Consumer Services

Overview

In the face of shifting generational preferences as well as both geographic and at-home competition, the ability of consumer services providers to stay on top of customer needs and assess the potential for growth is more important than ever before.

L.E.K. is an expert advisor in the consumer services arena, supporting location-based companies such as fitness centers/gyms, salons, massage clinics, weight management centers and more. We apply our deep industry expertise and worldwide resources with services that include growth strategy formulation, ancillary revenue strategy, consumer segmentation, store portfolio optimization, labor optimization, M&A support, international expansion and more.


Key questions and challenges

Our experienced professionals have a deep understanding of consumer services’ business challenges in today’s marketplace. We encourage our clients to ask themselves a few key questions:

  • Do I have a comprehensive understanding of my core and adjacent customers? How satisfied/loyal are they? What are the most effective levers to activate them? How much accessible runway exists?
     
  • How will the differing preferences of the millennial generation affect my business? How can I better position myself to service this group (offering, experience)?
     
  • How do I combat disruption from competitive at-home solutions (e.g., customized hair coloring for at-home application, hand-held dermatological treatments)?
     
  • What is my Edge Strategy® to effectively monetize and find growth in areas around my core business?
     
  • How well have I penetrated existing markets? What is the potential number of attractive locations for me? What are the drivers of successful location performance? What locations align with these characteristics?
     
  • What other markets likely present an attractive expansion opportunity for me?
     
  • How can I better work with my franchise base to be as productive as possible?
     
  • What is the best deployment of capital, given strategic priorities and target return levels?


Examples of our work

To learn more about how we help clients create value in the consumer services sector, please refer to these additional insights and case examples:

  • A corporate client was considering the acquisition of an operator of specialty fitness clubs and wanted to evaluate the target’s value proposition and expansion potential. L.E.K. analyzed the dynamics within the health club market in the target’s main geographic area and the competitive value proposition therein; we also assessed the potential for expansion for the target through primary and secondary research, as well as a detailed analysis of center profitability by vintage. The client successfully completed the transaction and ultimately created a significantly more valuable asset.
     
  •  A private equity firm that owned a leading hair salon and products company was looking to acquire a hair salon chain with 1,000+ locations that would expand its geographic reach. L.E.K. was hired to conduct the commercial due diligence, with a specific emphasis on market growth and trends, consumer perceptions, franchisee assessment, competitive dynamics, and growth potential. The client successfully acquired the target company.
     
  • A weight management company wanted to improve the labor utilization of its hundreds of physical locations. L.E.K. worked closely with the company to analyze traffic patterns, staffing models and current pain points. We developed a recommended staffing strategy that has enabled the company to immediately realize significant cost savings across its store fleet.
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