Exclusive Relationships


Have you considered the exclusivity of your relationships?

This follows on from the post regarding the value of the data and the priority attached to the relationship or the data. I want to further explore the value of the relationship and shine some light on a different approach.

The Scenario

It’s the same scenario as the previous article, imagine you’re in a store, purchasing a product and you’re asked for your email address. How do you respond? Do you have a default answer? When was the last time you chose a different response and what prompted that change?



Depending on how you value your time, how you value access to your time (and distractions) such as providing your email or how you value the privacy of your email address, you’ll respond differently to the request. All of these are currency that can be traded:

  1. Your time
  2. Access to your time – this is different to (1) since it relates to an acknowledgement that there is a route to your time, but you can safeguard it. Whereas (1) is more protective of time as a resource or possession.
  3. The privacy of your email address

These can be traded for items in the following non-exhaustive list:

  1. Discounts – immediately applied
  2. Discounts – off future purchases
  3. A free product/service
  4. Entry to a competition
  5. An item/service that others don’t have access to

The one I’m interested in exploring further is 5.

Different Perspectives


Let’s consider two ways of thinking:

  1. A company asking customers for email addresses so they can email them once a week with slightly reduced clothing that the company wants to sell before it has to sell in bulk to a discounter, so that it can clear space for the new season’s stock.
  2. The concept of fashion store charging for admission, maintaining exclusivity and ensuring that the experience warrants charging for entry.

That first option is the one followed by the majority of companies. We have to question, just how big a financial incentive is required to gain valuable email addresses/contact details. After all, we primarily want to focus on those people who are most likely to buy. More than that, we want to focus on those that we can convince to buy more than they would have done. It’s a balance between offering enough to get people interested but to keep the discount percentage low enough you’re not losing out. Isn’t this the attitude of 95% of retail companies? But it doesn’t feel an equal relationship. We’ll continue to explore the impact on emails, but recognise that there are other, more modern and interactive channels available as well.

That second option introduces another concept that alters the relationship. It focusses on entertaining the customer, providing a valuable experience that the customer would pay for.

Now let’s extrapolate that further by using the same principles.

Can we develop a mailing list that people would pay to be on?

What would we have to offer that customer in order for them to want to pay to access it?

Following the fashion store concept from above, exclusivity is the angle. That fits (5) as above. Instead of a situation where the item of value is the email address and we request that item so we can use it as the channel to contact the customer/prospect, we end up with a situation where the email address becomes the channel but is offered to us (potentially along with payment) so that the customer can access the list. The relationship is reversed.

Nightclubs, restaurants and social clubs/business clubs have been using exclusivity for decades (and centuries in some cases). This isn’t new. Before email, there were postal lists you could pay to be on. Again, this isn’t new.

That relationship reversal then implies one of two choices:

  1. We provide a service centred on exclusivity and customers will pay to access that service via an email list. But the service/product is what they want access to. Or
  2. We provide a service that is in the email content itself. And customers pay to receive that email.

The first is similar to exclusive wine clubs, members clubs, etc. The channel isn’t important, it’s the end product that counts. There’s little value to the email itself; it’s a conduit or an access channel to the product. Some of the crowd-funding platforms such as Kickstarter blend the mass-market with the exclusive by restricting access to early adopters or sponsors.

The second is interesting because it would have to be a information-only service since it’s delivered over email. We’re then left with the question of what content could be provided with a degree of exclusivity and create a demand from prospects? For that, we can look to previous centuries (and the current century and stock market information). The value is in the effort, skill and knowledge involved in the financial analysis that isn’t in the email. Part of the perceived value is in the brand and reputation. Hence the existence of con artists creating ponzi schemes on the back of fabricated or incremental reputations.


We’ve covered the concepts of the items of value that a potential consumer could be traded, the items that they could be traded for, explored the idea of creating a chargeable service and how exclusivity could apply to that service.

Where does that leave us?

We could create exclusivity in our relationship with customers by restricting the size of the segment (e.g. first 100), we could offer that email for a cost, we could create a difference in the products/services specific to the segment or we could create an exclusive product where the channel communication itself is the product.

New Year, New Gym, New Business Model

Direction of Travel for Gym Business Models

The business of gyms is an odd one. It’s full of business principles from the 1970s with a thin veneer of customer service from the 1990s.

What’s the modern approach?

Let’s look at the typical issues with modern gym memberships. If you search on a few review sites or social media, you’ll commonly see a number of prospects who turned their back on transitioning to customers mixed with disgruntled customers. From a cursory glance, there are significantly more unhappy customers than happy customers and the gap between is wider than in any other industry that I can think of.

