EP 19: Disrupting the Fitness Industry with Digital Technology Strategies w/ Craig Miller

ABOUT THIS EPISODE

The digital transformation of Planet Fitness has been an essential part of the business’ current and future success; but driving that change early-on required some encouragement to see its benefit.

Craig Miller, Chief Technology & Information Officer at Planet Fitness, joins the show to discuss how digital is changing the world of fitness.

We talked about Craig’s Background and Time at Planet Fitness, Planet Fitness Explained and It’s Digital Maturity, Realizing Early Opportunities for the Digital Customer Member Experience, Convincing Stakeholders to Drive Digital Initiatives Forward, Hardware’s Role in the Digital Transformation, Regulations For Data , and Expectations for 2022 & 2023.


To hear more interviews like this one, subscribe to the UnleashIT Podcast on Apple Podcasts, Spotify, or your preferred podcast platform.

The reality of the way digital technology strategy have to get executed. Is really a cultural change, it's a business change and only way to really affected and executed is really helping to lead it within welcome to unleash it, a podcast where we discussed the experiences and ideas behind what's working in enterprise architecture and digital transformation within the IT landscape. Unlock Your Business has digital capabilities. Transform your enterprise architecture. Unleash it. Let's get into the show. Welcome everyone to another episode of the unleash it podcast. It's a pleasure today to welcome crack Miller, who's the chief digital and information officer of planet fitness. CRAIK is serving the company since two thousand and seventeen and is leading and driving forwards the evolution of all that digital information systems and the company's technology innovation. So welcome, Craig. Thank you for being guessed on the show. So first of all obviously like to hear a bit of Mouth Yourself your job as planet fitness, as well as what you've done before your current Vole Andrei. Thank you. It's a pleasure. Pleasure to be here. One thing which I'll get a little bit later. My new title is Chief Technology Information Officer and I'll actually explain where the digital went, which is really kind of part of an amazing story here. It, I think, a planet, but, as you say, I'm the chief technology and information officer for planet fitness and seventeen almost four years now, my mission gear and coming on board was as as the leader. Planet is leader really in the world in terms of membership in fitness and there was an acknowledgement that technology in the fitness industry was getting to evolve and disrupt in certain ways and as the leader the our board and our...

...executive team and our franchise, he's felt like we should be leading that innovation. Just didn't really know how to go about it. Where do we start and how how do we do it? And so that's my background and you know, I'll walk you know as we get through probably this discussion dialog, I'll kind of I'll share that story. But if I if I kind of wind back my my careers, is probably theme as specializing in emerging technologies for, you know, for the last thirty plus years and helping companies to leverage emerging technologies to create competitive advantage or drive growth and that's the theme and I've worked in just about all industries. I spent half of my career consulting and advising from the outside and then half of it from the inside, essentially, and we'll talk a little bit about the many ass well, why, you know why I kind of work on the inside. The reality of the way digital technology strategy have to get executed is really a cultural change, it's a business change and the only way to really affect it and executed is really helping to lead it within. So I've enjoyed, you know, really kind of you know, both throughout my career. I came out of college with a masters in computer engineering really started working on advanced solutions, mostly for military contractors. That's where most innovation occurred thirty years thirty five years ago, and then as technology start to evolve in the business, I kind of shifted to I really wanted to get more into understanding how to drive technology in the business world. And then in the early in the late s early S, when Microsoft really led the the innovation on computer and everyone's desk and windows, and we all kind of know that, I also really started to gain a lot of experience with consumer products and so both my career kind of, you know, split between helping companies drive innovation for their businesses and then building consumer products. And in twenty years later, the advent of mobile, they've come together. We're now businesses are really driving consumer products with, you know, into the...

