Dec 02 2019

How Orangetheory Crushed The Boutique Fitness Game

Take a SoulCycle studio, then scrap the bikes and candles and sub in some dimmed down neon orange lights. Welcome: you have entered an Orangetheory class!

 

In the 1980s and 90s, franchising was a growth engine for traditional gyms and health clubs. These businesses sold tons of yearly memberships, much over the limited capacity allowed. More recently, as you’ve seen in the earlier posts in this series, the boutique fitness studio has become the gym du jour. These facilities are usually in smaller spaces, and focus on group exercise that puts emphasis on one or two specific fitness areas. We know SoulCycle’s got the pedaling scene covered; for the sneaker set, though, it’s all about Orangetheory.

 

Much like SoulCycle, Orangetheory presents a strong, boutique brand (and comes with a price tag to match). It sells its members on shorter, more specific auto-renewing commitments, giving customers the option to pick and choose between studios and classes to truly customize their experiences. 

 

 

Chief Branding Officer of Orangetheory Kevin Keith made it his goal to make people feel something new about the company’s brand, differentiating them from other fitness brands. He focused on engendering excitement in self-empowerment and hope and, on the tech side, developing a loyalty program that uses predictive data captured by the heart rate monitors users wear to engage and retain members. These monitors track members’ anaerobic thresholds, i.e.,  the “orange zone.” The goal is to spend 12 minutes or more in this zone, and the big screens on the wall show what color zone each person is in throughout his/her workout to motivate each participant to get into that coveted orange zone. 

 

Why is Orangetheory one of the top competitors in this business? It’s all about the bottom line, and these franchises deliver results for studio owners. Although the initial licensing fee is significant (about $200,000) the results are basically guaranteed. Franchisees receive detailed digital marketing and social guides to get people in the door, and also stand to benefit from (or get burned by) guerilla brand marketing, like what Orangetheory tried years ago:

 

 

Placing orange spray-painted bikes at multiple high-visibility locations around major cities DID create a social media buzz… but Orangetheory caught backlash, and complaints went to gym-owners from people who thought the ploy’s installations resembled “ghost bikes.” “Ghost bikes” are placed in spots where cyclists have been killed in traffic crashes, which is definitely NOT the type of connection Orangetheory was looking to make. 

 

Boutique fitness exploded because they provide an effective workout experience in a group setting, and motivate members to get excited for their workouts. These franchising businesses take off because of the technology and best practices that are shared among locations and the “mothership” brand, delivering success to studio owners who would otherwise be struggling to sustain a business in a cutthroat market. We foresee this fitness trend to keep momentum high riding into the new year.

 

What do you think about these burgeoning fitness trends? Do you have an idea for the next big thing? Let us help you start your business strategy today. 

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