So what’s the reason behind this? I think it could be due to gym managers and owners applying the wrong business model.

The Continuum

From a very simplistic viewpoint, we can fit products onto a continuum from commodities, feature-based through to bespoke.

Feature Continuum
Feature Continuum


A commodity is the same wherever you buy it from. It’s not different if you buy from a or b, the same experience applies. In the end, you’ll own the same product.


Moving from commodities, we encounter feature-based products. Here the differentiator is the set of features on offer. This is where we start to introduce concepts of value in relation to the features provided. Some features cost more than others, but in the end we’re buying features, so we’ll try to choose the features we want, or at least those that we think we want. On the other side of the negotiation, we see salespeople selling features or solutions to problems or issues.

Further up the continuum and we move to customisations, where we can take a feature-based product and have it customised to our needs. The cost is a combination of the product, the features, the customisation and the perceived value of the brand.

At the far end of the continuum from where we started are the bespoke products. These are developed from scratch to meet our requirements.

Service Quality

We can also introduce the concept of service quality. This could range from no service (e.g. simple automation with no choices), through a service wrapper to complete bespoke services.

Features vs Service Quality
Features vs Service Quality

Depending on the offer, we may have to take into account the total cost of the purchase (e.g. including the transaction fees, shipping, etc). So the differentiator becomes how cheaply, quickly we can receive the product and how much we’re prepared to pay for the total combination.

Moving further along, we encounter products that are becoming commoditised, i.e. the same product, but the differentiator could be the service wrapped around that product. This is where we start to see our perception of the brand in how it will look after us if something goes wrong with the purchase.

Customised products, by necessity of the interaction involved, include a higher level of service quality than the pure commodity products.

Where do gyms fit in?

Depending on the gym chain, they may have a sales and service model for the wrong type of product being offered.

Position of current gym business models
Position of current gym business models

Gyms as a whole tend to be following a sector-agnostic trend of delivering cheap as cheaply and simply as possible or selling quality as expensive. But there is confusion in the industry. There are a number of chains who don’t seem to have decided on their position. We see that by how they respond to complaints, by how well they maintain equipment, by how smooth they make the enrolment process, etc. In other words, they’re branding themselves as quality, but not following up on the offer. Customers and prospects are beginning to notice this. More importantly, with the advent of more pervasive social media and review sites, their opinions are more public and wider-reaching than at any time before. This will impact the pricing model, since it will become more difficult for a gym chain to obfuscate pricing per customer.

At the higher end of the chain,we see that expensive gyms hide the pricing structure which is indicative of bespoke services and possibly higher-end customisation. But neither of those attributes ever apply. At most, a gym is feature-based. So we find ourselves in an odd mix of worlds, where:

  • the monthly cost is expensive or very expensive (depending on how good your haggling skills were) considering the feature-based angle,
  • the sales approach is based on selling bespoke products
  • prices are hidden
  • the salespeople are usually too junior/low paid if a gym for selling bespoke services (but probably appropriately paid when we consider it’s a feature-based or commoditised-product sale)
  • customer service, whether as resolution of complaints or, more importantly, how customers are treated in terms of contracts, doesn’t reflect the levels we’d expect of bespoke dealers

If we relate this the world of cars, we could consider the lower-end of the market as the Škoda – perfectly good cars, made for a cheaper segment with fewer features than in more expensive cars. The higher end would be comparable to the more expensive Audis or Lexus. That also leaves room at the extremes, e.g. for Bentley and Rolls Royce at the top end. For each of those car companies, there’s a different sales method. We’d expect to see the salespeople on different packages. Similarly prices are more transparent at the lower end of the market.

Let’s put this back together.

If we take a lesson from car brands, combine with the industry-agnostic trend, we end up with a split:


  • Transparent pricing
  • either commoditised-product or feature-based product
  • implying limited features (think of the basic features from a Kano model)
  • simple sales, maybe even automated


  • Transparent pricing, more expensive than low-end
  • simple sales, more likely to be human, but still a simple process
  • better features
  • better customer service


  • Different pricing model
  • Scarcity, e.g. limited memberships
  • bespoke features
  • immaculate customer service
Loci for Future Gym Business Models
Loci for Future Gym Business Models

Looking at it from this angle, we see that there are gyms which attempt to avoid the low-end of the market, but are not at the exclusive end. But they don’t fit comfortably in the Feature-plenty. Bear in mind that Audis, Lexus and Škodas are still bought on a combination of features and brand. They’re still cars that you can order online. If you can’t find one local, you can simply find one somewhere. We can’t say that to the same extent for Bentley or Rolls Royce.

