How did a fringe method to acquire overall fitness, that began in one gym, on a shoestring budget in 2000; become a mainstream activity across the English speaking world and now broadcast competition on ESPN?
CrossFit is now a global powerhouse in the fitness industry, it licenses its brand to approximately 13000 affiliates, who run “boxes” (gyms). Each affiliate pays a yearly fee to maintain the right to use CrossFit branding and participate in events; new affiliates currently pay $3000 per year. Trainers each pay for a “Level 1” training certification and then for additional training to learn particular skills, and then pay for the upkeep of this accreditation every few years. Clients of affiliates usually become trainers, who then aim to own affiliated “boxes”, the fees for affiliation incrementally increase and are permanently fixed from the date of affiliation. Some observers have likened this to an MLM model.
CrossFit gains additional revenue via an apparel, sponsorship and merchandising arrangement with Reebok, who viewed their 10 year deal as an opportunity to re-associate their brand with practical fitness and appeal to a segment they refer to as “Fit-gen“.
A Reebok shoe aimed at the CrossFit market.
CrossFit is promoted largely on word-of-mouth endorsement or left to affiliates; its most pervasive form of public advertisement is also a major direct source of revenue in the form of broadcast rights. The CrossFit Games begin as a set of worldwide trials, then the best performers go to regional competitions, with the winners then competing in a multi-day, live broadcast event on ESPN. In the last four years participation has grown from 69000 to 325000. Men and women receive equal prize money and also compete in mixed teams (CrossFit membership is also almost perfectly balanced between sexes). The Games concluded yesterday.
In its infancy CrossFit’s strategy was defined by a simple differentiation. In brief:
- WODs (“workouts of the day”) are short, intense and ballistic, usually not something you can perform in a regular gym. They vary from day to day and are released on the internet or devised by a trainer. By nature they require a special space.
- Participants are pushed hard to compete with each other, in teams and against their own times and records. They are held accountable for their results. Most mainstream gyms seek to provide low-stress environments. This drew in a clientele of high-performing individuals (at one point 40% had a postgraduate degree). In all markets CrossFit members have incomes considerably above the median. They purchase more apparel and pay a higher fee than the average gym member.
- Appealing to a sentiment of duty. CrossFit set out to train and hire (particularly into directorship positions) from the military, police and fire services. WODs are often named after fallen servicemen (HeroWODs), and their deeds are invoked by CrossFit materials to inspire. Participants feel like they are a part of something bigger than themselves, a “Holy Grail” of marketing.
Over time an emergent strategy grew, informed by the strengths of the early model, it can be defined by the following:
- The effort to establish a strong social and community focus was intensified. Customer intimacy, brand loyalty and cultish members are now universally recognised hallmarks of the brand. Being part of a community often entails learning new lingo, and CrossFit piles it on. WODs, Uncle Rhabdo, AMRAP, ATG, poods, Uncle Pukie, Fran and Murph are all introductory level terminology within a “box”. The community also had a large overlap with Paleo dieters in its infancy, futher enhancing the feeling of being part of a unique subculture. The company promotes its own celebrities, like Rich Froning and Camille LeBlanc-Bazinet.
- Combative litigiousness in defence of the brand. In multiple interviews CrossFit management have expressed the need to avoid “generocide”. They ruthlessly pursue those using their trademark without permission, as they are aware that the fitness industry has begun to categorise all similar forms of training using their nomenclature. To that end they have maintained dozens of concurrent lawsuits to that effect for several years.
- Affiliates bear the capital cost of promotion and establishing new locations, they can receive financing via Reebok or Rogue, the main supplier of equipment to affiliates. Direct contact with the end user from the parent company occurs primarily through social media, online publication and competition.
To date CrossFit’s weakness has been in penetrating non-English speaking markets, how their strategy adapts to deal with that challenge will be of some interest over the next few years.
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Bloomberg.com. 2016. Why Can’t Reebok Get Fit? – Bloomberg. [ONLINE] Available at: http://www.bloomberg.com/news/articles/2015-03-06/why-can-t-reebok-get-fit-. [Accessed 25 July 2016].
Reebok’s Refit. Marketing News. Deakin University Library| May 2016. Deakin University Library| [ONLINE] Available at: http://web.b.ebscohost.com.ezproxy-f.deakin.edu.au/ehost/pdfviewer/pdfviewer?sid=cd984e22-4148-4bbc-8626-91cae5e046b1%40sessionmgr120&vid=0&hid=107. [Accessed 25 July 2016].
TIME. 2016. 3 Reasons People Are Obsessed With Crossfit. [ONLINE] Available at: http://time.com/2890075/crossfits-primal-appeal/. [Accessed 25 July 2016].