• 20 hours
  • Hard

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Last updated on 10/26/21

Build a decision model of a fitness club (study case)

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Evaluated skills

  • Identify revenue structure for an enterprise
  • Model a market campaign
  • Model various elements of an enterprise using a dataset

Description

Hi everybody,

Congratulation, you just completed the first part of this course. In order to validate it, you will complete the following Quiz. The learning objective of this quiz is to confirm your ability to put into action the various method for modeling the customer recruitment process. Please note that your answer to the first question will impact the remainder of the Quiz, so take as much time as you need.

 

From the business case below, you will build step by step the subscription model of a fitness center, based on :

  • The marketing campaign
  • The conversion rate
  • The churn rate
     

From there, you can start answering the questions below.

Good Luck!

 

  • Question 1

    STEP 1 : Identify the structure of the revenue model for this Fitness Center

    Among the 3 classes of models that we described during this course, which one (or which ones) would best fit to describe the revenue dynamic of the Fitness Center ?

    • It’s a short life cycle business: going to a Fitness Center is something that is supposed to be frequent and regular.

    • It is a long life cycle business: the sales model is the one of a subscription, that represents a 12 month commitment.

    • This is a viral model, as word of mouth, peer recommendations, sponsorship are key drivers for developping the sales of a Fitness Center.

  • Question 2

    STEP 2 : Model the marketing campaign to recruit the 1ers customers

    The sales process that we’re going to model is the following:

    1. Direct promotion through flyer distribution, in the neighborhood of the Fitness Center
    2. Incoming flow of visitors, there to see the place
    3. Decision ou or not to subscribe
       

    The impact of flyer distribution is captured as follows :

    • Visit Rate (from Flyer distribution): 2%
    • Spread over 2 month following distribution
       

    Starting from the hypothesis that we distribute 2000 flyers for the first 4 months, calculate in the Excel template that you downloaded, the flow of first time visitors created by this flyer distribution during the first 12 months, et identify the right result among the various responses below.  

  • Question 3

    STEP 3 : Model the conversion rate visitors / subscribers

    We will assume for this question that our flow of prime visitors is :

    Month 1 40
    Month 2 40
    Month 3 40
    Month 4 40
    Month 5

    20


    Working on the hypothesis that 70% of first time visitors will indeed sign up for a 12 month subscription during their visit, model the flow of new subscription from this flow of prime visitors. Among the following responses, which one is correct ?