Value Innovation Success Stories
Nautilus Cardio Product Line
1
Old Product
New Product
Issue: Who is the Most Important Customer?
© Value Innovations, Inc., 2004-2015. All rights reserved.
2
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
Copyright Value Innovations, 2004-2013 All rights reserved
3
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
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
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
6
Value Chain
© Value Innovations, Inc., 2004-2015. All rights reserved.


Amazon
Sporting
Goods Store
Consumer
Consumer
Consumer
Up until March, 2012 Nautilus talked exclusively to
Buyers
In June, 2012 Nautilus determined Users/Consumers
were the Most Important Customers
© Value Innovations, Inc., 2004-2015. All rights reserved.
8
“As Is” and “Best in Class”
Value Curves
© Value Innovations, Inc., 2004-2015. All rights reserved.
“As Is”
Schwinn Console in 2012
© Value Innovations, Inc., 2004-2015. All rights reserved.
10
Cardio Consoles
Nautilus Draft 2
1
2
3
4
5
6
7
8
9
10
11
Value to Consumer/User
Low
Exercise Programs
20
Total Number
Ipod
No
No = 0, To Speakers = 2.5, Data = 5
Speakers
20+
Data
No
No = 0, Yes = 5, Premium = 7.5
High
Prem
Connectivity
No = 0, USB = 5, Wireless = 10
Fan
Yes
No = 0, Yes = 5, Premium = 7.5
Console Looks
Prem
6
1-10 Subjective
Screen Size
8
Med/Lrg
Small
Small = 2.5, Med = 5, Large = 7.5
Interface
1-10 Subjective
Tracking
No
No = 0, Yes = 5, Premium = 7.5
Yes
Reading Rack
1-10 Subjective
Brand
7
NLS Survey PM '11 Unaided %
0.0
Schwinn 840
© Value Innovations, Inc., 2004-2015. All rights reserved.
Best in Class
2.8
5.5
11
8.3
##
Contextual Interviews
© Value Innovations, Inc., 2004-2015. All rights reserved.
Contextual Interviews
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!!
Copyright Value Innovations, 2004-2015 All rights reserved
13
Some Output From Interviews
Book rack & second display
 Books, iPads and Kindles fall off the
console
 Can’t see the display
MP3 music input port
Speakers
 Don’t like ear pieces, they get in the
way
Console fan
Water bottle holder
© Value Innovations, Inc., 2004-2015. All rights reserved.
14
“As Is” and “To Be”
Value Curves
© Value Innovations, Inc., 2004-2015. All rights reserved.
Cardio Consoles
Nautilus Draft 3
1
2
3
4
5
6
7
8
9
10
11
Value to Consumer/User
Low
Exercise Programs
High
20
Total Number
Ipod
No
No = 0, To Speakers = 2.5, Data = 5
Speakers
Speakers
No
No = 0, Yes = 5, Premium = 7.5
Prem
Connectivity
No = 0, USB = 5, Wireless = 10
Fan
Yes
No = 0, Yes = 5, Premium = 7.5
Console Looks
Prem
6
1-10 Subjective
Screen Size
9
Lrg
Small
Small = 2.5, Med = 5, Large = 7.5
Interface
1-10 Subjective
Tracking
No
No = 0, Yes = 5, Premium = 7.5
Yes
Reading Rack
1-10 Subjective
Brand
7
NLS Survey PM '11 Unaided %
0.0
Schwinn 840
© Value Innovations, Inc., 2004-2015. All rights reserved.
To Be
2.8
5.5
8.3
##
“To Be”
Schwinn Console in Sept., 2013
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17
The New Products
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18
What Happened?
September, 2013 - Introduced:
 3 Upright Bikes
 A recumbent bike
 An elliptical
October, 2013
 User feedback from Amazon..very positive
Copyright Value Innovations, 2004-2013 All rights reserved
19
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
Copyright Value Innovations, 2004-2013 All rights reserved
20
What Happened?
November, 2014
 Nautilus reports sales up 31% over the
same 12 mo. period in 2013
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21