In 2021, Mindbody acquired ClassPass, merging the wellness booking platform with a subscription-based fitness marketplace. At the top, CEO Fritz Lanman has been tasked with reinvigorating the boutique fitness industry through software for booking, member engagement, and more.
Now, Lanman shares how he’s doubling down on AI features to better meet the needs of its combined customers and the ever-evolving wellness consumer.
What are the biggest learnings from the first year at the helm of Mindbody?
Fritz Lanman: When I started as CEO last fall, I spent significant time with the team to understand key challenges to Mindbody’s best possible path forward. I learned this industry is underserved, and the bar for software has been too low for too long.
Our customers want a fast, stable, and reliable platform, and at the end of the day, they want new customers in their studios and to bring in more revenue.
Mindbody has many unique advantages, but in hearing what our customers wanted and needed, I realized that we weren’t telling our revenue growth story well enough. The Mindbody Marketplace, with 2.4M active consumers, offers Mindbody customers the unique ability to reach the largest global pool of wellness shoppers. And the incremental revenue they can make through it can potentially offset the cost of our product completely.
Additionally, AI is coming faster than many of us thought. When focusing on tools and findings that would be helpful for our customers, we realized how uniquely positioned we were with the largest data set in the space, so we’ve started rolling out features that will better serve our customers.
For example, Clients At-Risk, currently in beta, allows us to use our robust data scale advantages to predict when a client is losing their motivation to continue booking. Our machine learning identifies clients who have fallen off the wagon and alerts businesses to nurture these relationships.
Another feature in beta, Big Spenders, helps studios identify and retain high-value clients, with machine learning predicting each member’s lifetime spend.
Overall, this industry is constantly evolving, and I’ve learned—and doubled down on—the importance of being malleable based on customers’ technology needs and implementing clear goals that drive success for our company.
What have been the biggest successes in integrating with ClassPass? What challenges has it created?
FL: Since the acquisition of ClassPass in late 2021, we’ve been able to expand our network even further to help our Mindbody customers reach untapped audiences and supplement their existing client base. Confident in their synergy, one of our biggest wins has been launching the ClassPass Guarantee.
With this initiative, Mindbody customers can add their business to ClassPass (which is always available to them for free), and if they don’t see incremental revenue growth after three months, we will write them a check for 2x the incremental revenue lost.
Diving deeper, our data has proven businesses that use Mindbody and ClassPass simultaneously see a significant increase in revenue, notably at a materially faster rate.
While integrating two industry leaders inherently poses a unique set of challenges, we’ve seen far greater success than setbacks. October 2023 saw the most attended reservations in ClassPass history, surpassing ClassPass previous highs from January and February 2020.
How are you shaping your offering for the modern wellness consumer?
FL: At Mindbody, we recognize the definition of wellness is constantly changing, and everyone has their own unique wellness goals and needs, which we meet in many ways.
First, we have the branded experiences for those who have found their “one true love” business and want to book into that business easily, get the instructor they love, and the time they are loyal to.
Second, we have the Mindbody Marketplace for those who are in discovery mode. This is perfect for someone looking for a fitness class or salon in a new area, someone who is looking to try a new modality, or someone who is away from their home base and wants to book a wellness offering while they are traveling.
Lastly, we have ClassPass for the consumer who is looking to optimize for variety and price and is willing to have less predictable, more last-minute access.
With the largest global network of wellness offerings, together Mindbody and ClassPass have options for each type of wellness consumer where they can pick the unique models that work for them and their ever-changing lifestyle.
How do you think gyms and studios should engage with the majority of Americans who’ve never had a membership?
FL: In general, recognizing that each person has their own unique needs and approach to wellness is essential. And since the pandemic shifted attitudes to be more holistic, offering people options for what works for their lifestyle and goals is more important than ever.
This could be something like a studio that traditionally offers HIIT classes offering a handful of yoga or stretching classes for consumers to attend when they need recovery, or it could be a studio hosting community events outside of their daily schedule to encourage people to socialize and build relationships.
Connecting people to that programming, Mindbody’s integrated marketing suite helps studios attract new clients and keep them coming back with tools for each step of the customer journey – from awareness to advocacy. The software helps to increase the frequency of visits, deliver actionable feedback, win back lost customers, and generate word of mouth.
These touchpoints are essential to communicating with clients and keeping your business on their mind.
What health and fitness trends should industry operators have on their radar?
FL: We’re incredibly excited about what we’re seeing in health and fitness and the direction in which the industry is heading. Our team is eyeing a few key trends as we near 2024:
- Bigger wellness budget. We’re specifically seeing that, even in an uncertain economy, consumers are prioritizing wellness more than ever. Findings from our annual industry trend report revealed 65% of consumers are prioritizing wellness spending above all other leisure expenses.
- Rise of strength training. In findings from our mid-year pulse survey, we discovered more than 60% of consumers incorporate weight or strength training into their routine, with over half doing so two to four times per week.
- Increased transparency. In 2024, we anticipate consumers will become increasingly savvy about what they put in their bodies and whom they listen to for advice, prioritizing research and expertise. Over half of consumers make sure the beauty products they purchase are backed by research and clinical studies.
- Greater importance of community. The past few years have underscored the importance of connection in our day-to-day lives. Consumers will continue to look to fitness, beauty, and wellness businesses as a source of community. Nearly half (43%) of all consumers say that community is a very important part of wellness experiences, and industry operators should take advantage of this desire — whether it’s more teamwork activity or community events outside of the schedule.
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