How to approach this problem?

Question

Hello experts,

I recently came across the below-mentioned question in a boutique consulting firm. No other information was given. Strictly qualitative question to test creativity. Would you mind sharing your answers or thoughts on how you would have done this or what 3 things you would have taken into consideration to deliver continued revenue and profit growth?

Over the past 18 months, a lot of work in our Leisure and Retail sectors has focused on digital platforms many of whom have enjoyed significant growth through the pandemic. One example of this is within fitness as gyms close their doors in March 2020 many personal training apps saw a rapid rise in subscribers as fitness enthusiasts found ways to continue their training from home.

However, as gyms reopen and we all return to the office many fitness apps are struggling to keep these new subscribers.

If you were in charge of a fitness app, what three things would you do to deliver continued revenue and profit growth?’

Answer 1

Hi there,

I love this question. Very reflective of current case questions (and exactly why generic frameworks don’t work!).

Fundamentally, the best solutions here involve *expanding*:

1) Expand the product/app so that it is all-encompassing. Make it a full health app that includes diet/nutrition, general exercise (outdoors incl.), blood pressure monitoring, etc

2) Create an “omnichannel” experience. Partner with a gym (or gyms) to create A flexible workout experience. As in, customers can participate in workouts at the gyms and on the app (sessions could be streamed live, etc)

3) Get scale. You need to merge with and acquire other fitness apps in order to create a full ecosystem.

Answer 2

Some options:

Sell more to your current customers (upsell and cross sell opportunities)
Get new customers (find out who is still joining / or not leaving the app, and focus your marketing efforts on that segment)
Retain existing ones (find out who is leaving, and make special offers so they stay longer)
Focus on different segments (e.g. the people who didn't go to the gym in the first place, and prefer an app because it is cheaper/more practical, etc.)
Review business model (e.g. partner with physical gymns)
Diversify (i.e. find adjacencies you can expand to) or expand to other markets (i.e. other languages, etc.)

Answer 3

Post your solution here for us to comment. Best way to learn.