Posted by Trey Nordone on June 26, 2018
The Theory Behind The Orange
Even over the phone, Paul Reuter’s energy is contagious. The Senior VP has the sort of upbeat attitude and enthusiasm one would expect to find in the exercise sector of the Health and Wellness world, but the methodology he preaches at Orangetheory Fitness is anything but conventional. What sets them apart in the seemingly saturated world of the fitness franchise song and dance? For Orangetheory, that dance will soon be to the tune of $1 billion.
That’s right. With a “b.” The rapidly growing frontrunner of fitness is poised to hit $1 billion in revenue and well over 1,000 locations in 2018. All this in only 10 years since its conception. With this explosive growth rate and exciting new agreements to start developing studios in the UK, Orangetheory earned the #1 spot on Franchise Time’s Fast & Serious list in 2017. So, what sort of regimen does it take to see these impressive gains? Reuter recognizes that, in an industry driven by memberships, customer feedback is key.
Orangetheory’s goal is very clear. “To deliver proven fitness results for a healthier world, that’s our mission,” Reuter says, “and we can’t do that if we don’t listen to the voice of our consumer.” He is a firm believer that happy customers and positive word of mouth lead to healthy, sustainable growth – the kind of growth Orangetheory has enjoyed over the past several years. It takes much more than just a nice sentiment and a verbal commitment to ensure customer satisfaction, though.
Meticulously monitored metrics, rigorous service standards, and a great deal of accountability have been implemented over the years to ensure Orangetheory’s customers continue to sing its praises en masse. The name of the game, Reuter says, is “customer-centric feedback that’s not only archived, but also aggregate in nature.” They seem to have a finely tuned customer feedback engine humming smoothly now, but installing one is a daunting task, and it certainly did not start out this way.
Reuter admits that obtaining and utilizing customer feedback was a struggle at first. “On little notecards in the studio,” he laughs when asked about the beginning, “but when you’re starting new companies, you don’t have, in certain cases, the budgets for a lot of the best in class platforms.” Not only were customer surveys difficult to collect and catalog, but the data was often unreliable as gym-goers were sometimes prompted by employees to give higher ratings. Reuter and others quickly recognized the problem and sought out a tool to help actualize their ideal picture of customer feedback.
Enter Listen360, a Net Promoter Score (NPS) based customer engagement platform. The software offers intuitive ways to gather customer reviews, quickly close the loop with negative feedback, and monitor customer experience across multiple locations. It seemed a perfect fit to Reuter.
“It’s more customer-centric and easier to use,” he says, “so, we’ve been a pretty big fan of the product.” By categorizing customers into groups of those who promote the brand, those who are passive, and those who detract, Orangetheory can use Listen360 to score themselves by region or even location on overall customer experience. Those numbers tend to indicate astonishingly well which locations are excelling financially and which are not. “There is an absolute direct correlation with what we do to our members, “ Reuter affirms. When a particular market or location is not performing well, it is often because customer service and feedback standards are not being met. Listen360 essentially provides a finger on the pulse of performance, profitability, and sustainable growth, all through customer engagement.
Orangetheory is so serious about tracking and maintaining the relationships it has with its customers that Listen360 has become an integral part of the brand culture. “It is a performance metric we tie to compensation,” Reuter says with conviction. He knows all too well that an invaluable tool like this platform becomes nothing more than a widget if it is not used with dedication and accountability.
Reuter sees clearly why Orangetheory and Listen360 work so well together: they are all about doing the right thing. As he pointed out earlier, many companies look to cut costs in the pursuit of growth, and customer feedback often lands on the chopping block. In the pursuit of quotas and the ever-important bottom line, some decision makers lose sight of a brand’s duty to promote relationships and end up extracting value from customers rather than creating it with them.
While a dollar from a brand detractor is just as green as one from a promoter, that dollar will go a lot further to poison a brand’s reputation and dissuade potential new customers than a financial report will ever reveal. Inversely, brand promoters are not only free advertising, but are more likely to make multiple purchases and less likely to be affected by higher prices. Investing in a process to measure and improve customer satisfaction is not only righteous; it makes great business sense. Orangetheory’s success only goes to show that it pays off. Reuter sums it up wonderfully: “The ends are all the revenues and all the things that you get as a result of doing the right thing.”