In mid 2012, Nautilus (manufactures and markets exercise equipment) was seeing sales of its Schwinn Upright Bikes decline. A 6 person team was tasked with turning this around. Instead of continuing to interface with buyers at Dick's Sporting Goods and Sports Authority the team focused on their Most Important Customer, the consumer. As a result of uncovering the consumer's unmet needs, the team was able to make some key changes to their Upright Bikes. Three new versions of the A10, 170 and 130 Bikes were introduced in September, 2013 and sales are already up 2X. See what the team did, what they found out and what changes they made.
2. Background
March, 2012:
Directors of PD and PM attend an MVI Workshop
May, 2012:
Director of PD attends the first MCI Workshop
June, 2012:
Sales of Schwinn Upright Bikes are declining
Decision made to set up a project and use the VIP
Copyright Value Innovations, 2004-2013 All rights reserved
2
3. 150 Upright Stationary Exercise Bike
Fully Adjustable
Perimeter weighted flywheel
Quiet magnetic ECB resistance system
16 resistance levels
Two other models: 170 and A10
Copyright, Value Innovations, Inc 2004-2014 All rights reserved
3
4. Project Definition
Objectives
Increase market share of retail Schwinn Cardio
Product Line
What will it take to win in this highly competitive
market?
Primary focus on consoles
Introduce the Value Innovation Process® to
Nautilus
Uncover customer insights that can be leveraged
on other products
Copyright Value Innovations, 2004-2013 All rights reserved
4
5. Project Definition
Deliverables
“To Be” value curve from the perspective of the
most important customer (MIC)
Elements ranked & compared to “Best in
Class”
Plan for “HOW” to deliver on “To Be” value curve
elements
Copyright Value Innovations, 2004-2013 All rights reserved
5
6. Project Definition
Project Kick-off: 6/5/12
Round 1 Interviews: 6/19/12
Round 2 Interviews: 6/26/12
Round 3 Interviews: 7/17/12
Recommendations: 7/27/12
RKL Note: VIP cycle time, 7 weeks!!
Copyright Value Innovations, 2004-2013 All rights reserved
6
9. 3 Questions to identify the
Most Important Customer
1. Who has to fix the problem?
2. Who loses financially?
3. Who sees the Value?
Copyright, Value Innovations, Inc 2004-2014 All rights reserved
9
10. The 3 Question Template
Who has to fix
the problem?
Who stands to
lose
financially?
X
Amazon
Sporting Goods
Company
X
X
X
Dept Merchandiser
Buyer
User/Consumer
Who sees
the Value?
X
X
XXX
X
X
Copyright, Value Innovations, Inc 2004-2014 All rights reserved
10
11. Amazon
Consumer
Sporting Goods
Store
Consumer
Consumer
Up until March, 2012 Nautilus talked exclusively to Buyers
In June, 2012 Nautilus determined Users/Consumers were
the Most Important Customers
Copyright, Value Innovations, Inc 2004-2014 All rights reserved
11
14. Ca rd io Co nso les
N autilus FIN AL
1
Value to Hom e User
Low
# Prog ram s
20
H ig h
20+
# Prog ram s
2
Ip od
No
Data
N o = 0, To Sp eak ers = 2.5, D ata = 5
3
Sp eakers
No
Prem
N o = 0, Yes = 5, Prem ium = 7.5
4
Connec tivity
N o = 0, USB = 5, W ireless = 10
5
Fan
Yes
Prem
N o = 0, Yes = 5, Prem ium = 7.5
6
Console Looks
6
8
1- 10 Sub jec tive
7
Sc reen Size
Small
Med/Lrg
Sm all = 2.5, M ed = 5, Larg e = 7.5
8
Interfac e
1- 10 Sub jec tive
9
Trac king
No
Yes
N o = 0, Yes = 5, Prem ium = 7.5
10
Read ing Rac k
1- 10 Sub jec tive
11
Brand
7
11
N LS Survey PM '11 Unaid ed %
0.0
Schwinn 840
Best in Class
2.8
5.5
8.3
##
16. Contextual Interview Details
Seven interviews conducted over a five day
period for rounds 1, 2, and 3
Two participants were paired in each interview
Participants were located across the United
States, owned a piece of cardio equipment, and
worked out consistently at home
Interviews were conducted via the phone for
rounds 1 and 2
Round 1 interviews were recorded and
transcribed
Copyright, Value Innovations, Inc 2004-2014 All rights reserved
16
17. Contextual Interview Details
Used Webex for round 3 interviews so that
participants could see the concepts presented
Interview questions were sent out 2 to 3 days
ahead of time
Participants were given a $100 gift card after the
third interview
Copyright, Value Innovations, Inc 2004-2014 All rights reserved
17
21. Ca rd io Co nso les
N autilus FIN AL
1
Value to Hom e User
Low
# Prog ram s
20
H ig h
20+
# Prog ram s
2
Ip od
No
Speakers Data
N o = 0, To Sp eak ers = 2.5, D ata = 5
3
Sp eakers
No
Prem
N o = 0, Yes = 5, Prem ium = 7.5
4
Connec tivity
N o = 0, USB = 5, W ireless = 10
5
Fan
Yes
Prem
N o = 0, Yes = 5, Prem ium = 7.5
6
Console Looks
6
8
9
1- 10 Sub jec tive
7
Sc reen Size
Small
Med/Lrg
Lrg
Sm all = 2.5, M ed = 5, Larg e = 7.5
8
Interfac e
1- 10 Sub jec tive
9
Trac king
No
Yes
N o = 0, Yes = 5, Prem ium = 7.5
10
Read ing Rac k
1- 10 Sub jec tive
11
Brand
7
11
N LS Survey PM '11 Unaid ed %
0.0
Schwinn 840
To Be
2.8
5.5
8.3
##
Best in Class
Copyright Value Innovations, 2004-2013 All rights reserved
21
22. Primary Upgrade: Over-sized console with
26 total programs including a second display
Additional Upgrades for the User:
Second console display
MP3 music input port
Speakers
Console fan
Water bottle holder
Transport wheels
Extra-wide seat
Oversized pedals with toe straps
Comprehensive warranty coverage
Copyright, Value Innovations, Inc 2004-2014 All rights reserved
22
25. What’s Happened?
September, 2013 - Introduced:
3 Upright Bikes
A recumbent bike
An elliptical
October, 2013
User feedback from Amazon..very positive
150 suggested retail price, $499. Offered at $299
Sales up dramatically
Copyright Value Innovations, 2004-2013 All rights reserved
25
26. What’s Changed?
Nautilus:
Now doing face-to-face interviews
Use Value Curves on all projects even if the
project is not going through the VIP
Copyright Value Innovations, 2004-2013 All rights reserved
26