Loyalty Strategy

Product-Level Loyalty in Home Fitness is a Cost/Benefit Trade-off

Focused on fitness? If so, the mere sight of your living room walls might be enough to break you into a cold sweat these days. For many, traditional gym experiences are off the table. And with so many still stuck at home, finding healthier and more productive pastimes than constant snacking, Netflix binge-watching, and general laissez-fairing has become a top priority. The new year is already a month behind us, resolutions are still fresh, and marketers are motivated to embrace the confluence of trends, behaviors, and audience passions supporting the changing fitness industry. And there is one industry aspect in particular that has both marketers and loyalty practitioners talking: product-level loyalty.

Pennies for pounds

Product-level loyalty — the marketing facet that has taken the home fitness vertical by storm. This trend seeks to enrich the products themselves with loyalty features, such as ongoing memberships perks, rewards opportunities, and collaborative networking with other members. Sometimes, these benefits are included in the original cost of purchase for the product, or come with limited-time free trials. But more often than not, the full functionality and benefits transferred by these products — including internet-facilitated shared realities with other individuals or enhanced metrics like tracking and logging — cannot be realized without enrollment into these levels.

It’s an intriguing strategy with various competing implications. On one hand, marketers must recognize that further costs or actions required on top of the initial purchase might deter purchase overall. On the other hand, these programs create feeling of exclusivity — a motivator for many in the first place. And the incremental costs are usually much smaller than the original purchase in the short term, adding to the “sunk cost” illusion while persuading buyers to make one more final decision. Finally, because these products usually run at a premium to cater to more affluent market segments, additional costs to access certain features are embraced rather than questioned.

The product-level loyalty model is cropping up all throughout the industry, with key players and household brand names eagerly stepping into the action.

Examples of Product-Level Loyalty Models

Peloton

Peloton provides additional membership levels for customers wanting make full use of the brand’s industry shaking fitness machines. The lowest available tier is the Peloton Digital Membership, enabling use of the Peloton App to access classes and training on digital devices. However, if you want to fully integrate with Peloton hardware, you’ll need the pricier All-Access Membership, which activates in-class metrics, a leaderboard to interact with other members, and post-workout goals with metrics analysis. Members are also able to access tangible rewards such as badges for milestone achievements, and a Century Club t-shirt.

Lululemon Mirror

When Lululemon acquired mirror, it was heralded as one of the finest examples of contemporary omni-channel marketing. To take the unique augmented reality fitness experience deeper into the brand’s marketing strategy, a monthly membership of $39 is necessary for customers looking to access different types of video workouts led by individual trainers overlaid on the dynamic digital screen. On top of the already $1,500 initial price tag of the hardware, there is concern that this significant added membership cost is a step too far and might actually dissuade widespread adoption therefore taxing the overall product loyalty.

NordicTrack & iFit

NordicTrack is a premium manufacturer and brand of personal fitness machines, such as treadmills and ellipticals. To propel and personalize these products, NordicTrack partners with iFit — a personalized training and coaching subscription — to power the brand’s fitness programs. The technology integrates with NordicTrack hardware to provide “SmartFitness” to home training routines. And unless customers are satisfied with keeping their machine set to “manual” mode, these subscriptions are required. In order to entice customers to stay the course and keep their membership renewed, a free 1-year subscription arrives alongside the initial product purchase with hopes to retain customer loyalty in the future.

We will be watching to see how these brands stay the course and continue to innovate as traditional gyms, spin classes, and other public fitness venues become an available and competing option once again. Product-level loyalty strategies are becoming more commonplace with big brand names which should be a hint at what marketers should be focused on next.

Product-Level Loyalty in Home Fitness is a Cost/Benefit Trade-off
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