How CrossFit Is Destroying A Billion Dollar Brand
A CASE STUDY
“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” – Peter Drucker
I believe that when Peter refers to ‘Marketing’ he is speaking broadly about the application of branding, positioning, advertising and sales under a single broad term. When principles of branding, positioning, and marketing are implemented correctly, and according to Peter the ‘basic functions’ of the business enterprise are the focus, then growth for a company can seem exponential.
However, failure to implement principles correctly or remain consistent then the results can disappear just as fast as they came. The history of business is full of examples of companies that started off well with great positioning, effective branding and powerful marketing. When they attempted to continue their growth and made decisions that were against these principles they quickly paid the price and often lost market share, or worse soon disappeared. Some companies that come to mind are IBM, Federal Express, and Atari.
Let’s look at a case study of a company that started a wellness revolution out of a garage (like where so many good stories start), and is now seemingly doing their best to destroy the positioning, and branding, that gave them such noteworthy success.
CrossFit, for those who don’t know, is a constantly varied, high-intensity functional movement wellness program that was designed to get people moving and eating well in order to stop the pandemic of chronic disease that is destroying western countries health systems.
CrossFit naturally incorporated strong branding and positioning principles early on and attracted a huge following. They were a purpose driven brand that were growing organically all around the world with people that truly believed in their methodology and the difference they were making to peoples lives.
The company had a strong mission that they were laser focused on. Their vision for a different future was one that attracted fitness and medical professionals from all walks of life. They had created an innovative differentiated product that attracted not just customers but a tribe of true fans. These dedicated and passionate fans helped in turn build a strong and recognisable brand.
Their positioning was powerful. They were leaders and first in what would become a transformation of gyms and fitness facilities around the world into high-intensity functional movement centres. They were focussed and not afraid to polarise audiences by calling out outdated training and diet thinking and had the data and results to prove what they were doing worked.
They had found a problem with the health and fitness industry that they were perfectly positioned to solve. They targeted a market that had the money to make their business model successful. The market was battling a obesity and chronic disease pandemic and on the forefront of the wellness trend. All 4 criteria that make a good market were present. I wrote about that previously and why it is essential for business success (How to pick a Niche – 4 Criteria).
They even declared war against big soda. A move that was aligned with their values and showed that they were not afraid to put their money where their mouth was. Actions like this continued to show that they would take courageous action required to achieve their mission and further solidify their positioning. As a result the CrossFit brand, despite only being a licensing system with no business support, grew over 15,000 affiliates making it one of the largest and most successful fitness platforms in the world.
CrossFit at this stage exemplified how a differentiated product, that took a courageous position in the marketplace and were focussed on building a strong philosophy with a meaningful mission and vision creates something truly special, a brand.
This brand was the foundational layer that propelled their success forward and ultimately made their endeavours successful. In many, many ways they had, I believe unintentionally, nailed their positioning, branding and marketing. They focussed on the customer first and on delivering those customers value, the success they have achieved was just the result of that process.
If positioning is a battle of the mind and marketing a battle of ideas, then CrossFit had both.
The Beginning Of The End?
All seemed to be going well for CrossFit, but then the cracks began to show.
The position they had developed in the mind of the customer was one of inclusive fitness that would improve the way you would live your life. Over time, the message began to dilute, the growth and popularity of the CrossFit Games meant the message for most became one of crazy fit athletes performing highly challenging movements that no normal person would be able to do.
No longer was it viewed as a wellness program that could be adapted to people of all levels, it had become in the mind of consumers a scary and intimidating fitness program for the elite. The perception of CrossFit had changed, as a result their positioning was no longer holding a single idea of ‘who they were’ and the branding no longer presented a clear and focused message.
Most importantly the tribe of superfans that were so passionate about the product were divided, this presented a problem with whether they still identified with the CrossFit brand, or whether they even belonged. A Brand cannot exist without a cohesive tribe of loyal customers that align with the company’s purpose and values.
This unfortunately was just the beginning…In recent years CrossFit has been sold by its founder Greg Glassman after some controversial tweets and accusations of poor character. It has now been acquired by Berkshire Partners, an investment firm, and a technology entrepreneur, Eric Roza.
Since its acquisition many of the people that worked for and crafted CrossFit’s early direction have left. The mission, vision and purpose of the company no longer has the same powerful drive. This is dangerous as this alignment is what allowed the tribe of fans to craft the brand. The company had purpose and a willingness to take courageous steps in order to have a positive impact that aligned to its mission and vision.
CrossFit built loyalty through authenticity. What they said they did and what they actually did were aligned. Several recent decisions from CrossFit seem to show that this authenticity no longer seems to exist. Decisions are being made for short term financial gain, such decisions have a history of destory long term success.
This can be seen clearly with the recent sponsorships for the CrossFit Games by Monster Energy Drinks. A decision that does not align with CrossFit’s diet recommendations of eating ‘no sugar’. Just the perception of association with Monster negatively impacts the CrossFit brand, its positioning and all its previous work on fighting big soda.
History has shown time and again that making short term decisions, particularly for financial reasons, only harms a brands long term success, both financially and with market share.
Those now in charge of CrossFit are responsible for the brand’s future success or demise.
Is this the beginning of the end? Only time will tell.