Service Product Development Case Studies

New Services for Improved Sales, Differentiation, and Market Expansion

Case Study 1 - Healthy Living Training Program

Situation
Stairmaster UK had a vision of being a full equipment and service provider for the future and had recognized a need for instructor training on the correct use of fitness equipment. Additionally Stairmaster wanted to sell more equipment by providing added value to its existing fitness facility customers and influence equipment purchasers of the future.

  • Stairmaster identified a market need for training, at an instructor level, on the correct use of equipment. In the United Kingdom there was an educational gap between the training offered at National Vocational Qualifications (NVQ) / YMCA level and the attainment of American College of Sports Medicine (ACSM) certification.
  • Fitness facility customer membership retention was a key problem within the fitness industry. Stairmaster saw an opportunity to provide a differentiating added-value service that would help clubs retain their club members and encourage equipment purchasing loyalty.
  • Staff retention within the fitness industry was another key problem for fitness facility management. Stairmaster saw the introduction of instructor training, provided through fitness facility employers, as a way of motivating staff to stay with their employer – helping fitness facilities retain staff, and a way to reinforce the Stairmaster brand while, at the same time, influencing future purchasers of fitness equipment.

Solution
Creative Ideas Marketing was engaged to create Health Living Training – a new continuing education service which supported the sale of resistance and cardio vascular equipment and provided customer added value where there was a defined market need. Healthy Living Training was an instructor level education program which enhanced professionalism, and improved job-specific knowledge, skills and abilities of workers within the fitness, clinical and healthcare industry. Healthy Living Training promoted safe, effective exercise for users.

Creative Ideas Marketing worked with Stairmaster to define the market need, create the business case, develop service delivery processes and create a marketing plan that would:

  • Support Stairmaster’s core business, the sale of resistance and cardio vascular fitness equipment, by providing added value to Stairmaster’s fitness facility customers through:
    • Improved membership retention. Fitness staff trained through Healthy Living Training enabled an improved user experience to fitness facility customers
    • Improved staff retention through more motivated fitness staff
  • Provide additional service revenue
  • Influence fitness equipment purchasers of the future (support long term growth)
  • Enhance Stairmaster's position in the market and improve Stairmaster's credibility in the industry by associating Stairmaster products with the medical profession and the ACSM.
  • Support Stairmaster’s corporate commitment to education and compliment Stairmaster’s existing education offerings
  • Provide competitive advantage - offer a service where there was a market gap

Case Study 2 – Extended Warranty Service

Situation
Nautilus, one of the United Kingdom’s premier fitness equipment suppliers, was already offering extended warranty and contracted maintenance services but felt it was time to refresh both of its service product offerings. Nautilus sales personnel were not actively selling services, and customer uptake was low. Nautilus saw an opportunity to improve its service’s revenue and engaged Creative Ideas Marketing to step in and revitalize its equipment services.

Creative Ideas Marketing’s first steps were to conduct an internal discovery exercise with Nautilus service operations and sales personnel, followed with a series of face to face customer interviews to get to the heart of the problems. Internal workshops revealed that sales did not fully understand Nautilus’ services – literature was outdated along with pricing and there was no easy mechanism for selling services at the point of equipment sale; service delivery process were inconsistent and only ad-hoc processes were in place for tracking expiration of product factory warranties.

  • Customer interviews revealed a unanimous and strongly voiced opinion that fitness equipment manufacturers were being unfair and should warranty products for the life of the equipment.
  • Fitness equipment manufactures felt frustrated because equipment installed in fitness facilities and gyms was rarely cleaned, lubricated or serviced. Lack of routine maintenance meant frequent break-downs and costly repairs for equipment manufactures while products were still under factory warranty.

Creative Ideas Marketing took this dichotomy and turned it into a two-way-winning opportunity.

Solution
Creative Ideas Marketing outlined a unique and creative solution to address underpinning customer objections to purchasing; made it easier for sales to sell; and provided an updated set of services with a new service component, which accommodated diverse customer support requirements. Creative Ideas Marketing worked with Nautilus management and staff to develop Nautilus’ Extended Warranty Service Package with the goals of:

  • Influencing / encouraging customers toward self maintenance – “Let’s get to the point where customers never call us out” was the aim articulated by Managing Director, Andrew Dick
AND
  • Controlling customers process of engagement with Nautilus – communicate with customers at the right time, and provide customers with the tools, process and financial incentives for customers to proactively manage their equipment cleaning, maintenance and up-time.

Nautilus’s existing service contract and extended warranty services were revamped, updated and re-priced, and an additional third element, Preventive Maintenance added to the service suite. This new service combination enabled Nautilus to offer a unique proposition to its customers – a 100% money back guarantee on extended warranty servicing – a unique service differentiator in a tough competitive market.

 

 

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Creative Ideas Marketing LLC, updated Nov 2016