Did you know that 20 years ago, Pizza Hut sold its first pizza online – reportedly the first thing ever sold on the Internet. Since then pizza chains have been leading the way in online sales innovation in a highly competitive industry.
It’s hard to believe that a fitness programme that’s taken the world by storm and is worth more than $500 million was started completely by accident.
“I began as a fitness instructor in Columbia and one day I forgot my aerobics music tapes at home. I looked in my bag and took out my favourite salsa and merengue tapes, improvised the whole thing and taught my first ever class of Zumba,” says Beto Pérez, inventor of Zumba Fitness.
In 2002 he teamed up with US entrepreneurs Alberto Perlman and Alberto Aghion after an exchange that’s become part of Zumba’s founding lore:
“Today, Zumba is more refined with cleaner technique and specific fitness goals, yet remains faithful to that first lesson back in Columbia.”
What Pérez had spotted in the 80s was that fitness, dance and fun were crying out to be merged. Over time the offering has evolved to meet consumer needs but retains its energetic and fun vision of exercise. If you’re wanting to launch your own concept look for gaps in the market that can be filled by merging ideas or offering something exciting and beneficial. Keep in mind Steve Jobs’ approach that many people don’t know what they want until you show it to them. Similarly, if you’re looking to invest in a franchise, what makes the concept you’re interested in unique and exciting? Be wary of fads that will fizzle out.
“After seeing his fitness class, we expected 30 or 50 people to show up, but there were 150 people crammed in all smiling and sweating, I said we have to take this and maybe make videos and sell them to consumers,” says Aghion. “And Beto asked me, do you have any money, and I said no. Do you? And he said no. So we shook hands and said, let’s do this.”
“Do you know why?” asks Pérez. “Because before I talked with him, someone had offered me a million dollars, but there were too many terms and conditions attached that took away from the heart of what Zumba was. When I met Alberto Aghion he had nothing to lose, so I said ok, let’s do it.”
When investigating a brand, look to see what makes it truly special. Are you investing in a small company whose magic will be lost as it grows? If you’re a small franchisor looking to partner with a larger company, does the executive management team respect what makes the brand magic?
“At a 2003 convention we expected a few people to show up for their first instructor training session. 150 showed up from all over the country. They wanted to teach Zumba at their gyms and were looking for licensing or certification. We created the Zumba Instructor Network (ZIN), an educational and community platform.
Be open to additional sources of revenue. Although Zumba’s main source of revenue was generated by home videos, they were open to ideas and the market demand for certification was hard to ignore.
As a business-owner or franchisee, always be open to new sources of revenue but be mindful that it doesn’t stray too far from the core business. As a franchisee, communicate openly with your franchisor about any new ideas you may have; after all, that’s the reason McDonald’s spin-off concept – McCafé – exists.
Zumba Instructor Network (ZIN) focuses on turning instructors into entrepreneurs, supported through their ZIN platform. By 2005 they’d trained around 700 individuals who kept returning to training for new routines and music. They also ploughed $50 million in 2012 and $63 million in 2013 into infomercials, driving consumers to classes.
In 2001 the three partners started making videos and infomercials of the class. We signed a deal with Fitness Quest to produce a few hundred thousand units. But their call centre got flooded with people asking where they could take the class and how they could become an instructor. That’s when we realised instruction might be as good a business as DVDs.
Always listen to what your market wants and be ready to pivot.
Zumba is a philosophy, a lifestyle – more happiness, more relaxed. Not ‘no pain, no gain.’ In the end, when I take my picture with people, it’s not, ‘Beto, I lost weight.’ It’s ‘Beto, you changed my life.’
Successful brands are ones that speak to their customers on an emotional level. Ask how your brand is able to delight customers. The Zumba difference is shifting focus away from six pack abs and prestige training. Zumba, Pérez explains, was never meant to be a tool for exercise addicts. Rather, it’s for the masses who drag themselves, rep by boring rep, through their gym routines. “Nobody in the fitness industry thinks about these people.” he says.
“Our Zumba instructors create their own classes, incorporating their own choreography as they see fit. We don’t care if students don’t move exactly the way we do, as long as they’re having fun.
This is one of the significant differences between a licence agreement and a franchised business opportunity. How much control and support do you need from a franchisor? Do you want the freedom to do things your own way and leverage off the brand and its own marketing efforts? A licence might be your best route.
“We’ve taken into consideration the different needs of our global market. In the Middle East, marketing material is more modest, while our European markets consistently request fitness and strength training over weight loss.
No market is identical to the next. Be especially careful when expanding to other territories or countries that you’ve done careful market research. Will your brand resonate in the same way it does on home ground? Are there elements that could be offensive to the new market? Does the market you’re planning on entering have the same needs as the one you’re expanding from?
- In August 2014, over 8 000 Zumba instructors paid $399 to attend an instructors convention. That amounts to $3,2 million. It’s workout clothes line also sold 3,2 million units in 2012.
- Zumba Fitness grew by
4 000% from 2007 to 2010 and by another 750% up to 2013.
- Zumba classes are everywhere. Even in the Pentagon.
- Instructors pay on average $250 to be licensed. Up to 90% of them then sign up for ZIN for $30 a month which gets them CDs and DVDs of new music and choreography, marketing collateral, website hosting, educational videos and access to a global online network.