...hands of their customers. I've just had the great fortune of staying kind of ahead of the emerging technologies and learning different businesses and through that time and not we'll talk a little bit about it. I think in more detail. I've kind of developed a modeling of how to come in and understand what does it really mean for Your Business, and we'll talk a little bit about that. But I've worked in big companies, large companies, private equity turnarounds, taking companies to the next level and it's been an extraordinary journey for, you know, for me throughout great yeah, so kind of way to jump into the topic deeper. So let us let us go back like almost four years now, right, so as when you joined planned fitness. Can you describe our listeners a bit about what like planet fitness does for wherever doesn't know it? And then the key question I have is like what was kind of the digital maturity at the time yeah, what gaps did you see on the technology or in the organization that side when you joined? And Yeah, how did how did the story start? Well, the story is started with an amazing brand that that really started about back in the early s, more than twenty six, twenty seven years ago. And you know the time there lots of gym brands kind of evolving and it was at that time. It is probably fifteen percent. But but we see twenty percent of consumers belong to some sort of have the gym membership of some sort. The other eighty percent don't. And and will planet really tapped into back then. Is the differentiation. Will let the rest of the world go fight over the twenty percent. We're going to go after the eighty percent. And so that consumer base, you know, really centered around most consumers who never even went to a gym or belong to a gym. There and and our CEO talked about the time. You know, they're just on the couch. Write. Our job is to get him off the couch, you know, and and give them a wonderful experience. So that was one, you know, really brilliant way to differentiate. The...

...second was we, because of the nature of those consumers. We kind of consider ourselves not a gym but a no judgment zone. So anyone and you know, can come and feel comfortable in the matter who you are or you know, what shape you're in and what you know, what you want to do. So we create a really amazing environment out there that no one else really, you know, is created and it's just fun. I mean we have things that kind of blow most people in the industry way. You know, we've got, you know, one night a week is pizza night and other night is Bagel night, and I mean we just we just really try to make it inviting, fun and no matter who you are, just any sort of activity is better than none, and that that's kind of you know. And and so with that the brand is is that an amazing journey of last twenty, twenty five years as they got went the franchising. As I said, we're the largest in the industry by far, almost double a number of members and we have over two thousand clubs, most of which are back open again, you know, after keepter Covid and so very unique story, very unique brand and really part of the intriguing part of me wanting to be part of the the you know the next you know kind of chapter that story. So our our CEO and executive team and board again realizing that that that fitness is kind of evolving. You had the pelotons coming out, you've got every one putting wearables out, but no one is really pulling it all together in a meaningful way and certainly no one's pulling it together for the eighty percent, you know, the ones who never have gone to a gym or in frequently go. And so, as leaders in the industry, the mission was we want to we want to start leading the innovation around that, main given our size and scale there we have ways, you know, we kind of have advantages that wills don't just because of our size and scale and and the breadth of our consumer base. And so that started the journey in in seventeen we they just we just don't know how to start. We're to and had it, you know, how to get there. So that that's my background and that's when I became part of the family and I probably think that you...

...were a bit ahead of the curve at the time. So you mentioned Peloton as an example like which which evolved later. So I it sounds like a very good timing to bring you on board, to identify this early, now that more and more is like popping up. What are some of them? Like early opportunities you identified for the digital customer member experience? So can you give us some examples where said, like this is what we identified, what we could do better? How could you like change those or realize those opportunities and bring them also like on the rope map for further change down the line? Yeah, so, as I said earlier, I have a way to model. Come into a company model. Where are those opportunities? And the model starts one with starting just with the customer, who is our customer? And if we got to Pelton, a lot of a lot of folks in the industry say, well, you worried about Peloton. Really not, to be honest, because one is we're complementary to that. We're many folks at peltons. We have a plan of fitness. You know membership. You know ten dollars a month and you know our higher you tear is up at. You know twenty three. Is that? It's I mean some people pay more than that in starbucks coffee. You know every single and and so it's really the just because of our unique target consumer. Those types of things don't, you know, complementary or it's not even, you know, a target for our member and so I typically start with a study just understand our consumer. Who are they? What are they looking for? And so any strategy starts with the consumer. How will heater? genious, would you say? Are the groups? Because I can imagine it's like like like people in the in like the S, all the way up to like in the s are coming to planet fitness. Right, that's right. That's part of our uniqueness is we have such a broad spectrum, MAB demographics, all ages, genders. It's just it's a brought because of the eighty percent. We have such a...

