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A fitness center brand recognizes they are in a space with a wide array of competitors, as well as many competitors who are in the process of reinventing themselves in terms of positionings, offerings, etc. While the client had legacy base membership offers that they had been using for years, they wanted to make sure they were in the best position to attract new customers with this offering – not only in terms of pricing, but also the specific features included. And, it was important to understand membership interest in the context of primary competitors in the space.

In addition to understanding what components should be offered, as well as the price points for various components, this brand wanted to understand interest in various add-ons to a gym membership. 

The research team developed an online survey with a discrete choice exercise to determine the best offering to move forward with.

Problem

A fitness center brand wanted to ensure it was in the best position to compete in a very fragmented and competitive marketplace. One of their primary objectives for the year was to shore up their base offering, but they needed help figuring out not only how it should be priced, but what should be included in it to optimize interest, revenue, and profits.

On top of not wanting to alienate their current members, this gym also wanted to ensure it was maintaining its identity, and not putting itself in a place where it would start emulating its competitors – or grow too quickly/beyond its means.
 

Result

The research identified the types of training and coaching features that were desired. It also confirmed that without drastically lowering prices, it would be difficult to pull share from other less expensive fitness centers (which our client anticipated going into this research).

Unsurprisingly, the lower prices garnered more interest, but for many of the elements, revenue and profits were much higher with the higher price points, and for some areas, interest stabilized once the price reached a certain threshold.

When it came to training, certain formats were more preferred than others, which left the client with the opportunity to potentially offer the other training formats as a-la-carte options to the niche groups who would be interested in them. Other add-on features tested outside of the exercise also showed promise, with a majority interested in using them, and with strong anticipated frequency.

At the end of the day, our client was able to take the analysis we provided to test different iterations of membership packages within an Excel-based simulator, assessing how performance fared vs. offers that currently exist, so they could create the best possible base membership(s) moving forward.
 

Solution

An online survey with a discrete choice exercise was employed to determine the best offering(s) to move forward with.
 
The sample included both current gym goers (members and competitive members) and gym intenders (not members but likely to join a gym). They were presented with several screens that included different combinations of features for our client’s gym (with different price levels), as well as static existing membership offers for the primary competitors. On each screen, they either selected from one of four membership options, or they could select none of the options.

Beyond the primary element of the survey (the discrete choice exercise), those who selected at least one of the gym membership configurations were also asked follow-up questions about interest in membership add-ons (in the context of a membership they had previously selected). In addition to interest, they were also asked anticipated frequency of using the features to aid in understanding potential revenue/profitability.

Analysis of the data included:

  • Determining which features have the biggest impact on interest
  • Price sensitivity for features where we tested different price points (including an assessment of revenue and profit)
  • Optimal memberships to maximize revenue and profit
  • Assessment of add-ons

Our client was also provided with a robust Excel-based simulator tool that allowed them to see how different combinations of membership features impact not only interest, but also revenue and profit. This was instrumental in our client understanding where making changes provided better potential vs. the current base membership offering.