Lymber: Scroll, Select, Sweat – Introducing dynamic pricing in the fitness industry

March 6, 2017 carlaoz Leave a comment

The competition in the fitness industry is fierce (!): Studios need to keep customers coming in order to remain profitable and use their resources (staff, space…) efficiently. For customers, gym memberships are an investment, yet, it seems there is always something wrong: either contracts are too long/inflexible, the classes are not interesting… the list is endless! But maybe there is a solution…

Let’s check out Lymber!

Lymber is a San Diego-based startup launched in 2016 with the goal to make people exercise more often by providing them with “as they go” fitness offers (Lymber Fitness Inc, 2016). The Lymber app aggregates open class spots from currently about 180 (local) partnering gyms and offers them to interested customers. Lymber’s dynamic algorithm calculates the rates under consideration of factors such as instructor popularity and time/day of week; whether a rate will “surge” or drop as the class moves closer is a matter of supply and demand. Sounds familiar right? it is the same principle followed by hotels or transport providers such as Uber!

How does it work in practice?

Lymber_HowItWorks — Figure 1 – How it works

Efficiency Criteria: Weighing Cost And Benefits

As you can see from figure 1, time and effort to use Lymber is very low for all participants. What about cost? Lymber does not charge a subscription fee from customers. It only makes money if its partnering gyms make money using their system (~25% commission fee), therefore it encourages repeat visits to your gym (Lymber Fitness Inc, 2016).

Customers pay for what they “use” only. In this way, they can explore multiple sports (yoga to spearfishing, now that is variety!) and different studios without extended commitment. Whether you are a bargain hunter or are looking to score a spot in the most popular class around town: this app opens up a whole new world of choice and flexibility! Through booking, customers co-create value by implicitly providing participating studios with demand and service valuation information they can use revise their service and pricing strategy in the future (Bertini & Koenigsberg, 2014) (Saarijärvi et al. 2013).

Studios maximize revenue without having to insanely discount their services and use their capacities efficiently by filling up empty spaces. Drawing on historical and real-time data, Lymber’s algorithm will propose the best prices to studios without taking away their control (remember the price floor and ceiling). At the same time, studios can attract new customers; potentially even some who end up joining long-term. Finally, don’t forget the importance of impressions on crowd dynamics: having more people in the gym implies popularity which can entice others to give it a try as well.

A critical forecast: What does the future hold for Lymber?

Naturally, the founders’ main goals are to attract more partners and more customers. But will it work? I believe Lymber is a very interesting approach for studios and customers alike. Yet, one also has to be critical: workout-aholics looking for a regular gym visit are better off with a sports-pass (San Diego Union Tribune, 2016). Next, surge prices and relative prices for membership and “Lymber lessons” have to remain reasonable. For a lot of people, fitness does not compare to hotels and transport after all. Finally, competition is already on the rise, similar business models are on the rise elsewhere (see Dibs, NYC). Should the system turn out to be successful, studios could also decide offer as-you-go offers in their own apps, cutting out Lymber as the intermediary. Whether Lymber will surge or drop, we will see!

References

Bertini, M. and Koenigsberg, O. (2014). When customers help set prices. MIT Sloan Management Review, 55(4), p.57.

Lymber Fitness Inc. (2016). Online: https://www.getlymber.com/ last accessed 27.02.2016

Saarijärvi, H., Kannan, P. K., & Kuusela, H. (2013). Value co-creation: theoretical approaches and practical implications. European Business Review, 25(1), 6-19.

San Diego Union-Tribune (2017). “The latest craze in fitness? Dynamic pricing”. Last accessed 27.02.2017, online: http://www.sandiegouniontribune.com/business/technology/sd-fi-lymber-app-20161220-story.html

San Diego Union-Tribune (2017). “Lymber wins local startup competition”. Last accessed 27.02.2017, online: http://www.sandiegouniontribune.com/business/technology/sd-fi-lymber-app-20161220-story.html

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What Drives Immediate and Ongoing Word of Mouth?