...broad mix. Me and and see. You have to you have to try to appeal. And so what we what we do is we that we start with what's called the customer segmentation to kind of understand what that spectrum looks like and then we start to look at and we kind of broke our spectrum into about five or six different segments based on behaviors and what their needs were, and that gives us the ability to go across that spectrum and what solves for one customer segment is different than another, and so we that gives us tremendous opportunity. But that's our starting point and I guess a lot of that can be done like data driven. Right. It's actually a study. So it's a it's a study that, you know, we bring a partner in that specializes in consumer segmentation. We partner with all marketing department and it's about three months. It is various different techniques to kind of pull that in and kind of identify those segments, the behaviors and not only kind of what they do in fitness but other affinities to other types of things. So we know this time of segment, you know, likes to go to McDonald's or likes apple, watches or Max and we know really kind of the the entire profiling of those segments and that gives us a really good sense of vent diving deep to say how do we meet the needs of that that segment? And again we look across because we have such a broad, you know, broad spectrum, but it always starts with that. The second study we do is what's called the journey mapping. So we'll take each of those segments and from beginning of driving awareness of who we are, to engaging with them as prospects, to hopefully we bring in on as members and, quite frankly, to even if they leave, and we look at that, at understanding what their needs are, and then through the entire engagement cycle, you know where, where do we do well, where don't we do well? You know where is their friction in that engagement. You know where do we delight them, where don't we delight them? And so the combination of those two studies becomes the basis...

...of what you know, our strategy road map would look like. How does this work? This sounds to me like a very cross departmental exercise. To do the customer journey and that is this and map paying and so it's that. Who who coordinates? That? Is that like someone off your team? Who theyce out how to do it and then different people work together. Yeah, so it is. It is very cross functional. So those two studies were the underpinnings of my my initial modeling and assessment and then essentially marketing ops and our strategy analytics group. We all get together and because our strategy and analytics really drive a lot of the analytics in our business. You know, they led the customer segmentation and then, you know, once we kind of got that, and then marketing was the journey mapping, because not only does this inform us on the digital and technology strategy, but it also informs us on the marketing strategies as well, and so it's very cross functional and you know, the for art, The for kind of the four groups really huddled together to kind of drive the those deliverable. How does he could? Was it to sell and prepare like the different stakeholdness in the business for for this change? Like, I mean it sounds to me like you create it, like you are smart, by creating a good baseline in terms of data proof in how the customers behave. But what else did it take to like convince, convince the stakehold is in the business to drive forward digital initiatives? Yeah, it's a great question. There are three phases in what many read and hear about is digital transformations. The first phase is kind of digitizing and that's just putting what I call the plumbing in right to tech, the tools, the infrastructure, and usually the tech team is pretty much that's somewhat you know, not isolated, but they're kind of leading that what once you have kind of the found the digital plumbing in the foundation, the infrastructure to even support...

...whatever strategies makes sense for your business. The second phase is what I would say is operationalizing, and because the the one mistake that many, many companies make is the approach it as a technology strategy and it isn't, you know, digital digital strategies or business strategies with a large component of technology, and so you have to approach it as a business strategy and every function really has to kind of transform. This is an example. Traditional marketings very different digital marketing. So you have to you have to build the processes and talent. You know, as you move into your business into a more digital world, operations has to change. Find every function has to change. That's sometimes the most challenging piece because that's kind of cultural right, and it changes the way you kind of you do you run your business in some cases, but in our case and a lot of brands, you don't want to lose the the fundamental DNA that that really defined you, but you want to figure out how to adapt. Right. It's not a complete transformation, it's a you're adapting, and so up front it's a little challenging because, particularly when you have such an extraordinary business like planet, you know, very often, you know, I would get well, you know, our business is not really broken, we need to do this, but it's kind of not our customer, our consumer, and what you have to do is educate and say, well, no, it's not that. It's broken today, but you know, two, three, four or five years from now, it we could start seeing it if consumers are looking for things we just don't have. And then in terms of it's not our consumer, well, may not be our consumer today. The consumer shift and many companies, you know, in a blank of and I find I mean, look at what happened with Amazon. You know, I worked in retail and I can't, you know, come so many companies, seers and others, all these companies been around for a hundred plus a year, said that's that's you know, that's just a fad. Will look at what happened, I mean overnight, practically. You know, it just it is consumer shift. That's why I have to start with consumers. Where they are today and where are they going to be tomorrow, three...

