Creating a US$1m revenue digital business – and growing
“Don’t think about your digital strategy for today. Think about it for tomorrow, and for next year. Technology moves at a rapid pace, so if you aren’t already planning for the future, you’ll always be left behind and trying to catch up.”
This just one excellent piece of advice from Nad Myan, director of growth and innovation for Evolution Wellness, as he speaks to Wexer CEO Paul Bowman in the first ever episode of the Wexer Podcast.
You can listen to the full podcast here.
The background
Evolution Wellness – which operates over 170 physical locations across six brands in south-east Asia – has an over-arching digital vision to develop an inclusive, best-in-class ecosystem that affordably meets the needs of the broadest possible customer base.
A key part of this is Virtual Studio, a full digital gym offering created in partnership with Wexer that offers a blend of live classes, on-demand content from Evolution’s various brands and the extensive third-party content libraries provided and managed by Wexer.
And it’s a huge success: a US$1m revenue business for Evolution Wellness already, with plenty of scope for more growth.
Says Myan: “Let’s not overstate it: the digital solution is not going to replace the revenue that’s generated through the operation of the bricks and mortar business. However, it must be a key component of the exercise proposition. A member is unlikely to use it every day, but it has to be there. Without digital, Evolution Wellness would be stuck.”
Advice from the experts
If you’re an operator looking to create a sustainable, profitable digital offering, there’s much to be learned from the story of Evolution Wellness. Some of the key learnings from this honest, informative podcast include:
The importance of a clear ‘why’
“Evolution Wellness knew why they were doing digital. They knew their desired outcome and they designed an entire service to deliver it,” observes Sam Aldred, head of APAC for Wexer, in the concluding section of the podcast. “That’s the most important piece of advice I could give anyone.”
The vital need for ownership
“It’s really important to have someone driving your digital ventures, someone who’s responsible for it in each market,” stresses Myan. “It isn’t going to thrive if you just leave it on its own. It has to be nurtured and developed further. It has to be a constant play.”
The value of in-house talent…
“We’re in the business of creating communities in the gyms: that’s how we get retention and referrals and how our numbers grow,” says Myan. “So, it’s important that the faces our members see in our digital content are the ones they see in the gym.”
“Evolution’s own stars drive engagement: 20 per cent of the content is self-produced, but it accounts for up 60 per cent of the digital views,” confirms Aldred. “Your talent is the best way to cut through to your members.”
… and of third-party content
“Evolution Wellness uses the large volume of third-party content on the platform as an acquisition tool,” observes Bowman, with Aldred agreeing: “Catalogue is hugely valuable when you’re trying to demonstrate value to acquire a member. Take Spotify as an example. Even though we’ll only listen to a couple of thousand of them, the value we see when we sign up are the millions of tracks on offer.”
The way to retain top talent
“We’re going to be creating a commission structure to reward our in-house talent for the consumption of their content, which will create superstars within the organisation,” says Myan.
The huge revenue potential
“Digital isn’t just another cost you have to place on your business,” says Aldred. “It’s a profit centre.
“For Evolution Wellness, it’s a US$1m revenue business already, and I’d expect them to attach 20–30 per cent of their members in the next 12 months alone. The opportunity is the same if you’re a one- or two-club operation. If you can attach 30 per cent of 3,000 members to a US$4.99 a month digital tier, you’re making money.”
Don’t miss this hugely informative podcast – listen now here – and stay tuned for more episodes and more chats with digital leaders, coming soon!