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?