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. Consulting 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 to 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 we have a comprehensive understanding of our 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 Millennials and Gen Z affect our business? How can we better position ourselves to service these groups (offering, experience)?
  • How do we combat disruption from competitive at-home solutions (e.g., customized hair coloring for at-home application, on-demand digital fitness services, handheld dermatological treatments)?
  • What is our Edge Strategy® to effectively monetize and find growth in areas around our core business?
  • How well have we penetrated existing markets? What is the potential number of attractive locations for us? What are the drivers of successful location performance? What locations align with these characteristics?
  • What other markets likely present an attractive expansion opportunity for us?
  • How can we better work with our 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 successful fitness chain was looking to grow internationally and wanted a clear road map to focus its efforts where the opportunity was greatest. We evaluated a broad landscape of countries for possible expansion and worked to narrow the list based on a number of strategic criteria. We then conducted deep dives in high-priority countries, including an overview of country-specific business dynamics, market opportunity, competitive landscape, ease of entry and operational considerations for the brand. Based on our recommended road map on the optimal prioritization and sequencing of regions/countries, the client was able to accelerate its international expansion and increase its success rate in these countries.
  • A private equity firm was considering purchasing a high-end health club operator, but wanted an objective assessment of its investment thesis. In particular, the firm was seeking confirmation that the target’s underlying market, competitive value proposition and expansion potential made it an attractive investment opportunity. We first assessed the overall health club market in the region, where our research indicated gaining market share would be dependent on addressing a trend toward personalization and on aligning with other critical market trends. We then examined the target’s competitive positioning directly with members and nonmembers, and performed a series of catchment analyses to determine which areas would be most attractive for expansion. Based on our recommendations, the PE firm better understood the target’s growth potential and revenue-generating opportunities, thereby leading to a successful acquisition. The client subsequently announced its plan to expand the chain’s locations fivefold within five years.
  • A weight management company wanted to improve the labor utilization of its hundreds of physical locations. We worked closely with the company to analyze traffic patterns, staffing models and current pain points. We developed a staffing strategy that has enabled the company to immediately realize significant cost savings across its store fleet. Read more

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