads lead to Rome, and all retention studies show that higher usage equals longer tenure of membership. However, as operators, we are faced with members who join up with enthusiasm, some hit and some miss. Those that “hit” are then faced with attrition in enthusiasm, attrition in usage, and attrition in membership fees. Surely once we engage them in their first 30, 60, and 90 days, we are then challenged to engage them over time. MYZONE is set up for a form of gamification which continually rewards members, through goal attainment, challenges with friends, and a platform that can reward members who hit the benchmark each and every month. Consider giving every member who reached the World Health Organization guidelines an entry into a raffle. This could be monthly, and never disappearing. The lottery creates wonderful social fodder and helps members keep the eye on the monthly goal. Our client studies show we can increase usage by over 25% with engagement in these type of lottery challenges.

As a fitness business operator, that is how you can apply MYZONE to onboard, engage, and build LTV. Like smartphones and social media, digital fitness is not going away. The question is: Do you have a plan to engage with it so your business can win?

Taken from the National Fitness Trade Journal - Spring 2016 Edition