Acquisition project | Cult.fit

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Acquisition project | Cult.fit

Product: Cult fit

What is Cult fit?

Criteria	Description
What is Cult.fit?	Cult.fit is a fitness app which lets you book gym sessions, group classes and access online fitness classes
Founding Year	2016
Offering available in	Cult.fit physical centres are available in Metro cities (top 8 cities) and Tier 1 cities. It also offers online fitness classes (both live and async format)
Value proposition	Provide multiple fitness formats (Gym, Group classes in Yoga, Strength training, Zumba, Boxing) Offer goal based program targeted at losing weight, becoming a Yoga practioner
Current scale	FY 23 revenue: INR 700 Cr for the group. INR 445 Cr from fitness subscriptions (product being focussed on)
Competition	Cult does not have a like to like competitor. However, fitness chains such as Fitness first, local gym chains, freelance trainers (both online and offline) are the nearest competitors
App downloads and ratings	10 M+ downloads, 4.1 on playstore (114 K reviews)

While Cult.fit is a house of brands, the focus of this document is limited to fitness classes (physical and online) product which is Cult.fit's core offering

Revenue model

Cult Fit operates on a subscription-based model, offering unlimited access to fitness classes and training sessions at their gyms and online through their app. They also offer additional services like personal training and nutrition coaching at an extra cost.

Ideal customer profile

	ICP 1	ICP 2	ICP 3	ICP 4
ICP Name	Digital Dynamos	Corporate achievers	Enthu college kids	Tier 2 juntaa
Who are they?	Young working professionals	Leadership positions in startups and corporates, housewives	Students	Business owners, house wives
Age	24-35	35-50	16-22	30- 45
Gender	Any	Any	Any	Any
Location	Metro and Tier 1 like Mumbai, Bengaluru, Jaipur	Metro and Tier 1 cities like Mumbai, Bengaluru	Metro and Tier 1 cities like Mumbai, Bengaluru	Tier 2+ cities
Who do you live with	Friends	Spouse and kids	Family or friends	Family
Occupation	SDE, PMs, Growth managers, Analysts	Director, VP, Entrepreneur	High school, college grads	Business owners
Income levels	10-30 LPA	>30 LPA	<5 LPA	10-50 LPA
Where do they spend time?	Offices, dining out, social media, travel, shopping apps	Offices, community events, shopping apps	College, social events, social media	Social gatherings, social media
Apps they use (Partner integration)	Zepto, Youtube, Myntra, Instagram	Twitter, Big basket, Whatsapp, OTT apps	Instagram, Youtube, Spotify, OTT apps	Whatsapp, Youtube, Facebook, Flipkart
Fitness level	Moderate to high	Low to moderate	Moderate to high	Low to moderate
Frequency of doing fitness activities (per week)	3-5 times	1-3 times	3-5 times	0-3 times
Form factor	Mostly physical, sometimes online	Mix of physical and online	Mostly physical, sometimes online	Mostly online
Pain points	Lack of time, motivation	Motivation, high stress levels	Affordability	Lack of gyms, group classes in their location
Goals they want to achieve from fitness	Looking good, social image	Maintain a healthy life style, stress management	Build muscle, good looks	Weight and disease management
Fitness apps / gadgets they use apart from Cult	Strava, Nike run, mid range smartwatch	HealthifyMe, Playo, apple watch	Free ver of fitness apps	Meditation apps, zoom for yoga sessions
Influencers	Fitness influencers on social, their friends and colleagues	Colleagues, spouse	Fitness influencers, friends	Their children, friends
Blockers	Time constraint, unavailability of classes	Time constraint,	Money constraint	Lack of physical centres

Ideal customer profile prioritisation

On a scale of 1-5

Parameter	ICP 1 (Digital dynamos)	ICP 2 (Corporate achievers)	ICP 3 (Enthu college kids)	ICP 4 (Tier 2 ki juntaa)
Adoption curve	5 (want a one stop solution to fitness)	4 (high willingness to be consistent)	5 (want to look good and build muscle)	3 (getting aware about benefits of regular fitness)
Frequency of use case	4 (regular)	3 (time constraint)	5 (most regular)	3
Appetite to pay	5 (High income)	5 (High income)	1 (depends on parents for pocket money / low income)	4
TAM potential	4	4	5	5
Ease of distribution	5	5	4	3 (distribution is a challenge currently)

Based on the above priortisation framework, ICP 1 and 2 are our primary ICPs. They exhibit higher adoption and frequency of Cult's product. With higher appetite to pay, large TAM and easy to serve, we will focus on these 2 ICPs to design acquisition channel strategy.

