Vindicia in the News

Subscription fitness is sweating it out as exercise fans return to in-person studios and online workouts wane, necessitating innovation.

During a PYMNTS On the Agenda discussion, Simone De La Rue, founder and CEO of Body By Simone (BBS), and Trace Galloway, chief strategy officer at Vindicia, discussed how flexibility is as crucial to fitness subscriptions now as it is to workouts.

Body By Simone’s famed LA studio found itself surrounded by competitors when COVID arrived. “The last couple of years have been insane,” De La Rue said. “We’ve discovered there’s an oversaturation of online fitness. In 2018, when I first launched my app there was only a handful of people doing this. COVID hit, and everyone all of a sudden had a fitness app.”

As physical retail saw a stunning recovery, so too is physical fitness, as she said people are tiring of Zoom and app-based fitness and are now flocking back to live studios for the group energy.

“The experiences of Vindicia’s clients in the health and wellness space are very consistent with what Simone just described,” Galloway said, noting that Vindicia attracted a chunk of subscription fitness startups in 2020 and 2021.

Acknowledging Peloton’s problems as indicative of shifting trends, however, both said fitness subscribers are looking for a change, and that includes subscription terms and policies.

“I’m trying to find the marriage of both to keep the retention,” De La Rue said, as BBS seeks ways to bridge the gap and keep its subscribers engaged.

Galloway agreed, saying, “To Simone’s point, it’s the flexibility of that subscription and the elasticity of it. If I have an online subscription, does that translate into my ability to now go visit one of the studios and do a physical in-house? We’re seeing this more and more with clients today, the concept of bundling and morphing the offering.”

Getting Payments In Shape

As to best practices that subscription fitness businesses should be considering now as they pivot from customer acquisition to retention, it’s a story of fundamentals.

Galloway noted that vaulted payment credentials and flexibility of payment choice are critical to both acquisition and retention, but as things lean more toward retention the idea of failed payments causing involuntary churn is an area all providers must be aware of.

“You want to make sure that you’ve kind of optimized the way in which billing is happening,” he said. “Are you leveraging services out there like account updater and others to make sure that you’ve got fresh card information and current card information on file?”

He pointed to high credit card fail rates over time and the importance of how retries are done, as well as messaging and subscriber communications that platforms like Vindicia are built for.

De La Rue is keeping an eye out for deal-chasers versus long-term prospects in her subscriptions as the start of the year is flooded with free trials in fitness. “Sign up for a month and get it for $1 or sign up and you get 50% off for the year. It’s just in your face constantly,” she said.

“What I’ve found when we have done that is the type of client that you’re attracting is not going to be your loyal client. It’s the client looking for the deal.”

She’s combatting that with fresh content to turn new year’s resolution makers into longer-term subscribers. It’s also about leveraging the power of her large online following to imbue a sense of belonging.

“You could get any free app and someone’s going to give you a bicep curl,” she said. “It is about creating that community and trying and get them to stay.”

Galloway added that “it’s not necessarily a payment-related failure that’s going to cause that person to leave, it’s the fact that they want the next deal. In the involuntary churn world, what we’re doing is making sure that that person at least stays for as long as they possibly can, and it is a lot easier to keep a subscriber” than to acquire a new one.

Bundling, BNPL and a Mid-Year Shift

Galloway sees churn in fitness subscriptions as more of a mid-year problem in 2023, saying, “If you give customers the opportunity … to evaluate — we call it the mini-ROI model — ‘do I really need this anymore? I’ve accomplished my goals or whatever,’ they may, in fact, leave,” whereas a seamless billing experience alone can reduce that coin-toss decision making.

As an Amdocs company, Vindicia has access to some of the best subscription bundling minds around, like those that came up with marrying T-Mobile and Netflix. He added, “organizations are also saying, rather than lose this subscriber, why don’t we allow them to pause this for a little while and bring it back? I think you’ll start to see this more and more.”

Buy now, pay later (BNPL) entered the conversation as well. Body By Simone isn’t offering that option at this point, but Galloway said it’s a model for some. “You, as a business owner, benefit from getting the full amount upfront, and the BNPL provider is then going to put [the subscriber] on a payment plan that he's going to satisfy over whatever the defined term is,” he said.

De La Rue summed it up thusly: “What people are wanting now is to have control, for me personally in health and wellness and the workouts, over their subscription. They want to be able to customize, they want to be able to do what they want, on the moment, on the day, depending on time, and depending on energy levels.”