ClassPass CEO: How Digital Platforms Have Innovated Health, Fitness – pymnts.com

Posted: October 5, 2019 at 9:47 am


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Consumers are creatures of habit but those habits can be complex, and can certainly vary according to such factors as geography, age and even fitness level. Businesses that can tap into those habits can often tap into a gold mine. However, it can be much harder than it seems, even for the smartest and most data-driven of entrepreneurs.

Thats the sense one gets after listening to Fritz Lanman, CEO at ClassPass. During a recent high-energy PYMNTS discussion with Karen Webster, Lanman talked about the value that ClassPass designed as a one-stop digital shop via which consumers can access gym classes and related programs brings to the modern health-and-wellness market, and the lessons the company has learned along the way, lessons that can be applied to other operators in the digital realm.

The appeal to an investor and entrepreneur like Lanman? For starters, the health-and-wellness trend keeps gaining steam, and there is little doubt that younger consumers will keep up that work. In addition, data and tech are at such a point that offering digital and mobile alternatives, and options for fitness-related classes, can be done in a seamless way a way that includes a seamless payments experience, too. Furthermore, consumers are always looking for variety, and for community something a digital operation like ClassPass can help build in almost a social-media-like way.

Indeed, those are some of the reasons that led Lanman to view ClassPass as worth his money and time and to become one of its Seed investors very early on. Not only that, but the nature of working out is changing for many consumers.

Our customers are coming in from the couch, or traditional gyms, or running, he told Webster. They are new to group work, which we think of as super-efficient for maintaining motivation and having that community element.

Habits And Sushi

Even the least fitness-inclined know that group work assuming the tone is positive can help anyone do that extra set of sit-ups, and thats the part of human nature that ClassPass is trying to tap. Simply put, ClassPass offers consumers who pay a set monthly fee to gain access to facilities operated by some 22,000 partners in about 2,500 cities around the world. Experiences covered under a pass can range widely, from yoga to boxing, weights, dance and beyond. ClassPass enables what it views as a seamless booking and paying experience online or via mobile devices, and helps its partners get rid of their excess inventory while, perhaps, gaining new customers. The company also offers workout videos that users can access via their mobile devices.

Throughout the ClassPass experience, habits are front and center. Our customer habituate is how Lanman described it to Webster. New ClassPass users tend to shop around for classes, programs and fitness experiences that suit them, then stick with what works.

Its kind of like a food delivery experience, he said. Once you find your sushi restaurant, you dont keep looking for sushi.

Of course, not everyone wants sushi every night (and one really shouldnt eat sushi every night in any case, lest they risk mercury or Sake poisoning) they might want pizza or other food to break the monotony. Thats where a service such as ClassPass can come in as well.

The discussion between Webster and Lanman happened as the company undergoes some significant expansion. Earlier this year, for instance,ClassPass announced its entry into the corporate wellness market, a launch aimed at appealing to consumers who get health-and-wellness benefits from employers, but who might find the choices of workout facilities and programs rather limited. The corporate wellness market, according to ClassPass, is pretty fragmented indeed, so is the rest of the fitness world, Lanman said, with perhaps 90 percent of gyms and studios owned by small, independent players and mom-and-pop operations.

That works in favor of ClassPass, which seeks to offer a single place where consumers can go to get seamless access to all those places. That helps those smaller operators, too. They get more chances to win over new customers, helping those gyms and studios expand their markets, and bring in new revenue.

Theres another part of the ClassPass proposition as well ratings, which can serve to make sure class instructors are given their best effort, lest they risk their future prosperity.

MoviePass Path

Thats not to say the ClassPass journey has been seamless, however. Lanman spoke with Webster about some of the hurdles the company has had to overcome, and some misfires. Among them? In the early days, when the area of focus was basically New York, the company offered via a promotion unlimited passes for users.

We quickly learned that was not a sustainable business model, Lanman said.

Like MoviePass, Webster offered, referring to the too-good-to-be true movie subscription service that just underwent a spectacular failure.

Customers loved it, but it was bad for us, Lanman added.

Plans now range from $9 per month, for four credits to book one class, to $159 per month, for 100 credits to book up to 37 classes. The failure of the unlimited passes, in fact, led ClassPass to its current credit model. Consumers can roll over those credits (up to 10 credits a month), with demand helping to determine the cost of a particular class or workout session via a dynamic pricing system.

However, as not all workouts succeed (how many of us have paid via back strain and other ways for lifting too much or running too hard?), not all business models do. Yet, successful athletes and devotees of fitness always find ways to bounce back, and thats certainly been the case with ClassPass.

Now, Lanman said, about half of the companys customers use the service to supplement their regular gyms or studios. The company still hasnt gotten the word out about itself to all members of its target demographics, though, he told Webster, work that continues. That said, the social- and community-building that ClassPass enables via its app it all goes back to human nature is significant in helping with company growth and word-of-mouth marketing, he said. The company also offers personalized class recommendations, along with rewards for bringing friends into the service.

Fitness and health are prime concerns for countless consumers around the world, especially younger ones approaching their peak earning years. One can count on more innovation and attempts at disruption in this space well into the 2020s.

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ClassPass CEO: How Digital Platforms Have Innovated Health, Fitness - pymnts.com

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October 5th, 2019 at 9:47 am

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