Crossfit has taken advantage of the public’s current fitness and health obsession. Estimated by Forbes to bring in roughly $4 billion in annual revenue, it’s hard to argue with Crossfit’s success. Have you found yourself wondering how can you apply their success to your product? Going viral as successfully as Crossfit requires first an understanding of the viral market, which has the potential to make or break your business nearly overnight.
The Viral Coefficient:
How effectively do your current customers attract new customers? In the example of Crossfit, there’s a popular stereotype that you’ll never have to wonder if someone does Crossfit – they’ll tell you (over and over again). However, the viral coefficient can’t be explained away as only a random phenomenon, reserved only for a few lucky companies.
The Viral Coefficient (as defined by Startup Definitions) is the term used to measure “the average number of invitations sent by each existing user times the conversion rate of invitation to the new user”. In Leman’s terms, it’s the rate at which new customers join having received an invitation or recommendation from an existing user. As a general application, this coefficient reflects the happiness of your customers: only satisfied customers will insist that their friends use your product.
Paying attention to how often your customers will recommend your brand is important. This can be done through websites like Google Analytics, customer surveys, or referral codes.
How does going viral help?
According to McKinsey Quarterly, “Word of mouth generates more than twice the sales as paid advertising.” Once people start talking about your product, your business will begin to grow rapidly. This happens partially because word of mouth targets exactly the customers who will be in the desired market and also because it is considered by consumers to be more trustworthy.
So how did Crossfit manage to take advantage of this viral coefficient and create a brand that was worthy of such “work of mouth” loyalty? Here are the top reasons Crossfit works:
- Repeatable and Successful Plan – A Crossfit “box” (the gyms that use the Crossfit plan and name) comes with a tried and true method; Greg Glassman, founder of Crossfit, has created a very clearly organized and replicable franchise strategy with exact processes, making boxes easy and efficient to start. Apart from a start up fee and instructor training fee, there are virtually no barriers to entry for anyone to join the brand.
- Think about this: since boxes each have an annual fee of $3,000, and there are now well over 11,000 boxes, Crossfit rakes in around $33 million a year just for operations fees. Add in the $1,000 seminar fees and account for the fact that Crossfit has virtually no need for extra expenses (apart from the basics), and it becomes clear that Crossfit boasts a nearly ideal business model.
- Everyone Can Do It: Whether you’re fit or not, Crossfit promises to make you look and feel better, no matter your current state. This attracts a broad audience.
- Targeting Busy Folks – Mothers, fathers, business people, military folks; anyone has the time to do it.
- Community – Crossfit provides customers with a supportive, competitive, and achievement driven community in the otherwise solitary field of personal exercise. By tapping into these facets of basic human nature, Crossfit capitalized on our intrinsic desires.
- Endorsement – Glassman managed to receive interest from a large national brand, Reebok, who offered to provide financial aid to those hoping to open their own Crossfit box. This brings national attention, a successful partner, and increased marketing opportunities. In fact, Chris Froio, Vice President of Fitness & Training at Reebok is quoted in this article as saying: “The whole aspect of social media, social lifestyle, and the way people interact is where fitness trends are going”, which is what originally drew the company to join forces with Crossfit in particular.
- WOD Names – aka Workout Of the Day, Crossfit has cleverly named many of their workouts after women and heroes (including veterans and fallen officers). This is a feel-good way to be respectful, inclusive, and socially conscious.
- Results – Crossfit works. Just look at the before-and-after pictures. The product is useful. (Have you ever seen the abs on these people?)
- Improved Trainer Environment – Marion Maneker explains in this article that traditional personal trainers are limited by their available time and clientele. Crossfit eliminates those constraints and offers the opportunity to grow with the support of a huge brand name.
- Bad Ass – It’s a cult. Those who avidly do Crossfit not only love it and talk about it, but they are also eager to represent their brand and show off their skills, which we all have to admit are pretty cool.
- Social Media Stars – Before-and-after pictures, national olympic-like competitions (that make superstars out of repeat winners), instructional videos, and targeted social media all provide shareable and attractive ways to entice potential new members.
- In fact: Rick Froning has made a living off of competing in crossfit games. He has won the competition every year between 2011 and 2014, later earning the title of “fittest man on Earth” and making over a million dollars in prize money. His fame from Crossfit was so widespread he has now received sponsorships from Oakley and Rogue Fitness (plus his own custom shoe designed and sold by Reebok).
All of these positive features of such a successful, nation-wide business (who’s number of gyms has grown to be about 22 times the size over the last 9 years) can be applied to all kinds of other business models. Pay attention to what makes companies go viral and take the time to relate the strong points to your own endeavors.