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Square Peg, Round Hole: Keeping Product, Price, and Customer in Sync

Product, price and customer have to be in sync for your wellness business to work. These five real-life examples show you what happens when they’re not aligned.

Example 1

Company A offers weight loss programs.

Their programs cost about $1500 for three months of nutritional supplements and human-growth-factor (HGH) injections.

They have literally signed up only four clients in four months.

Why?

Price. HGH injections were readily available for $200 from clinics within a couple of blocks.

Product. There was no discernible difference – tangible OR intangible – between what they offered and what others offered, except the supplements, which were nothing special.

Customer. They were located in a fairly small, high-unemployment, low household-income community. People could find money for mobile phones, but a $1500 product was simply out of their reach and few people qualified for CareCredit or wanted to use it for this purpose.

Example 2

Company B is a medical clinic that offers a tiered array (Level 1, Level 2, Level 3…) of retail healthy lifestyle programs, all with a strongly medical focus.

The programs are compliance-based. Participants are supposed to keep detailed food and physical activity logs. These logs are critiqued in detail by an RN and an RD. Weekly nurse and monthly doctor “accountability appointments” are intended to keep participants on track.

They priced Level 1 below their cost to encourage participation, with the expectation that a fairly large percentage of folks would then sign up for Level 2 at a higher price.

But their “graduation” – retention – rate from Level 1 to Level 2 is abysmal.

What’s going on?

Product. Participants hate their program. They feel micromanaged and judged by people who don’t actually understand their daily challenges and who blame lack of progress on lack of motivation and self-discipline.

Example 3

Company C is a large health club with multiple locations.

They’re moderately priced and focused on growing through program revenues rather than membership increases. They have a staff of well-trained and enthusiastic personal trainers, but only two of the trainers are ever fully booked.

The mismatch?

Primarily, Customer. These guys have a serious gap between their expertise and interest and their actual customer. Most of the trainers are focused on either bodybuilding or fairly extreme sports – Tough Mudders, Ironman competitions and the like. But their actual customers are sedentary men and women in their 40s and 50s. And guess what? The two busiest trainers have tons of experience in working with inactive clients and clients with health issues. Coincidence? You be the judge.

This is a classic “customers are from Mars, trainers are from Venus” scenario.

They’ll also need a new product – i.e.., different trainers – or different customers – to succeed.

Do I think they can train the current staff so that it’s better aligned with their actual customers? Not really. It’s far better to start with people who have a true affinity for your customer base.

Example 4

Company D is a women-only fitness center.

They’re in an area that has become quite affluent over the past five years and they’re surrounded by successful fitness businesses – an upscale big-name health club, a couple of CrossFit boxes, yoga and Pilates studios galore, spinning studios, personal training gyms, HIIT fitness boutiques and lots more.

They have a nice line-up of classes and great instructors – and yet they’re on the ropes. Many of their classes have only 3 or 4 customers and it’s not unusual for a class to be canceled when no one at all shows.

What’s wrong?

Price. You have to buy a 12-month membership. They don’t offer a monthly membership. No class cards, either. They do have drop-in pricing, but it’s prohibitive and intended to push customers to annual memberships as quickly as possible.

That’s how they’ve always done it. But literally NONE of the other fitness businesses are doing it that way! So they stick out like a sore thumb.

Sure, this was a common practice 15 or 20 years ago – but very few customers will accept that level of risk today. Why should they? They’ve got lots of other choices.

Example 5

Company E offers dental and spa services.

Patients rave about their dental practice but their spa services just haven’t taken off. They’ve tried all kinds of promotions and advertising, direct mail, Facebook, AdWords – you name it.

What’s up?

Product AND customer. Their dental patients don’t want to buy spa services from their dentist. In fact, they think it’s kinda sketchy – not what they expected from someone they saw as a trusted medical professional. Plus, folks who only want spa services think it’s stressful and kinda strange to visit a dentist’s office to get a massage or facial or skin procedure.

There’s no good fix for this one. Sometimes, you make lousy decisions and the best thing to do is cut your losses.

If they can easily establish a separate entrance and are willing to invest in a completely different brand for the spa services, this may be salvageable.

Otherwise, their best bet is probably to drop the spa services altogether and grow by adding new dentistry-related services.

Another option would be to rebrand around cosmetic dentistry and narrow their service offerings accordingly, if the competitive environment makes sense.