How Blockchain Will Help Pull Down Customer Churn and Push Up the Health and Fitness Industry
The last decade has been particularly good to health and fitness apps with Fitbit, Garmin, and Polar just a few of the most prominent names that have found success. They ran the gamut of uses, from monitoring your heart rate to checking your blood sugar. The fitness sector in particular has seen a variety of uses, both in terms of wearable technology and mobile apps. Now, several blockchain-based projects are entering the industry, hoping to both motivate athletes and harness the connectivity of modern health technology.
Blockchain has a few built-in advantages that could help improve usage in the sector. Firstly, the technology enables the better organization, authentication and sharing of user-generated data, thus creating a unique opportunity for gym-goers to benefit even more from their decisions. Secondly, blockchain is an ideal incentive mechanism potentially providing the cure for the New Year’s resolution abandonment challenge.
How might this look in practice?
Incentivizing Customer Retention
Many digital fitness technologies face the same primary challenge that health clubs and gyms have come to know all too well: customer churn. We have the best of intentions initially, but actually getting to the gym is much harder than it looks.
Blockchain companies like Lympo out of Lithuania see an opening here to use tokenization as a way to drive continuous use. The idea is simple. With every health and fitness achievement, you can unlock tokens as a reward. Those tokens are then reinvested into the ecosystem to buy certain perks, products or even services from participating personal trainers and facilities such as equipment, exclusive lessons, special programs and rewards.
“In our case, users are able to get LYM tokens for walking. Our partners soon will release an application that will reward users for squats — you will be able to exercise at home, get in shape and make some money,” says Tadas Maurukas, co-founder of Lympo.
The potential to properly incentivize ‘staying the course’ in fitness is of enormous value to both the businesses involved and the customers they serve, as Maurukas argues with a couple examples.
“Just imagine the gym, that pays you for attending it. For example — “Go 4 times a week and get 100 tokens!” They will even be able to fight the empty hours — “Come tomorrow between 8:00–10:00 and get double the tokens!”
Gamifying The Experience
Yet, incentives aren’t the only path to reducing churn. Of equal importance is improving the experience itself. The onset of the Internet of Things has brought several iterations of ‘connected’ gym equipment on top of the wearable market. Now, the results of your workouts can be digitally recorded (depending on the machine) and therefore utilized. Add blockchain to the mix, then you can input your local gym workout results into a blockchain-based rewards system.
The innovation here, perhaps more than decentralization, is gamification of the gym experience. Whether you are competing with friends or challenging yourself, there is reason to keep coming back to try to unlock more achievements.
“We want to incentivize healthy living by giving rewards in tokens. The ecosystem itself starts with professional fitness trainers and their clients, and then it will expand to add more and more partners so you can purchase further healthy lifestyle goods and services within the ecosystem.”
- Ada Jonuse, founder of Lympo
This could be a revolutionary moment for gyms and other health clubs that struggle with keeping new members interested. The January rush to join a gym usually ends with a March or April letdown — so many new members who have not yet established a routine and are discouraged from continuing.
For a local gym or an especially resourceful gym chain like Planet Fitness, let alone the apps and trainers involved in the industry, this could be a game changer.
Secondary Data Market
Buzz about tech companies using private data has been resoundingly negative of late. However, several projects see collecting health data voluntarily as a way to facilitate better research and generate value for the end user. Fitleap, Dyno.io ,and Lympo are just a trip of examples building new marketplaces for transactions that would be recorded by blockchain, thus providing security and transparency alongside user value.
Fitleap integrates with already-existing wearables and digital equipment; additionally, all three systems are anonymizing data for university research teams and other third parties in exchange for payment to the end user. Segmented by demographics and other traits, it would allow more complex surveys of health and fitness data that has been previously unavailable.
“On the DYNO marketplace, the researchers could publish a request to study people who fit their particular criteria. Users who match that criteria would receive an offer on their DYNO app, and sign a smart contract when they accept to take part in the study.”
- Dyno.io
Established companies like Fitbit would benefit immensely from this sort of organization of information. Third parties might agree to share their findings with the app and device companies where the data originates. This information go could far in helping develop further methods of retention among users and find patterns in device usage.
Health Insurance
One stock of private firms that should be especially interested in this sort of data is the insurance industry. Such firms would benefit immensely from the information these apps collect. Besides serving as a conduit for gathering new data to better understand customers, it can also be an avenue for customers to purchase new and better insurance plans.
Lympo already claims a venture investment from a German VC with a particular interest in insurance-focused startups.
“In the future, they will also be able to get tokenized rewards by sharing their data with insurance or other data-driven companies,” Maurukas tells us. “It’s a new revolutionary to keep users healthy.”
As a way to reach new markets, insurance companies see a major opportunity to connect with customers. Customers would also be incentivized for reduced rates or special benefits from their insurance companies, who for their part would be glad to provide such incentives in order to save on long-term payouts to customers who might otherwise live less healthier lifestyles.
The Missing Link
“Your data is encrypted on your phone and you decide whether you want to share it or not. We use Blockchain technology to prove that you really have done certain activities (for example, 10,000 steps). It’s almost proof that you’re really fit.”
- Fitleap CVO Lars Müller
Blockchain and cryptocurrency are still new technologies which carry much potential. Recent advancements in wearable fitness trackers and health apps already carry the potential to better harness information for improving users’ respective lifestyles.
Additionally, businesses would benefit from taking a more secure approach to their clients’ private health data. By placing that data indisputably in the hands of users and customers, customers will feel empowered and sure about where their information is at all times. Companies would actually build deeper relationships with their users while also building a new value-added service.
Via stronger data security, tokenized and connected rewards systems, and better insurance plans, blockchain tracking and data segmentation might provide the missing link to finally make the vision of technology improving society’s health truly possible.
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