Where Does Your Brand Fit? π‘
Jul 23, 2024
Meet The Barbell Economy Model
The Barbell Economy Explained π€
Have you ever heard of the Barbell Economy? It's a business model created by Matt Britton that uses a matrix to categorize companies. Price goes on the X-axis, and on the Y-axis, you've got Utility (how useful something is) and Experience (how much of an experience it offers). π οΈ Just like a barbell, the middle of this model is thin. Most businesses end up thriving on one end or the other. ποΈβοΈ
The Fitness Industry Evolution πβοΈ
Remember the good old days of gyms like 24 Hour Fitness and Gold's Gym? Back in the 90s, these giants ruled the fitness scene with mid-range prices ($39-$59 per month). π° I actually worked there for a few years – those were the times! π
The Shift: Up Market or Down Market ππ
Fast forward to today, and the fitness industry has completely transformed. Companies are either moving upmarket, offering more luxurious experiences, or downmarket, adopting the classic High Volume Low Price (HVLP) model. πΈ Boutique fitness studios with specialized services are booming, while basic, affordable gyms like Planet Fitness are thriving. π The middle ground just isn't as popular anymore. Here's a breakdown of the current market models:
- Low Price / Low Utility (HVLP 1.0): Think Planet Fitness, focusing solely on basic fitness equipment. ποΈ
- High Price / High Utility: Boutique fitness studios offering specialized services like yoga or spin classes. π§βοΈ
- High Price / High Experience: Luxury gyms like Lifetime Fitness with extensive amenities like pools, saunas, and even childcare. πβοΈ
- Low Price / High Experience (HVLP 2.0): Gyms like Fitness Connection, offering a variety of classes and amenities at a lower price point. ποΈβοΈ
Choosing Your Quadrant π§©
So, where does your business fit in? The Barbell Economy model is a great tool to figure this out. πΊοΈ Simply map your brand onto the matrix based on its price point and the experience or utility it offers. Once you know your quadrant, fully commit to that segment. π This model is a valuable asset for business strategy, market positioning, and even planning a new business venture. π
Avoid the Middle Ground β
Remember, the middle ground is a risky area. Businesses stuck there can get squeezed out by competitors on either side. β οΈ Using the Barbell Economy framework helps you steer clear of this trap and ensures your business stays competitive in today's market. π
Where Is Your Business Positioned? π
Take some time to assess your brand. Identify its position on the Barbell Economy model and adapt your strategy accordingly. π This approach has always been a part of my planning and market analysis toolkit, and it's a powerful tool for any business owner. πΌ
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