Question

Here's the situation: Ajax Gyms was suffering from a slow-down in new members. Typically, they had about 1,000 new members per month, which helped alleviate the 800 members who churned on a monthly basis. But when new memberships (acquisitions) slowed to about 500 per month, and churn stayed steady at 800 per month, they suffered "negative growth" (aka decline). The marketing team of Ajax Gyms sprang into action and decided to do a price promotion. While gym membership typically cost $49.99 per month for the month of July they offered memberships for $29.99. It was price promotion so that low price required that: a) new customers had to join in the month of July; b) those new customers were locked into that price for 6 months, after which the price would return to the regular price of $49.99. The promotion works great! 8,000 new customers sign up at $29.99 in July. The numbers for the rest of the year look great, and the marketing department gets their end of year bonuses. Then January hits and 6,400 of those new customers churn. The entire marketing department is fired, and YOU are brought in to straighten things out You have a meeting with the CEO of Ajax Gyms tomorrow morning. What are three ACTION steps you are going to recommend to fix the problems at Ajax Gyms? Provide a short description and rationale for each of your recommended Actions. ALSO, please look through other students posts and identify ONE idea that you think is strong, and let that fellow student know why you like their idea.

Answer 1

1. First idea is to identify the root cause of the customers leaving the gym. This includes understanding the competition in the neighborhood and the type of competition i.e. is it due to quality of service or , price factor, or any other reason.

2. Taking customer feedback. This would help you gain an insight on the situation. The customers can highlight the gym's shortcomings and pave way to improvements. Identifying quality problems, prioritizing them and resolving them in a step-wise manner.

3. Then, planning and implementing a promotional campaign to re-brand the gym and present it as a new facilitator of the service. While, highlighting the improved services.