How Equinox battled passive churn during growth

Revenue generation isn’t solely the purview of our friends in sales, marketing, and customer success. Top-line gains can also be found in nontraditional revenue-producing departments. For high-end gym Equinox, it was the technology department that ensured money wasn’t being left on the table.

Revenue Brew spoke with the fitness brand, and the fintech it partnered with, about how centralizing payments helped enable a swifter global expansion.

Margins matter

According to Holly Worst, VP of retail and unified commerce at fintech company Adyen (a single-stack platform that unites various financial tools), Equinox’s CTO Eswar Veluri and his team were originally operating with three to four payment system providers during the brand’s international expansion. (Its first London club opened in 2012, followed by Toronto in 2013.)

This fragmented approach led to the dreaded customer friction—most notably at one of the brand’s London locations, where certain payments were not translating from US-based financial systems.

“As with any company, there is always a certain scaling point where things don’t scale right,” Veluri told Revenue Brew.

Equinox decided to use Adyen to centralize its payment systems. Veluri outlined some of the benefits: First, it allowed for a deeper understanding of different kinds of payment rails—ranging from the automated clearing house (ACH), card networks like Mastercard or Visa, or real-time payments (RTP)—as well as interbank transactions. “Figuring out which one to run on, and charge us less money, whereby we make more money, was one of the simplest kinds of concepts,” Veluri said.

As a result, rejected payments and other payment blockers became less common. Veluri said Equinox also used the platform’s AI recommendations to “prevent bots and fraudulent attempts on our cards.” Lastly, Veluri said two technical employees who worked on RevOps products had since been freed up.

“It’s not a full-scale outsourcing of intellectual property, but…as long as you can do it, we’ll take advantage of it,” Veluri said.

The power of centralization

Worst said payments data is an “additional piece of the pie” helping organizations pull insights from customer behavior. She said having a centralized payment system also makes it easier to track and translate pertinent shopper data.

“Using one provider, we can provide insights of who likes to shop in store, online through your app, and link all that customer data together,” Worst said.

That data can be valuable for go-to-market teams looking to see how marketing efforts are affecting sales.

“Payments are really driving that extra revenue. You can see if you actually drew someone into your gym or into your store to make a purchase based off of a digital ad or a mail flyer that you did within the area,” Worst said.

Expert insight: payment systems

Tevia Segovia, head of Bain’s global payments practice, said in an email to Revenue Brew that across subscription businesses “passive churn from failed payments is a large share of total churn, not a rounding error.” Furthermore, around 20%–40% of total churn is involuntary and driven by issues like expired cards, insufficient funds, and bank or issuer declines.

“For companies in a growth phase, payments directly affect conversion, retention, cash flow, and scalability. At the top of the funnel, friction in the payment flow (limited methods, cumbersome onboarding, repeated declines, clunky checkout) reduces trial-to-paid and lead-to-customer conversion, weakening the return on sales and marketing spend,” Segovia wrote.