There is no question that David “Patch” Patchell-Evans, founder and CEO of GoodLife Fitness, is a highly successful businessman. He has built the largest fitness empire in Canada. In 2010 “One in every 43 Canadians… [was] a GoodLife member.” With the recent acquisition of Extreme Fitness he has just added thirteen new locations to his empire.
- He has earned an enviable and well-deserved reputation for his contributions to the Canadian Health and Fitness Industry
- He has built a strong and distinctive brand identity for GoodLife through his commitment to a consistent brand experience in all locations, and his adroit use of integrated marketing communications and promotional tactics
I have personal experience with the GoodLife Brand. The equipment is generally new, the locations are clean, the staff is friendly and there is a good range of classes available.
Members that I chat with have told me they think the clubs are well run and they are happy with what they are getting for their membership fee—a middle-of-the-road experience for a middle-of-the-road fee. GoodLife’s reasonable pricing allows its members to forgive some of the less positive attributes of the customer experience that sometimes include overcrowding and high-pressure sales tactics from its employees.
Many industry pundits believe that the acquisition of Extreme Fitness represents yet another one of Patch’s savvy business decisions. One source elaborates:
- It adds a number of promising new locations from which GoodLife can expand its brand and business
- It provides a preemptive strike against impending US competition such as the soon-to-launch Equinox chain
- It prevents Toronto/GTA competitors, Snap Fitness and LA Fitness, from making further inroads in this important Canadian market
These reasons provide sound justification for GoodLife’s acquisition.
As a Branding Specialist, I do wonder if GoodLife’s intention to incorporate all the Extreme Fitness clubs under the existing GoodLife Fitness brand is the optimal decision. It is certainly one way to go, but is it the best way to go? In particular, I wonder if GoodLife may be missing a valuable opportunity to move towards its company vision—to give every Canadian the opportunity to live a fit and healthy good life—and solidify its dominance in the Canadian Health and Fitness Industry. Could the moment be right to launch a second brand?
Should Patch launch a second brand?
A winning marketing strategy requires effective market segmentation. Customers in broad product-markets do not have homogenous needs and do not desire comparable benefits. Customers in broad product-markets are more diverse and complex—consumers happy with a “middle-of-the-road” experience are seeking something different from consumers that desire a more premium “high-quality” experience.
GoodLife Fitness already owns the “middle-quality” submarket. GoodLife’s decision to rebrand all thirteen Extreme Fitness locations means it could be missing opportunities in both the premium and value submarkets. This leaves these submarkets open for other industry players to get a stronger toehold in the market—a starting point from which to more aggressively develop these submarkets. The premium submarket warrants significantly higher membership rates and profits. Could this be a missed opportunity?
The moment could be right for GoodLife to launch a second brand. A second brand could help GoodLife:
- To stake out a strong position in the premium submarket with assets it already owns
- To realize a new avenue for future growth in memberships and profits while blunting the efforts of competitors to exploit this submarket
- To retain the elite personal trainers in the Extreme Fitness locations in more affluent neighborhoods of Toronto and the GTA by recognizing their status in the health and fitness community and their more elite clientele
- To reap the financial rewards of a loyal clientele who will willingly sign more lucrative membership contracts to enjoy the added benefits that a new premium brand will provide to satisfy their needs.
GoodLife Gold anyone?