Market size for Cult

Screenshot 2024-06-08 at 6.16.11 PM.png

Cult has 10 Mn playstore downloads. Assuming 2-3 Mn app store downloads, Cult has captured 40% of the SOM.

We are not doing a value based market analysis here and limiting it to number of users Cult can onboard.

Competitor understanding

Healthify Me: Competes with cult in live workouts and tracking of your fitness activities
Home workout apps: Competes with cult in live fitness sessions
Local gym chains: Chains like fitness first, Fluid fitness, Ozone etc.

Product positioning:

Cult.fit stands out in the fitness landscape with its unparalleled brand presence and standardized offerings. As a one-stop solution for all fitness needs, Cult.fit uniquely offers multiple workout formats under one roof, from yoga and dance to strength training and HIIT. Unlike others, where you'd need to join multiple centers to access various formats, Cult.fit provides it all in one place, ensuring a consistent and high-quality experience across all platforms

Cult clearly is in mature scaling stage and hence we will now jump onto pick 2 channels and make a strategy to double down on these 2 channels.

Channel decision framework

Possible channels	Effort	CAC (Cost)	Flexibility	Lead time (Time)	TAM (Scale)
SEO	High	High	Med	High	Very High ✅
Content loop on Insta, YT	High	Low ✅	Med	High	High ✅
Influencer marketing	High	High	High ✅	Med✅	High ✅
Paid Ads	Med ✅	High	High ✅	Low ✅	High ✅
Referral	Med ✅	Low ✅	High ✅	Med ✅	Med ✅
Partner integration	High	Med ✅	Low	Med ✅	Med

Based on the above priortization framework, we will choose Paid Ads and Referral as channels to double down on.

Secondary research : Paid Ads is also the biggest lever of growth for cult currently

Growth Manager at Cult

Paid Ads

Step 1: We will make Ad strategy for ICP 1 (Digital Dynamos)

Channel priortization

	Google	Facebook	Instagram
Time spent	Low	Low	High ✅
Effort	Med	Med	High (as reels and stories require sophisticated creatives)
Cost of channel	High	Med ✅	High
Expected CTR	High ✅	Low	Med ✅

As our ICP primarily spends time on Instagram (an average adult in India in metro in 18-30 age group) spends 1.5-2 hrs on Instagram, we will chose Instagram as our preferred channel to run Ads.

LTV/CAC calculation for Instagram Ads:

CAC for a user on cult acquired through Instagram channel:

Cult has 1.2 M organic followers on Instagram.

Instagram- assuming we spend 1 Cr on Insta ads
Instagram	12 Months	Remarks
Budget	1,00,00,000
CPM	400	Cost per 1000 impressions is roughly 5 USD for fitness products on meta platform
Impressions	2,50,00,000
CTR	1%	Basis conversations with people who specialise on Meta Ads. CTR 1-1.5%
Number of Clicks/App Store Visits	2,50,000
App Installs and signup - 10%	25,000	10% people sign up on the app post installation
Install to paid - 7.5%	2500	Assumption. 10% convert to paid users
CAC	4000	CAC for a typical customer

ARPU of a customer on cult will depend upon the type of product he subscribes to

Product	Price for year	Mix
Elite	15000	50%
Pro	12000	30%
Live	4000	20%

ARPU becomes ~12000. Considerign a lifetime of 3 year for user,

LTV becomes 12000* Retention rate for 2nd year* Retention for 3rd year

Assume retention to be @ ~40% for second year and 70% for third year (higher retention if you are already with the platform for two years)

=12000 x 1.68 = ~20000

Giving us a healthy LTV / CAC of 5.

Given we are at a healthy LTV/CAC of 5, the idea would be to grow the channel in terms of "Volume" as we have only captured 33% of the SOM.

Further, most of our users are unpaid users, we should run targeted campaigns to monetise them. Since, this project is about acquisiton, we have not delved into the monetisation bit.

Creative strategy

Elevator Pitch

Whether it's yoga, dance, or strength training, Cult.fit has you covered. With our expert trainers and diverse workout options, you can achieve your fitness goals anywhere. Plus, you can create your own fitness groups for added motivation. How cool is that?

