Runtastic disrupts personal health and lifestyle market with data-driven marketing

Shifting marketing and communication to a holistic customer approach led by ‘why’, not ‘what’, is what’s needed in today’s disruptive and evolving health and fitness industry, according to Runtastic CMO, Stephanie Peterson.

“There is a shift from sales, and getting people in the door with a one-off sale, to a relationship model or a subscription,” she told attendees at the ADMA Global Forum. “We need to use data to our advantage and to best serve our consumers.”

Data-driven marketing is the quintessential element, but Peterson warned companies not to lose sight of the people. “We shouldn’t lose the people and the emotions and everything that is most critical. We need to use our data to do meaningful things for our users,” she said.

Peterson said people-first marketing is one of the major pillars behind Runtastic’s success. The Austrian-based company, which was founded six years ago, has grown from four employees to 175 staff across four global offices.

“This means people in terms of your users, your perspective users, your team in-house, as well as your industry contacts and partners,” she said. “If you don’t put people first, you’re not going to win. That’s our attitude. That’s our experience.”

Runtastic today has 180 million downloads, 90 million registered users and more than 18 apps. Acquired by Adidas in August 2015 for US$240 million, the company’s commercial model includes premium subscription revenue, advertising, hardware (including wearables devices), and B2B sales.

Peterson revealed several successful marketing steps the company has implemented in its push away from a product-driven focus in order to “put the customer in the centre of everything”. The first was changing the nature of digital communications.

“Early on in our newsletter and social media communication, we were really ego-driven. We were excited and young and saying, ‘look how cool we are. Look at how great our products are’,” she explained. “But we weren’t doing a good job of educating the user on what’s in it for them? How is this helping me live better or achieve my goals?”

Today, the company's marketing efforts focus on why its offerings are meaningful to that individual. As an example, Peterson pointed to the company’s end-user focused content around its new shoe tracking feature, which helps people track the mileage on their shoes so they know when to retire them and avoid injury and achieve goals faster.

Inverting the way traditional marketers connected with people in the past, Peterson said today's marketing and advertising campaigns need to focus on the ‘why’, followed by the how’ and the ‘‘what’.

“It is about the story. It is about what gets people going. It is about what inspired them, and the product is just a way to help them identify with your brand,” she claimed.

“Don’t focus on the what: The product. People aren’t blind. They are going to see what you’re putting out there. Start with the why. Tell them why what you are doing is important. Tell them why what you’re doing is going to make a difference in their lives.”

Peterson said Runtastic has also had to shift from “reach to engagement” over the last few years in order to find success.

“It is all about commitment. It is like you are in a relationship. It pays homage and respects your users in the sense that you are saying, ‘You have a lot of choices and I want that every single month and every single year, you choose to stick with me’,” she said. “It also has great monetary benefits for your company - if you’re doing it well. And it means the sale is just the beginning, not the end point.”

The concept of user journeys are also important, Peterson said, and she advised companies to get familiar with tools such as CRM.

“If you are able to scale your business, and get in touch with hundreds of thousands or millions of people, these are the tools that you can use to really optimise your conversion rates,” she said. “This is in-app messaging, push notifications, email marketing - using all of these things in an interconnected way to make sure you are messaging your users with the right message, the right medium at the right moment.”

For example, when Runtastic launched its results app in 2015, the marketing team successfully launched a user journey in 18 languages with 175 unique messages.

“We wanted people to download the app, to register and wanted them to upgrade to a subscription, do a fitness test and actually start their 12-week plan,” Peterson said.

“Nurture connections with your people. Remain or become agile and remember that less is more. The whole point of user journeys, CRM and optimisation is that the less I talk with you, but the more about the things that actually interest you, the more likely I am going to make you happy. To feel like I know you and feel like I care about you - that’s what it’s about at the end of the day.”

Runtastic co-founder and CEO, Florian Gschwandtner, said “putting people first” is also vital to maintaining and nurturing a strong company culture, while also noting the role of data in achieving this strategy.

“We think the product shouldn’t be in the centre - it should be all about people and let’s empower people. That’s why we put the user and data in the middle of our strategy,” he said.

Gschwandtner said the $61 billion health and fitness industry is undergoing massive disruption from the evolution of services, the advent of wearable devices and the rollout of mobile apps, essentially giving users personal trainers in their pockets.

“We have to continuously change our industry,” he said. “One of the most important things is the data. In the past, we collected data.

“We can use the data we do have to predict your future. And if we can make that happen, we will make you a great and happy customer, and probably a new brand ambassador.”

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