6 min read
- Dave Colina is the owner of the sports recreational drink O2.
- He focused on helping his customers.
- His first initiative was called 50/50.
Dave Colina’s startup could be hard hit by the pandemic. His company makes the recreational sports drink O2, and before COVID-19, half of his business relied on gyms. But when the sports centers closed and the athletes were trapped at home, Colina became concerned about the company’s future. However, he decided to take a risk: he found unique ways to financially support these closed gyms even if he had little money in them. Cashbox.
“As long as we did the right thing to help our gym owners, we felt like it would come back to us in the end,” says Colina. He was right. His direct sales to consumers will be ten times higher than last year, and his entire business is on track to grow five times. But how? He explains it to us.
Gyms are a big part of your business, but how can you help them?
We go to independent gyms – CrossFit, gyms, yoga studios, places that don’t have a lot of budget backing. When they closed, we wanted to develop a program that would allow them to effectively share the financial benefits of O2 purchases, knowing that their members would normally buy from them and not us.
We call it the “50/50 Initiative”. Each gym gave its members a unique coupon code, and we shared 50 percent of the proceeds from each sale with the gym the online shopper normally works at. We sacrifice our margins significantly. We then recruited five more brands and together generated more than $ 230,000 for more than 2,600 participating gyms.
Photo: O2 via the web.
Gym owners must have loved it. Did you feel like you had won customers for life?
One hundred percent. I mean $ 230,000 spread across 2,600 gyms, which isn’t a lot of money per gym. We acknowledge that. But the gesture was very much appreciated.
And as we neared the end of the program after six weeks, we found that many gym owners were preparing for the fact that May could be really challenging. When the gyms closed, many members said, “I will keep my membership active in April because I want to support my gym.”
But many people considered canceling in May. And membership fees keep the gyms running.
So we created another program to offset the cost of people’s membership and encourage them to stay. For every member of these 2,600 participating gyms who kept their membership active in May, we’ll be giving them a $ 100 gift card. It was $ 25 from us and $ 25 from three other brands that had participated in our first program. When we announced the program we had gyms telling us that this was what kept them in business, that this was more than what their bank or government had done for them. I don’t know exactly how many people kept their membership active for this reason, but it may be tens of thousands.
How was the conversation about it in O2? The early days of the pandemic must have been scary and now you are giving away money!
To be honest, I had no idea whether to lay off staff or cut benefits. But I decided to share the profits with our gym owners because it seemed like the right thing to do.
We are a very value-oriented company and have three values: honesty, humility and rush. Looking at a decision within the lens of these values makes the decision much easier. Many companies are under great scrutiny to prioritize their customers, and we don’t accept that. We do our best to have our customers before us. That’s good business.
So basically there was no way to predict what was going to happen anyway, so you could also take what felt like a wise risk.
At that point, no one could predict anything about your company. In all honesty, I was just hoping to break even and not have to fire anyone. But that’s the most important thing Beginning– Once you are in the market, you can get an idea of the reaction and forecast it. Three or six days after these programs it became clear that we should add more fuel to this fire.
So that’s what we did. Our sales increased dramatically and so did our profit. Now we are stronger than before.
What do you think will happen next?
We are likely to see 90 percent of our customers back online. Our gym channel earnings this month will be the highest for the entire year, which is good. We are currently attracting new customers more than ever because the awareness and value of our brand is very high due to the initiatives we have taken.
What will happen in a month? I have no idea. I don’t think anyone knows. But we are still very much based on the principle “what is right?” So we put everything we can behind our gyms.