...years, five years, and so it is. It is a education, it's a it's a selling up and what I typically do is kind of sometimes the best way to influence is to show them, and so some of the earlier initiatives are just to get things to really show what kinds of strategies are going to work and and then all of a sudden folks begin to kind of say, okay, now I think I get it. So in our journey we spent the first I spent the first year kind of putting in the foundation, the second year working with the business and what strategies may make sense, doing some early wins and, you know, we we now have. You know, when covid hit, fortunately we had a lot of that in place and when we closed our doors it was a first time that every business we kind of got broken and, you know, in our CEO basically said, you know, we never had the ability when our members walk out are, you know, our doors, what they're doing until they come back. We now have the ability with technology, and covid shut our doors for a while right, and so with tech, with digital, we now have a ways they connect with our consumers, keep engaged with them, and so fortunately we had it. You know, we had it kind of built and ready. We basically accelerated it and it started to really open the eyes of the power around how we can engage with consumers. And all of a sudden it's like the lights went off. Right, I we get it now how it connects with our business. And so then each of our functions started to really develop different processes, not completely different, but to adapt. We started hiring talent. So all of a sudden our organization was becoming digital. And so that that's kind of you know that. That that's the second the third phase is commercializing it. So now that you're operating in a digital manner, now how do we commercialize it to truly drive the growth in the business? So it sounds a bit to me like this saying good as the enemy of great in...

...your case, right. So if you're in a great in a good position today, or in a great position today, so how do you stay there? And and and the second takeaway for me is like, although you're more like, you could say a business which depends on physical relationships, people coming to your to your locations, you're almost like, from a strategic perspective, seems to be like benefited from from from like what happened, because in the end it might have accelerated the whole transformation of the business. Is that a fair statement? Right, it is. And again, even though I try to drive it as as as a digital strategy, at least the first year or two, folks had a difficult time trying to get beyond it's just the text rategy. But when when covid shut our doors and we were ready and we were we we had free we rolled our new mobile platform and experience out in August of nineteen. Thankfully, we started to evolve that. We partnered with a company that is one of the best in the industry on fitness content to really, you know, bring to life a lot of the experiences mobile APP we had the build and we took a very different approach that. So we identified how could we differentiate? Most of the industry, even in the gym sector, is either you in the gym or you got a mobile APP. Right for fitness. Well, our CEO always had the vision that it's not about, you know, at home it's not, or in the gym. It's the fitness journey and it's just both venues are part of that fitness journey. So let's focus the experience not on the venue where you are, but on your journey, and so we built that to not only and elevate the experience in the in the club, in our gyms, but also stay connected outside of our gyms, to continue, you know, for supporting their journey and staying engaged with them, and so we were ready to do that. We just kind of put it on, you know, on high gear and we accelerated that. So when our doors closed, we rolled o out a new APP. We even went and built a subscription if for those who...

...didn't want to be Jim subscription, we at we created a digital subscription we call pf plus. We also for those who were a little, you know, uncomfortable with I don't know, you know, is the gym really crowded when we started to open, we built the ability pretty quickly to say we'll give you a crowd meter and so if you're uncomfortable, you want to come to the gym, you can see how crowd of the gym is. So we really started to take the friction, take the barrier is down, particularly for the eighty percent, and so it became, you know, an amazing way to engage with consumers in the club, outside the club, outside the fort you know, walls and really drive a whole different experience that I think the industry, you know, really hadn't seen, at least in the way we were approaching it. Are you engage or have you've been engaged in like own hotware before? So do you do do anything like for the locations in hardware before, and and is that? Does this play any any role in the future in this hole, in this whole like more digital experience like hardware can be like. So I mean what I see happening, like you have those fitness mirrors with with play like. I mean we have like we have like a company over you and euro boy, even in Germany, and I think there's one one in the US. There's like bikes, there's like tread mills and stuff. So do you do you and get it's like hotware playing a role for you too. It will. So we built our digital platform and mobile to be able to integrate with equipment, because that's Party of fitness journey. We have a couple of vendors all in our club. So our mobile will will connect with, you know, with the equipment. We were testing kind of fifteen clubs with that right now. What we found interesting, you know, and it goes, it speaks to the Peleton is not necessarily our segment. Is that we have fifteen clubs with these big beautiful displays, Peloton like equipment, and we find when we go to the when we go to the clubs and we look at many of our members have their phone in...

