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How we helped Centrum Respo grow by 60% and surpass the most optimistic prediction

by
Krzysztof (Kris) Szyszkiewicz
in
Head of Delivery, Partner
August 10, 2023

Client

Centrum Respo is a company that offers online dietary and exercise programs and consultations for people who want to lose weight and live healthier lives. The service is based on the Respo method designed by dr Michał Wrzosek, one of the company’s founders.

The initial plan was to hire the Valueships team to help with pricing transformation, but soon after we started, we knew we were in good hands, so the partnership extended to business reporting and analyses. What is the most important for us? The Valueships team ideally takes the initiative. Our cooperation isn't based on "we will give you some tasks, and you should do it" but on their initiative. They observe us from perspective, and after that, they give us ideas & insights to boost our business growth. We were thoroughly impressed by their professional approach, dedication and more than happy with outstanding results, so after the project, we decided to hire Valueships team as strategic advisors.

Michał Wrzosek, Co-Founder & CEO Centrum Respo, Paweł Witkowski Co-Founder | COO | CTO Centrum Respo

Situation

Michał and his co-founder Paweł were proud of the project, especially given the impressive results. Since it was launched, Centrum Respo has helped over 20,000 people reach their fitness goals.

It certainly was a success. But at the same time, they felt that their model wasn’t perfect, there was value / price misalignment that impacted both Clients and the Company.

Goal

With consistent results and tons of positive feedback, the Centrum Respo team knew that they provided immense value with their service. Slowly but surely, they started realizing that the price didn’t reflect that value, and they decided that a new pricing based on that value had to be created. Also there was no expansion revenue options, and clients did not have a chance to use the whole service suite by their request

Since it was quite the challenge, Centrum Respo decided to reach out to value pricing experts (that would be us) to pair-up and together tackle the issue.

Approach

We started with the necessary leg work, which is gathering all the relevant data to better understand finances and customer lifecycle. We knew that a significant price transformation was a certainty, so we had to understand how customers were using the service until that moment.

But the most important part was an extensive survey on a large group of people who were previously on a diet or were interested in weight loss, as well as current clients. The survey touched on many significant aspects, such as:

  • types of diet
  • results
  • reasons why they started and why they gave up
  • what were the criteria when they picked a kind of diet
  • how much were they paying for the diet plan
  • how much were they paying for exercise plans or personal training
  • and more

The information we gathered was fundamental in every step we took afterward. It gave Centum Respo team and us the necessary data and confidence to proceed with the significant changes, including the price and value optimization.

One of the most impactful aspects of the transformation was a major packaging update, including adding one completely new option. Based on the data we gathered, we adjusted each plan to the preferences of different Respo customer segments. As a result, new pricing highlighted the value of each item in the program and aimed to increase the percentage of users that choose more packed (and more advanced) plans.

But perhaps most importantly, we introduced completely new monetization models - the options to purchase add-ons. It enabled customers to create more personalized experiences and became a new source of revenue for our client. 

Secondly, the research gave us a much better understanding of the willingness to pay in terms of the entire service as well as all its separate features and possible add-ons. On top of that, we found out what would be the features that customers would happily pay for that weren’t available at the time. With that information, Centrum Respo could optimize and expand their offer even further. 

We also gave customers more freedom to change their diet plans if they extend or completely change their diet. And finally, we got rid of several items in the plan because we discovered that they weren’t essential for subscribers and didn’t affect the willingness to pay (WTP) in a meaningful way. 

It’s fair to say that the entire project was a quite significant (re)evolution. We changed a lot both in pricing and packaging. And with the fantastic help from the Respo team, we managed to implement all the crucial changes before the end of the year, a time when most people make their New Year’s resolutions to change their habits. 

Last but not least, we can’t say enough about Michał’s and Paweł’s role in the project. Their dedication and leadership played a crucial role in every step of the implementation. 

Results

Before we move on to the results, we need to point out that in every project, we’re trying to estimate the potential outcome of all the proposed changes. We’re always trying to be as accurate as possible, not overly optimistic. But from time to time, we’re not even in the ballpark. 

Centrum Respo is definitely a fast-growing business and the whole growth can’t be attributed to pricing. Nevertheless, after implementing the new pricing rules, Centrum Respo got 60% more revenue over a year on the quartely, even 19% more than in our most optimistic predictions. Pricing changes impacted the company horizontally:

  • New clients started to realize higher revenue by moving from cheapest and short plans to medium and longer plan - we’ve helped to shift more clients towards longer subscriptions while maintaining the same conversion rate, which further helped increase clients’ lifetime.
  • Existing customer downsell reduced from 20% for 8% and increased up-sell by 5%
  • By introducing add-ons, 0.5% of all revenues came from cross-sell - with almost 0 marketing behind it - it became new revenue stream to the company

To sum up:

  • + 60% revenue growth above Q1 predictions (growth +100%)
  • + 19% growth vs. the most optimistic predictions
  • +5% increased upsell
  • -12% decreased downsells
  • Vastly increased percentage of clients choosing longer plans (increased client lifetime)

In addition to the financial results and organizational confidence, we’ve managed to change the way Centrum Respo approaches monetization.

After we finished the project, it became clear to our client’s team that areas like pricing and monetization require much more attention, and there has to be an ongoing, data-based process that ensures a company is on the right track. 

And that’s partially why after the project’s success, Paweł and Michał asked us to participate in the company’s strategic workshops to continue our support. 

P.S.1 

That kind of comment warms our hearts ❤️. This is what two top-notch influencers think about our work.

Source: Michał Sadowski. Facebook.
P.S.2 

If you want to know more about diet and a healthy lifestyle, Michał Wrzosek's social media can give you something you need! 

Quick summary

+60% increased revenue growth

+5% increased upsell

-12% decreased downsells

+ 19% growth vs. the most optimistic predictions

Vastly increased percentage of clients choosing longer plans

Interested in creating a lasting impact for your company, too?

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