Campaign 1: Static Image Ad

Ad Concept: Highlighting the variety of workouts and the community aspect of Cult.fit.

Visual Elements:

Image: Split image showing three different workouts (Yoga, Dance, Strength Training).

Screenshot 2024-06-08 at 6.00.00 PM.png

Text Overlay: "Whatever your fitness style, we’ve got you covered!"
Call to Action (CTA): "Join Cult.fit today and start your journey!"
- CTA is a button. On clicking the button, the user is taken to playstore/ appstore to download the cult app

Caption on Instagram

"From Yoga to Dance to Strength Training, Cult.fit offers it all. Create your own fitness group and stay motivated with our expert trainers and community support. Ready to transform your fitness journey? #FitnessGoals #CultFit #JoinNow"

Campaign 2: Video reel on Instagram

Ad Concept: Showcasing the dynamic and fun environment of Cult.fit with a focus on creating fitness groups.

Caption:

"Find your perfect workout, create your own fitness group, and stay motivated with Cult.fit! Whether it's Yoga, Dance, or Strength Training, we have everything you need. How cool is that? #FitnessCommunity #CultFit #JoinNow"

You can see the video script whimsical here

Referral channel:

Current referral flow for Cult has loads of issues.

Discovery: Finding the referral screen is difficult for users. Cult also does not notify or promote the referral program on the app
Sharing options: Only whatsapp sharing available
Tiered rewards: Cult offers the same reward of 1 month membership extension irrespective of how many users you refer
No referral tracking: No referral tracking available in the cult app ecosystem

Now that we have identified the problems, we will suggest solutions for the same below. Due to lack of time, wireframes are not attached.

What do users brag about Cult: To begin with, the Bragworthy Proposition of Cult is you can track and share your fitness progress.

ICP Prioritisation: I will be focussing only on ICP 1 (Digital Dynamos) who uses the app frequently

Step 1 & 2: Who Will I Ask for a Referral? How Will They Discover the Referral Screen?

Who to Ask:

Digital Dynamos, who are tech-savvy professionals using the Cult app frequently.
Users who have shown high engagement with the app, including booking classes, tracking workouts, and sharing progress.

Discovery Method:

In-App Notifications: Utilize push notifications within the app to inform users about the referral program.
Email Campaigns: Send personalized emails to active users highlighting the benefits of referring friends.
Social Media Announcements: Post on Cult’s social media channels to reach engaged followers.
Post-Workout Pop-ups: After completing a workout, prompt users with a referral message.

Step 3: Why Will They Share the Referral?

Platform Currency:

Reward: Offer tangible rewards such as free membership extensions, discounts on future purchases. Or access to cult special events.

Since renewal depends on how frequently you use the platform, we can chose membership extension as our platform currency.

Bragworthy Proposition: Emphasize the ability to track and share fitness progress, showcasing their commitment and achievements to friends.

How Will They Share:

WhatsApp Sharing: Simplify the process to share referral links directly via WhatsApp.
Social Media: Enable easy sharing on platforms like LinkedIn, Twitter, and Instagram, where Digital Dynamos are active.
Email Invitations: Provide a pre-written email template for users to send to friends.

Currently cult only has whatsapp sharing, while whatsapp is surely the most prominent channel. There should be an option to copy your link and send it through any platform to ensure no dropoffs at this stage.

Screenshot_2024-06-08-14-21-09-38_d6db237559c61f56f14f02ae5436fda4.jpg

Step 4: Tracking the Referrals

Referral Dashboard: Create a dedicated section in the app where users can track the status of their referrals.
Notification Updates: Send push notifications to inform users about the progress of their referrals (e.g., when a friend signs up or makes a purchase).
Email Summaries: Weekly email summaries to users showing the impact of their referrals, including rewards earned.

Step 5: Why Will They Keep Referring?

Continuous Rewards: Implement a tiered reward system where users earn bigger rewards for more referrals.
Community Recognition: Highlight top referrers in the app and on social media, giving them recognition within the Cult community.
Exclusive Content: Provide access to exclusive workouts or early access to new features for active referrers.
Feedback Loop: Regularly update users on how their referrals are helping friends achieve their fitness goals, creating a sense of accomplishment and motivation to keep referring.