...front of that. They don't even look at this way, they have it on their phone. And so what we did is is we built the ability if you want your content coming off your phone or if you're on a connected piece of equipment. We're testing that now and then we're beginning to work with other companies on wearable integration. We actually tested a mirror integration and so in the futures part of the journey is we want, you know, to be so ubiquitous that, no matter what equipment you have, you could say, well, you know, if I'm a plan of fitness member, you know will connect and all it really needs to do is track what you're doing or give you some guidance on what to do next. Right, and it's a sin. And as long as the equipment is is digitally connected, then we have the ability to build those those connectors, so to speak, and so that is very much we're testing it now in our clubs and very much part of kind of our future. Yeah, fantastic. I totally like that, that vision. I mean it's kind of like, if you compare it to the more detect what is almost like a hybrid. It's like hybrid. It's ecosystem based. Yeah, so it's it's open. Yes, so it sounds to me, I mean, if we're switching for a second more towards the technology sign that you have to also make sure on the on the architecture side, on the infrastructure side, that you're prepared to integrate open. The apis like all of that you need to have. I mean, how would you describe the journey there? Yeah, but so that, if you're a call the first phase was a digitization of the business and you to really thrive, survive and thrive in the in the in today's digital world, you have to be out, you have to be in a connected environment. The fitness industry, if you compare to other industries, is pretty much been a lagguard in general. You've had the Pelotons, you've had the apple watches in the FITBITS, but they're all peripheral. Right, situation and and so when I came into the industry, I realized, you know, it very antiquated, so...

...to speak, compared to other industries. And fortunately, being in other industries, I was able to use kind of blueprints that I knew on how do I how do we elevate? Well, but get given our size and scale and in our ability. The first step we had to do is I had to fit. Like you build a house, you gotta you got to build a new foundation and plumbing, and so we had to build a platform, an integrated echoes that would allow us to start connect different pieces of the enterprise, different pieces of the experience, and so and in today's technology architecture, you know, the world is shifting really from standalone application stacks to cloud base. So I spent the first ninety days modeling the business. I already had partners that I had used before I secured funding for the first year to build that platform, to build that cloud based ecosystem with API integrations. And so, if you think about it once the fact the the fundamental element of all digital whether it's the experience, is data, and so that's the fundamental fuel, so to speak, and so you need to build plumbing that allows you to move move it with no friction across any part of your enterprise, across any consumer experience, and so that's the first thing we did and we based our foundation on aws, Amazon's cloud. We built it too, Apis. We went to all of our existing vendors and we built Apis so that we basically, within twelve months, we shifted the in the entire business on to the platform running the fundamental business. Then we started building the channels. We new to own the mobile experience, the mobile we needed to build our own mobile platform. That's bigger than an APP, just the platform. So we started on mobile web. We started building integrations to a couple of wearables out there. So we started to build the channels. We integrated with our billing and collection system. We integrated, you know, with the ability for other...

...third parties like you talked about. We actually tested an integration with mirror. We tested an integration, you know, with another probably a company from Germany, who also had a similar type of platform. We in it. We built the integrations to all of our equipment vendors as the foundation and then we just start building the experiences on top of that. Fantastic. You spoke about data before. Are there any specific like regulations or like, I mean in consumer you easily get the topic of data privacy. How big of a role that's this play for you? It's highly significant, because the challenge that that, you know, the whole connected, you know, architecture created was now you're you're pulling in, you know, information about consumers. Now, in the finance industry there were, you know, already regulations around payments and PCI and those types of things, but now that you start opening up your engagement with consumers, it opens up, you know, a massive scenario that you have to manage fundamentally at the foundation, which is around Pii, in personal information, and that that I mean you can have the best experiences in the best technology, but all it takes is losing the trust and the confidence of the consumers and it starts impacting your business. And so it is the foundation of the platform that anything that connects into the platform, that we have controls in place to really manage against whatever compliance regulations, we go above and beyond because at the end of the day, if we lose the trust and confidence of our consumers, then we start our business, you know, then starts being impacted. Yeah, totally makes sense. If you look at hat twenty, twenty two, twenty three, like, what can we expect from from this journey? What out the areas where what you see further enhancement, digited technology continuing to change, like like your industry, if you if you have like some predictions, what you think is happening? You want me to talk...

