easyGym: (another) stretch too far?

Sir Stelios is, literally, stretching his brand muscles again with news of him opening easyGym, a low cost, no frills fitness club. Membership is only £11.99-£13.99 a month, after paying a £25 joining fee. And you can pay monthly.

Now, when talking about Stelios I always start by saying the guy has more balls and more money that I or most of you reading will ever have. With easyJet he created real innovation in the airline industry, like his role model and fellow knight, Richard Branson.

But like Branson, most of his attempts to stretch his brand have been flops. There was one easyCinema, now closed. easyPizza failed to make a crust (sorry). easyInternet cafe has gone. As has the easyMoney shopping comparison site. You get the idea.

Will easyGym break this pattern and be a success? Let's have a look by reviewing easyGym against the success model that helped easyJet achieve success. 

1. Game-changing pricing

easyJet used "dynamic pricing" to offer dramatically lower fares for people booking early. easyGym's monthly fee of c£14 is pretty damn good. Virgin Gym is c.£60-70 a month. My local gym is £50 a month.

easyGym make a big deal of offering a monthly payment option, with no need to sign up for a year like a lot of gyms. However, my local Kinetica gym offers a pay as you go option of £7 a pop. So if you only went a couple of times a month, this would be the same price.

However, what is missing from easyGym is any dynamic pricing. Could there have been lower prices during less busy hours or times of the year to help increase gym utilisation for example?

easyGym score: 7/10

2. Remove frills and "out-source" to the consumer.

easyJet removed free peanuts and drinks, and forced you to fight for your seat, not have one reserved. Even more clever was "outsourcing" to the consumer: getting us to do stuff, like print your boarding pass at home. This allowed lower costs and so lower prices.

easyGym has cut stuff out. There are "minimal" showers. No pool or sauna. And you have to pay £1 for a towell. With these cuts, easyGym is out-sourcing showering to the consumer so they do this at home. But it feels like it may have cut not just frills, but things people really like in a gym?

easyGym score: 5/10

3. Clever cashflow

easyJey got people to book early, and so got their cash early and were able to make some interest on this. I'm not sure easyGym's model of allowing people to pay month by month makes as much sense.

Gyms make a lot of money from people paying for a year's worth of fees (probably in January) and then not going. Indeed, accountants crunch.co.uk calculated that Britons waste £37 million each year on un-used memberships.

So, easyGym is solving a consumer issue, which is good. But in doing so, will their business model be less profitable?

easyGym score: 5/10

4. Stelios' "skin in the game"

I suggest the key reason for easyJet being the one real success in the easyGroup is Sir Stelios being actively involved and having been a major shareholder.

easyGym, like many of the other easyGroup dwarf extensions, is a licensing deal. Fore Fitness are paying Stelios to use the brand. But he has no "skin in the game" i.e. no investment. If it works, great. If not, never mind, move on to the next brand deal.

easyGym score: 1/10

TOTAL score: 18/40, or less than 50%

Net, I would bet on easyGym being a miss. There are 2 of them now. I reckon there will be less than 20 of them in a year's time.

What do you think?

 

 

Comments

[Nado]

That's right that's why we've booked our next two month's traevl almost exclusively on train and bus networks. Only one flight (and 5 countries + traevl within them) and that to accommodate family members' timetables.

[Sangjin]

Totally agree since discovering the National EXpress site (note NO fee for crdiet cards, free postage of tickets) I have no only abandoned qjump, I have taken several London journeys by train when I would usually fly. OK Inverness to London means an 8 hour train journey, instead of a 1.5 hour flight, but with free wireless in the National Express trains, its actually do-able. But ultimately, it was the website that swung it for me.The only slight niggle is a few times I have typed in the url and wound up on the coach site, with no way to find the train site. Aside from that, great job and qjump and flybe, look and learn

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[Ben]

Another reason I don't think it will work is if you look at your 8 P's article and apply the promise and personality principles. Stelios does not convey this as the face of the business. To use your innocent case study example the founders really believed in there product, does Stelios REALLY believe in going to the gym? Doesnt look like it!

[Leonid Savkov]

Thanks for the post.

I agree with the conclusion, however I think that the analysis was a bit soft.

I completely agree on the importance of the first 2 points, partly disagree with the importance of the third point (if you have enough of cash you don't have to play with this part) and completely disagree on the fourth (I am sure the business can be successful even if one particular guy is not in it - the key question is there some other clever guy behind).

I was also lacking one other important point - IS it user-friendly (location and other, atmosphere etc).

But in general a very interesting but brief and to the point reading as usual. Thanks!

[Howard Pull]

Pricing will put this way ahead but a lot about a gym is atmosphere and the frills / equipment. It could lose the perception/brand experience battle but at £13.99 a month when the standard London gym will charge £50-60+ I'm sure it'll find some fans.

If it gets the perception right and provides a good but basic experience (rather than seen as just cheap and nasty) it could do well. Go Stelios

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