Early last year, ClassPass was under significant threat from the pandemic but managed to quickly innovate on its operating model to mitigate the impact—something the fitness industry can learn a lot from. How did they do it?
During our Power Session with Sam Canavan, Managing Director for APAC at ClassPass, we talked about the future of fitness, branding and growth strategies. Here are our top learnings (condensed and edited for clarity) from the session.
SC: As a two-sided marketplace, we've got our venues on ClassPass as supply and our gyms and our consumer base—the gyms and studios—as our demand. But among supply and demand, it’s a mantra for us that we say ‘supply is the product’.
If you look at other marketplace businesses like AirBnB and Carousell, their branding and PR can be beautiful, with the sexiest positioning and vouched for by the world’s best influencers. But if the actual product isn’t up to scratch and the supply is dry, that viral loop is never happening, and you’re never going to get the stickiness you want in your product. Only once we’ve built substantial supply, can we then think about marketing.
SC: In our eight years of running and launching in 30 countries, our refined approach for building users is to send a sales team to the new market where they’d be there for six weeks knocking on doors of yoga studios, massage parlours and gyms, selling the ClassPass platform.
That said, building supply and marketing aren’t always mutually exclusive, so we often boost our supply-building with marketing efforts. When we launch, for example, we’d want a hundred influencers sharing about Barry’s Bootcamp, have media exposure for the next six months, and so on. By doing so, we can use marketing to generate demand from the supply we’ve created.
SC: One of the most important things is to make sure your policies and customer journeys are as user-friendly as possible, and that you don’t discount value in your customer service. For instance, we used to make it hard for people to cancel classes on the app but it’s a mistake we learned from and now people can freely cancel if they wish to. Such empathy is essential to get right, especially during a pandemic when people might be facing hardships that make using ClassPass a priority.
Another way to build credibility is to ensure that the supply you build is credible from the get-go, since we’re only as good as the quality of our partnering gyms and studios. At times, we will refuse a studio looking to partner if they have given subpar experiences, or if they don’t meet our guidelines for providing high quality service. In short, you’d want to get high-end providers on board with you and give your users the best experience.
SC: Everything we do is centred on trying to help our partners have the best direct business they can. So, the partnership should really only be a cherry on top for their business, and they should be the ones having the cake and eating it.
Our litmus test to see if our partners can remain profitable is to know whether the business can survive if the revenue from ClassPass is gone. So the minute we see that we're taking more than 25 to 30 percent of their revenue, we would want to take a step back and act as a consultant for them, probing into why they might not be getting enough members or why ClassPass users may not be converting to their own programmes and trials. We may even provide some of our data to help them improve their business.
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