...industry wise or planet? Maybe both? So both interesting. So what West is west, like this industry, going and when? What role will you play in that here? So so, Industry Wise, there's no doubt that that digital and technology is rapidly in innovating and transforming the industry. And like, and I've been through this in other industries before, this scenario where from the outside end there's extreme opinions. And so with Peloton, with clubs closing, with covid there was all of these public, you know, opinion around outside our industry is that Jim's are going away, it's going to kill the gym industry and that everything's going, you know, to home, Pelton is going to you know, is going to rule the world or Pelton like experiences. And what we found is that's just not true. You know, as a matter of fact, you know, we have seen the shift back. We have great demand coming back in in terms of our membership, can you know, growing. There's no doubt that Covid, you know, while we were clothes, had an impact in our business. But there is tremendous to me and people want to get back in the gym. And so what what I think it has done is it has accelerated, and we've talked about this or CEO talks about this. It's just accelerated a pattern in a trend that that was we were on anyway. It's accelerated to buy three to five years right with the closing. So the good thing is we're looking ahead on where do we think the industry and consumers are going to be and and I think are thinking about it's not about that just the gym or the or the home. It's about the fitness, you know, the whole fitness journey and the wellness journey, and Covid, if anything, is really heightened the importance of that for individuals. Right. And so we believe that when, when we got hit with Covid, that we're going to come out of this even stronger and and that's the path we're on. And with digital what we are and...

...because we're going after the eighty percent who kind of don't know where to start and we're what to do next. We see a tremendous opportunity to really take the amazing brand that's been built and adapted and extended so that we now can go beyond just a gym experience and go into a full health and wellness experience with our members, with the advent of digital but there, you know, you can buy a Peloton, you could buy equipment at home, but then you have wanted two piece. That gets pretty boring after a while, even if you take different classes. And so again, for ten dollars a month or twenty three dollars a month, you know how you've got this wonderful environment, you know, with with hundreds of pieces of equipment that you can come in and you know anytime. So we're taking that that that that brand, that uniqueness that we started twenty six, twenty seven years ago, and we are shifting with we're consumers, are going and still differentiating ourselves and what are see how you like to say, we're widening the moat with the rest of the world. And again, if you want the Pelotons, you want any of these other things. It really is complementary to what we're offering and digital allows us to really kind of accelerate that. The other thing I would tell you is that during covid and the success of the digitization and as we started to really build the talent in the functions, our CEO is pretty much said, you know, if you look at how we've grown over the years, he sees that digital is becoming one of the the four major growth drivers of our business, for a five major growth drivers, and we're building the talent and organization. Hence, you know, I really started the roadmap in the journey for the brand, which is my my title was had digital in it. Well, we're hiring other folks in all the functions and we just hired someone who's just going to focus on commercializing and accelerating the commercialization and the experience...

...of what we built. That's all they're going to do. Right. It's not marketing, it's not tech, it's not ops, and so that and that. That person is our is our chief digital officer that I kind of spawned off of, you know, the for your journey we've been on, and so we continue to invest in talent, we continue to invest in the innovation and and really looking at at what can you know what are what consumers are looking for and being there you know before they even know that they want. Craig, thank you very much for these fantastic insights and I just looked it up as we spoke. When I'm in Boston next time. So I've seen the the closest one to to actually our office might be the one in the Boston common. So I have to check it out to see it all live. So kind of way to do that when I'm back in in Boston, where part of our team sits. So yeah, it was a pleasure to speak to you today. I learn more about like what it means for the industry. Also, what are some of the like requirements to what's the architecture apis ecosystem underneath? Forget it, putting that off. So we sho all best of success and would love to catch up at some point in here how the journey went. Yeah, my pleasure and look forward to it. Thank you. Thank you, Craig. You've been listening to unleash. I T to ensure that you never miss an episode. Subscribe to the show in your favorite podcast player if you'd like to learn more about enterprise architecture and tools to help unleash your businesses digital capabilities. Visit Lean ix dotnet. Thank you so much for listening, until next time.

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