Case Study
Building a Gym Membership Package – From the Ground Up
overview
A fitness center brand wanted to position themselves to attract new customers (in an already competitive environment). To do this, they knew they needed a better understanding of consumer needs and interests, including perspectives on pricing, features, and add-ons.
C+R developed an online survey with a discrete choice exercise to help the brand determine the best membership offering(s) to promote.
THE PROBLEM
Ready to Compete
A fitness center brand wanted to position itself to compete in a 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 how to price it and what to include in order to optimize interest, revenue, and profits. Further, the gym wanted to maintain its identity and avoid alienating current members or growing too quickly.
OUR APPROACH
A Discrete Choice Exercise Provides a Clear Roadmap
C+R developed an online survey with a discrete choice exercise to help the gym determine the best offering(s) to promote. Our sample included both current gym goers (members and competitors’ members) and gym intenders (not currently members, but likely to join a gym).
Respondents were presented with several screens that included different combinations of features for our client’s gym (with different price levels), along with static existing membership offers for the primary competitors. On each screen, respondents either selected from one of four membership options, or selected none of the options.
Respondents who selected at least one of the membership configurations were asked follow-up questions about interest in membership add-ons. To aid our client in understanding potential revenue/profitability, these respondents were also asked about anticipated frequency of feature use.
Data analysis included:
- Features with the greatest impact on interest
- Price sensitivity for features where different price points were tested (including an assessment of revenue and profit)
- Assessment of add-ons
Following the analysis, we provided our client with a robust Excel-based simulator tool that allowed them to test how different combinations of membership features impacted consumer interest, revenue, and profit. The tool was instrumental in helping the client understand which levers to pull in designing the most attractive and profitable offering.
The result
An Excel-Based Simulator Creates a Fast, Easy Way to Evaluate Optimal Membership
Our research confirmed that without drastically lowering prices, it would be difficult to pull share from other less expensive fitness centers. 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, some formats were preferred over others, giving the client valuable information about the potential profitability of certain a-la-carte offerings. Other add-on features tested outside of the exercise also showed promise, with a majority of respondents interested in using them, and with strongly anticipated frequency.
At the end of the day, our research findings allowed the fitness center brand to test different iterations of membership packages and select the best possible base membership(s) offering to launch.
proven experience
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