In most industries, we may be able to predict congruence with the trend, however the gym industry seems based on 1970s principles and exhibits a complete inertia to listening to customers, let alone delivering what customers want.

In the UK, we’re seeing more budget-brand gyms following the Basic model above. Prices are listed online and with fewer surprises or secret, it permits an automated sales process. Even so, they’re still applying joining fees rather than increasing the monthly fee by a small amount. Although that may be because the memberships gyms are already priced at triggering amounts, e.g. £14.99 + a £25 joining fee sounds better than £17 per month.

We also see very exclusive gyms with limited memberships, exorbitant monthly fees and joining fees, but catering to those that can afford it and those that want to be seen in the places to be.

Unfortunately the middle ground is badly managed. If they remain as they are, with the same customer-unfriendly practices, they will lose customers to the better basic gyms. This will become more prevalent as the basic gyms continue to reinvent what a gym means, by adding better customer service and as the basic gyms increase their offer by heading towards the feature-plenty model described above. Some of the customers will move to the truly exclusive gyms.

Direction of Travel for Gym Business Models
Direction of Travel for Gym Business Models

To counter this, those middle ground gyms will have to change. They can choose to be Basic, Feature-Plenty or Exclusive. Whichever is chosen, all 3 options require change.

At first glance, Feature-plenty appears to be easiest since they’re already charging more than Basic gyms, providing more features for that charge, but it would require a wholesale change in customer experience, from the sales process, on boarding, through to day-to-day experience, resolution of issues and membership retirement. That may look like a lower profit but there are enough case studies proving that focussing on the customer experience results in higher profit.

The change to Exclusive may be better done with a rebrand. Keeping the same brand will not carry the same perceived value regardless of what is done to the chain, at least not in sufficient time frame to prove return-on-investment.

The change to Basic may not be feasible for all the middle ground gyms due to the size of gym involved. The Basic gyms are typically smaller than the middle ground gyms. That’s possibly because they don’t rely on numerous features and so don’t need as much space to accommodate those extra features. Or it could be a attribute of the building costs, i.e. simpler to find a smaller space than a larger space suitable for a gym.


The Value Affix – Xtech and Why I’m Fed Up with Tech part 2


I wrote in the previous article that we don’t need a separate xtech for any given sector x.

Abstracting further, the focus should be on the customer, not the technology.

We see healthtech, fintech and insuretech which indicate the use of new technologies to improve existing or introduce new business models. But technology is just one factor that could be changed.

Historic changes to business models

Instead we could be changing other elements of the business model.

We’ve already seen the changes introduced during the shift from bricks-and-mortar to online. We stuck an “e-” at the beginning of everything. If it’s Apple-related, maybe an “i”.

We saw segmentation and stuck a CRM at the end of it. And I still chuckle from hearing a supplier introduce “farmerCRM” at the time. In that room, we had all misheard PharmaCRM which made more sense consider the state of the market, although nowadays farmerCRM or more formally agriCRM has enough market presence.

Sometimes we did both and added an “e” and a “CRM”, e.g. ePharmaCRM. Although that was more a proposition from one company than an industry concept.

Then organisations started to realise that not every customer type was the same, so we removed the ‘C’ out of CRM and replaced it with ‘P’ for Partner, ‘E’ for Employee, “G” for Government, etc. Fortunately that died out and we are left with CRM for any type of customer.

We looked at how the channels were being managed and ended up with B2B, B2C, P2P, G2C and so on.

Moreover, some brand names have become synonymous with the elements of the business model they’ve changed.

Think cheap, put an “easy” at the front

Think everything related in one place, put an “rUs” at the end (although at the time of writing, maybe that should be Chapter11RUs?)

And we can continue with the other elements of business models looking for the affixes that denote what’s being changed. Unfortunately, we can also use those affixes to misdirect prospects by indicating that we’ve changed but we haven’t, instead we’ve just stuck an “e” at the front because everyone else does.

Focus on the Customer

Whatever element we’re changing, the focus should always be the customer, or rather, how to deliver more value to the customer.

Based on that concept, should we also see healthvalue, finvalue, insurevalue, etc? However similar to the tech suffix mentioned in the previous article and how techtech is absurb, adding value as a suffix also sounds absurd, but for different reasons.

1) The word “value” is being hijacked

The word “value” has become a euphemism for cheap and a synonym for budget, e.g. “you’ll want our value model” meaning “cheap model” or “budget model”. The word has been hijacked by brands not wanting to admit to customers that it’s a cheaper, inferior product to what they could have bought. I remember returning a drill a few years ago because my house broke it. The clutch on the drill had not coped well with the dense bricks and so the drill had stopped working. I returned the drill to be asked “what did you expect? That’s a value drill.”

