Like many small business owners, Ruth Grant has been forced to rapidly change her business model amid COVID-19. The Pole Gym Brisbane City, in Australia has been providing in-studio fitness classes for over ten years and had more than 250 active members this term. To survive when gyms and indoor sporting venues have been forced to close by the government, Ruth had to digitally transform her business in 48hrs.
Most people associate a digital transformation with an enterprise scale change of process and people, but it can happen at any scale. According to George Westerman, a principal research scientist from MIT, digital transformation is the rethinking of how an organisation uses technology, people and processes to fundamentally change business performance.
Situation
Ruth adopted increased hygiene measures and social distancing requirements on the 18 March 2020; The Pole Gym limited access to the facility and made changes to class content to reduce social contact. Four days later, the Australian Prime Minister announced that from 12 noon the next day, gyms, entertainment venues and pubs must close. Ruth succeeded in pivoting her business to solely online the next day.
After holding their first ever company-wide Skype team meeting, Ruth and her 19 staff identified that a move to online presented a challenge to develop and tailor content, but also an opportunity for growth with the potential of a global customer base. Ruth and the management team also identified that transforming could encourage former customers to return to the community, as well as provide access for prospective ‘shy’ customers who did not have the confidence to attend the physical studio.
A wide-range of classes were modified for online.
Analysis
The fork in Ruth’s strategy path was to provide either pre-recorded content as a subscription service, or to provide real-time interactive classes. There already is high-quality pre-recorded content available online and competing in that space would have required significant time and resource investment to develop a competitive offering. The optimal value proposition that Ruth’s business offers is personal interaction with expert instructors. These classes could be launched relatively quickly and would be the type of interaction that customers had wanted from the studio, and a delivery style familiar to instructors. The classes are also capped in customer numbers to maintain a personable level of interaction.
The assumption that a pole fitness studio was heavily dependent on poles was a myth. Pole fitness classes at the studio were only a portion of the classes offered, with many classes comprising dance, flexibility or general fitness content that is easily modified for online. Many of the current pole-based classes could also be adapted, with substitute equipment being used. An example is the most popular class ‘Dirty Dance’, which could be adapted with floor and chair work, which all customers have in their home. “Our mantra has always been: ‘fun, dance, fitness’ and that’s what we’re continuing to embody in our online class offerings," Ruth says.
Interactive classes still offer a personal experience and have capped student numbers.
Adoption
The adoption strategy was to launch a free trial to enable Ruth to test her online offering before accepting payment from new and existing customers. This gave her the opportunity to introduce a feedback loop to continuously improve the offering. The feedback came directly from customers at the end of classes which was done in the studio too, but also social media channels were opened up to capture wider feedback from members. The most important feedback received initially was that members still wished for the classes to be held outside of normal business hours.
The Pole Gym Social Club is as important as the interactive lessons.
Social
To maintain the social aspect of the studio, which Ruth says is as important as the classes, The Pole Gym launched it’s Social(ly Distanced) Club, comprising a series of scheduled online meetups including a virtual cocktail party, online sewing circle and even pet playdates. Ruth recognises it is a unique selling point and critical in keeping the customer base together, but also important in caring for people’s mental well-being. Ruth said “I remember how overwhelmed I was when I realised the impact that the pandemic would have on our business and lives generally, and I knew I wasn’t the only one who would be feeling like that. I wanted to be sure we had a way for people to stay connected and feel part of a community even if they weren’t interested in, or couldn’t afford, the online class offering.”
Pricing
Ruth recognises her offering has changed and that a compensatory reduction in pricing should happen. This is to reflect the change in the product offering, but also Ruth recognises that many people at this time have been heavily impacted financially. This impact is also being felt by the instructors who have had their working hours cut. The studio went from full operating capacity to a decline in customers.
People
The disruption to operations has impacted staff with teaching hours significantly reduced and in some cases ceased entirely. The staff have been encouraged to do what many people who have been stood-down are now doing; using innovation to identify product development and revenue streams. For performance-based services, updating the repertoire of choreography and routines is the equivalent of product development.
Technology
As with many businesses and people that are trying to remain socially distant but relationship connected, Ruth has been leveraging Zoom as the delivery mechanism for classes. It was identified as the strongest offering for interaction and allowed the instructors to provide a soundtrack to the class. Prior to late 2019, the business’ client management system did not extend beyond a website which was capable of making an online payment for introductory classes. In November 2019, a Customer Relationship Management (CRM) tool was selected and is now providing basic scheduling for classes and customer contact details. The COVID-19 has accelerated the rate of change to the business, which is being met with complementary development work by her CRM provider. The CRM was selected as it was capable of handling a business which functioned like a fitness provider but scheduled like a dance studio (six-week schedule rather than annual for gyms).
Ruth Grant owner and manager of The Pole Gym Brisbane City
What next?
The Pole Gym has just completed the transformation so it is too early to forecast adoption rates. However, based on customer-feedback it looks like the support for an online offering is there until the physical studio re-opens. As for maintaining a possible global customer base, live interactive classes are trickier to schedule for a global market and an Australian supplier, so pre-recorded content might be a future offering or even a collaboration with another pole studio in a different time zone. Ruth said “we’re happy with the response our online offering has received so far and we’re keen to keep refining it to offer the best possible experience to our students. It goes without saying that we would prefer that our physical studio wasn’t closed – but we’re making the best of a bad situation and we’re genuinely excited to see what new possibilities can come out of this digital disruption”.
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