Two of the co-founders of San Diego-based digital agency Digitaria hope to add some oomph to the business side of the fitness boom. In fact, they hope to revolutionize it with a new app that they believe will do for the fitness business what Expedia and others have done for the travel industry.
The app is called Lymber, which features a dynamic pricing algorithm that enables customers to book on-demand fitness classes (or just go to the gym for a workout) from a menu of options. Prices will vary depending upon the popularity of a particular class or teacher, how full the class is at the time of booking and other factors.
Both Doug Hecht, the former COO of Digitaria and Chuck Phillips, the former Chief Technology Officer, left the agency—now part of J. Walter Thompson’s Mirum--last year.
The app is currently in beta test mode in Los Angeles and San Diego and is scheduled to formally launch in the two markets next month. Plans call for a rollout to about 15 major markets including New York, Chicago, Dallas and Denver by year’s end.
The Lymber pricing model is an alternative to existing apps that charge membership fees. The problem with that model, as Hecht sees it, is that “they’re relying on breakage and essentially hope that people don’t show up,” because the membership-based app purveyors have to pay their gyms and studios each time a person takes a class. Hecht likens it to an “all you can eat” model for the customers. The more classes they take the less profit remains from the membership fees collected.
The Lymber model, says Hecht is a “win win” for all involved—the customers who pay as they go and thus tie usage to their specific needs, the studios and gyms that theoretically gain fuller classes and Lymber which receives a percentage (averaging around 25%) of each class or session sold.
But the affiliate fitness centers get more than additional class participants. They receive an analytics package that lets them compare their sales to sales of competitors as well as insights into how to improve performance. Customers using the app can also keep track of their fitness goals. They can also monitor their budgets—the app keeps track of classes they’ve purchased and attended and how much they’ve paid.
The app currently has a couple hundred participating gyms and studios in Los Angeles and San Diego and facilities are being added each day and will grow exponentially as the app rolls out to other markets. “The technology is built so scaling is simple and we expect it to be a quick process,” Phillips said. The app interfaces with third party software providers such as mindbodyonline.com to keep track of classes and availabilities. But for fitness affiliates that don’t use outside software, Lymber can provide a direct link.
For now the app is iOS although an Android version is in development and there will be a website from the start where Android users can access the app’s services. Participating fitness centers and studios run the gamut from spinning, yoga, Pilates, regular gyms, ballet and even pole dancing.
The app is being funded by Seed San Diego, one of the city's leading venture capitalist groups, which counts Taner Haligioglu, Facebook's first non-founding employee, as one of its principals. Currently the company has received $1.1 million in funding and may get more.
Given the agency backgrounds of Hecht and Phillips it’s no surprise that marketing plans are being formulated in house. They’ll include referral programs, social media, direct marketing and other channels. “Nothing is really off the table,” said Hecht.