On one hand, when viewed as value=cheap. That’s just on the edge of being an acceptable response, but should be followed up with how they can help me.

On the other hand, when viewed as value=worth of good received for total cost (money, time, effort) of transaction, then it implies that every other model of drill in that shop doesn’t provide value to the customer. We can then infer, from using the word as commonly defined in the dictionary, that I had obviously bought the right one for me as it was the only one that provided value.

However, in the parlance of that brand, and many other brands, I’d bought a cheap, inferior product. So we’d have to question whether value is the most appropriate term.

2) It’s all just improvement

By affixing a suffix, we lose sight of what we’re trying to achieve. We allow ourselves to abstract from the domain and the problem at hand, and immediately focus on our solution to resolve that problem. That’s definitely the case for the “-tech” suffix or the ‘e’ prefix. By adding -tech, we’re implying that our solution is tech and it will resolve the issues in that sector or allow us to expand into that market. However there may be more appropriate solutions than tech, so we shouldn’t be constrained by that.  Interestingly, the “-value” suffix doesn’t constrain us in that way, so maybe it is suitable after all.

But we still must be aware that what we’re trying to do with every initiative is to improve. It’s either improve our marketshare (and investor returns), improve our efficiency (and hence profits), improve the life of our customers or some combination thereof. Even if we’re innovating or inventing to get to that point, it’s still an aim to improve the position.


So instead of creating yet more hyped portmanteaus, can we simply stick with the original sectors?

Instead of saying you’re in Fintech, say you’re in Finance and you’re increasing the value you provide to customers everyday. You may do that through technology or you may do that by improving the partnership relations. Or probably both. But it’s still Finance.


Since I started writing this article, I began to formulate a 3rd article in the series.

xTech – Part 1 – Why I’m fed up with tech


xtech for Sector x

  • Fintech is challenging the Finance sector
  • Insurtech is challenging the Insurance sector
  • Healthtech is challenging the Health sector
  • Will we see Techtech challenging the Tech sector?

And since new technology is developed every month and every year, would we be looking at a Techtechtech sector in a decade?

It’s seems ludicrous to think of it that way and it is indeed ludicrous. The reason it sounds so odd to have a Techtech sector is that we’re allowing ourselves to be focussed on the technology that’s enabling us to replace the older business models.


If you get a nice interface to your banking account and that bank account has a different charging model to the older high street banks, does that make it fintech? According to the hyped world, then yes. But it’s stilll banking. It’s still finance. In reality, the newer entrants are just doing what the incumbents should have been investing in more heavily a few years ago.

In some cases, newer entrants who are smaller are working out how to make a profit without the expectations of having to pay the large salaries of traditional banking, without having to pay large, multiyear leases for high street premises, etc. The main lever they’re using is initially technology, but sometimes it’s other elements of the business model that are being altered. That’s a critical point to realise; it’s not always the technology that is being used as a lever for change.

Customer Channels

Let’s take the example of First Direct, the HSBC bank that had no high street branches and regularly received excellent customer satisfactions scores compared to its high-street cousins. Mint, Smile and Egg all followed with variants of similar business models. They had changed one element of the business model. They had focussed on the channel of interaction, forcing a channel shift from face-to-face to telephone (at the time) and online (later when the technology caught up). Everything else (apart from perhaps some of the branding/marketing) was the same as the high-street.

Business Models

What we’re seeing now is other entrants prepared to look at other components of the business model, such as where the revenue is generated (e.g. subscription versus visible transaction vs bundled transaction cost vs bundled products and so on).

Here’s a simple concept: Take the Business Model Canvas and apply SCAMPER to each section. It’s that easy to generate new ideas and that’s what seems to be happening in every sector.

But this isn’t really fintech. Yes, tech is opening up opportunities and provides the ability to change different elements of the business model that would have been more awkward or at least not cost-effective to change before. But, again, it’s still banking. So let’s just call it finance. The big question for incumbent banks is, rather than relying on their current business working in the future, they’ll have to accept that different models will emerge. And it’s their choice if they want to be delivering those models, enabling others to deliver them on their behalf, or simply be swept away as their market share is eroded by competitors.


Let’s get this straight. I’m not against the concept of Fintech. I’m against the fact that the concept exists separate to the Finance sector (or rather a subset of it). I believe that every sector has a duty to innovate, improve and invent. For sector x, we don’t need xtech.

  • There’s an additional angle to this which I’ll cover in the next article.