Nautilus Execrcise Bikes Success Story using the Value Innovation Process
20
Value Innovation Success Stories Nautilus Cardio Product Line 1
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In mid 2012 sales of Nautilus Exercise Bikes were plummeting. Using the Value Innovation Process they identified their Most Important Customer, carried out Contextual Interviews and understood what they had to do to deliver exceptional value. A new lines of bikes with a completely new cardio control unit was introduced in September, 2013. They have been a huge success
Transcript of Nautilus Execrcise Bikes Success Story using the Value Innovation Process
1
Value Innovation Success Stories
Nautilus Cardio Product Line
2Copyright Value Innovations, 2004-2013 All rights reserved
Key Points
Nautilus was seeing sales of its Schwinn product line declining After they understood the VIP, they
recognized they were not interfacing with the Most Important Customer
They completed 3 rounds of Contextual Interviews with 14 users in 7 weeks
Focused on the Cardio Control unit
Introduced new product lines 13 months later….sales improved immediately
3Copyright Value Innovations, 2004-2013 All rights reserved
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, Inc 2004-2014 All rights reserved 4
150 Upright Stationary Exercise Bike
Fully Adjustable Perimeter weighted flywheel 16 resistance levels
5Copyright Value Innovations, 2004-2013 All rights reserved
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
Project Definition
6Copyright Value Innovations, 2004-2013 All rights reserved
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
Project Definition
7Copyright Value Innovations, 2004-2013 All rights reserved
Project Kick-off: 6/5/12
Contextual Interviews (7 in each round, with 2 users on each interview):
Round 1: 6/19/12
Round 2: 6/26/12
Round 3: 7/17/12
Recommendations: 7/27/12
VIP cycle time, 7 weeks!!
Project Definition
Value Chain
9Copyright, Value Innovations, Inc 2004-2014 All rights reserved
Nautilus
Amazon
Consumer
Sporting Goods Store
Consumer Consumer
Value Chain
Up until March, 2012 Nautilus talked exclusively to Buyers
In June, 2012 Nautilus determined Users/Consumers were the Most Important Customers
“As Is” and “Best in Class”Value Curves
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 11
“As Is”
Cardio Console in 2012
Low High
Exercise Programs
Total Number
Ipod
No = 0, To Speakers = 2.5, Data = 5
Speakers
No = 0, Yes = 5, Premium = 7.5
Connectivity
No = 0, USB = 5, W ireless = 10
Fan
No = 0, Yes = 5, Premium = 7.5
Console Looks
1-10 Subjective
Screen Size
Small = 2.5, Med = 5, Large = 7.5
Interface
1-10 Subjective
Tracking
No = 0, Yes = 5, Premium = 7.5
Reading Rack
1-10 Subjective
Brand
NLS Survey PM '11 Unaided %
0.0 2.8 5.5 8.3 ##
1
2
3
4
5
9
10
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Cardio ConsolesValue to Consumer/UserNautilus Draft 2
6
7
8
20
No
No
Yes
6
Small
No
7
20+
Data
Prem
Prem
8
Med/Lrg
Yes
11
Schwinn 840 Best in Class
Contextual Interviews
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 14
Book rack & second display Books, iPads and Kindles fall off the
console Can’t see the display
MP3 music input portSpeakers
Don’t like ear pieces, they get in the way
Console fanWater bottle holder
Some Output From Interviews
“As Is” and “To Be”Value Curves
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 16
“To Be”
Cardio Console in Sept., 2013
Low High
Exercise Programs
Total Number
Ipod
No = 0, To Speakers = 2.5, Data = 5
Speakers
No = 0, Yes = 5, Premium = 7.5
Connectivity
No = 0, USB = 5, W ireless = 10
Fan
No = 0, Yes = 5, Premium = 7.5
Console Looks
1-10 Subjective
Screen Size
Small = 2.5, Med = 5, Large = 7.5
Interface
1-10 Subjective
Tracking
No = 0, Yes = 5, Premium = 7.5
Reading Rack
1-10 Subjective
Brand
NLS Survey PM '11 Unaided %
0.0 2.8 5.5 8.3 ##
Cardio ConsolesValue to Consumer/UserNautilus Draft 3
6
7
8
9
10
11
1
2
3
4
5
20
No
No
Yes
6
Small
No
7
Speakers
Prem
Prem
9
Lrg
Yes
7
Schwinn 840 To Be
Copyright Value Innovations, 2004-2013 All rights reserved 18
The New Products
19Copyright Value Innovations, 2004-2013 All rights reserved
What 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
20Copyright Value Innovations, 2004-2013 All rights reserved
Learnings
Nautilus: Recognized they were not interfacing with
the Most Important Customer
They switched their focus to users from buyers at Sporting Goods stores
Uncovered users’ unmet needs with 7 first round Contextual Interviews with 14 users
Focused on the Cardio Control unit
Introduced product lines with the new Cardio Controls in 9/13. Sales up