March 6, 2017 372877kv Leave a comment

Imagine the following situation. You are browsing on the Internet, and suddenly you see the following product: a projection alarm clock which also projects the time on your wall. You think it is a very interesting and cool product, so you decide to buy the product. The next day, your package is delivered and you can enjoy the product. What is the likelihood that you are going to tell someone about this product? Probably very high, because the product is interesting and nice. However, do you think that you will still be talking about this projection alarm clock in two months? According to Berger and Schwartz (2011), you probably won’t.

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Perceived online community support, member relations, and commitment: Differences between posters and lurkers

Image March 6, 2017 370507lz Leave a comment

Leave a comment or rate this post, unless you are the “lurker” I am about to talk about.

Lurkers V.S. Posters

To be clarified, “lurkers” refers to members who simply visit online communities to acquire knowledge and information without active posting behaviors. On the contrary, those who actively post messages are referred to “posters”, who could be seen as more psychologically connected to the online community than lurkers (Hicks et. al, 2012). As it’s an emerging rule of thumb that suggests that only 1% of the users of a user-generated platform actively create new content (i.e. poster), while the other 99% of the participants only lurking (i.e. lurker).

Even though the majority of the members in online communities are silent members who mainly browse and search the online content created by posters, lurkers are still considered as indispensable “consumers” of online communities. Therefore, questions are raised to the relationship with online community support, member relations, and commitment. Yang et.al (2016) conducted a case study of a typical online community in China with seven million members by the end of 2015 – Pinggu.org, where people can exchange their knowledge or seek help regarding economics, management, finance, and statistics. demographic information about its members and each member’s posting history are gathered to test the relationship between perceived online community support, member relations, and commitment.

The authors suggested a theoretical framework (Fig.1) to the question of how perceived community support shapes member commitment in online communities based on the theories of commitment and organizational support and explored how these effects are moderated by members’ social relations in terms of posters and lurkers. (Yang et. al, 2016) The phenomenon of lurking has been often overlooked in the past literatures, while the paper found out that perceived recognition for contribution and perceived freedom of expression were key to lurkers’ commitment to the community, though the commitments for posters would be increased by perceived support for member communication.

Besides, this research also proposed the sense of trust and the norm of reciprocity as moderators between perceived community support and commitments. In other words, online communities’ manager could apply this knowledge to drive more commitments from both the poster and the lurker to online communities, that is, the sense of trust in the context of online environment would strengthen the effect of the felt expression freedom on lurkers’ online community commitment. On the contrary, the norm of reciprocity did not moderate the effect of perceived freedom of expression on commitment for the poster.

Implications & Suggestions

First of all, given the fact that most of the past studies on the effect of organization support on commitment have been conducted in the offline context, Hence, the paper was making effort to fill the gap of the applicability of this effect in online user-generated platforms with applying both commitment theory and organizational support theory to the online environment.

Nevertheless, in the research, the effect of perceived recognition for contribution on the commitments of lurkers were not elaborated to explain the mechanism of the lurkers’ commitments, which would also benefit the online communities if they could better facilitate the lurker’s preference while increasing their commitments, keeping in mind that lurkers are an indispensable part of online communities.

Reference:

Arthur, C. (2006). What is the 1% rule?. Available: https://www.theguardian.com/technology/2006/jul/20/guardianweeklytechnologysection2. Last accessed 3th March 2017.

Hicks, S. Comp, J. Horovitz, M. Hovarter, M. Miki, J.L. Bevan, Why people use Yelp.com: an exploration of uses and gratifications, Comput. Hum. Behav. 28 (2012) 2274–2279.

Yang, X; Li, G; Huang,S. (2016). Perceived online community support, member relations, and commitment: Differences between posters and lurkers. Information & Management. 54 (2017), p154-165.