There’s a basic conflict for every gym owner. On one hand, they opened a gym because they love the sport and art they train in, and would like to make it as accessible as possible to people in their community. On the other hand, they are now running a business with their livelihood on the line.
From a business perspective, gym owners are worried about their bottom line. From the sports-fan and instructor perspective (which not every gym owner is), the goal is to provide the best experience and value to gym members.
Those two concerns are often at odds with each other, and addressing one often comes at the expense of the other. The balancing act of selling and making a profit with providing the best product and value to members is the core dilemma for gym owners, and there are many different takes on how to go about it.
The Balancing Act
There are two main ways in which gyms generate revenue –
- They need to sell more people on the prospect of joining their gym.
- They need to maximize the value they extract from each member.
At every point in the process of onboarding and retaining gym members, gym owners make small decisions whether to maximize what they get out of the relationship right now, or whether to focus on building a long term relationship.
I’ve been covering the sales funnel for gym members in-depth on this blog over the last few months, addressing topics such as how people find martial arts schools, how to increase visibility on search engines and what makes a good gym website, among others.
While I’ve been focusing on best practices for increasing gym exposure in my articles, there are other, more questionable methods to attract new members and get them to sign on the dotted line for more that they asked for.
Gym owners vs. Members
In a recent online discussion on Reddit, one of those more common practices was called out, specifically the tendency of gyms to never publish their prices online, and sometimes not even their schedule or their physical address(!). It’s a concerted effort to get prospective members to contact them first in order to get that information, and try to make a sales pitch at that point.
This is an example of where members’ and gym owners’ interest are not aligned. People who are looking for a place to train can use all the information they can get to make an educated decision, while gym owners would rather obscure that information and get those people on the phone or in the gym so that they could make a personal pitch.
The top comment in that Reddit discussion sheds a lot of interesting light on the various tactics used by gym owners to maximize their bottom line at the expense of the members. It was written by David Melik Telfer, former part owner at Robot Fight & Fitness, and the founder of É Nóis, a BJJ gear company.
He talks about the bait & switch method popularized by Taekwondo gyms in the 70s, and later introduced to MMA and BJJ by the infamous Lloyd Irvin:
What’s with the pricing, no schedule and the 30 days free, etc? Essentially, the Lloyd Irvin method (again- I’m one of the few people that has a more nuanced feeling towards Lloyd) the idea is to make an emotional sale. And that emotional sale begins on the phone. And to get someone on the phone, the best thing is to get them call you. And if they don’t know your prices or schedule or even your fucking location (some people would not even put their location), well, more people will call.
When they call, the emotional sale begins. “What benefits are you looking for?” “Oh, you want to have a six pack and have perfect hair?” “That’s great John, almost everyone here has a six pack and perfect hair, we can help you with that.” And like a fucking laser beam every interaction with that person is about how the gym can help that person get a six pack and perfect hair.
This is the initial hook. Getting the person interested in a future in which every dream they had about training is fulfilled. Then comes the actual sale:
So then they need to get them in. How do you get Johnny in so you can emotionally sell him a contract? “Johnny, do you know we have a 30 day free trial and you get a free t-shirt?” That shit works. Why, because it’s 30 free fucking days.
But is it really 30 free days? Sort of. Ok, not really. How does it work? They come in, and you emotional sell the hell out of them. Have them touch things, keep telling them about the six packs and hair. Give them their free private lesson. Can they try a class? Fuck no! Who knows what could happen in class. They could get hit by another new student, they could hate the teacher. But a private (i.e., learning two moves with a sales person and doing a bunch of pushups to get the emotions running) works great.
So, here’s the bait and switch. “Johnny, you can do the free 30 day trial, but if you do, you’ll have to pay $300 initiation fee at the end of the 30 days. You know you’ll love this, just sign up now and there will be no initiation fee?” “No?” “Well, don’t tell my boss, but I have a coupon for free gloves I can give you if you sign up.” “Still no?” “Johnny, we have a 60 day money back guarantee, you have nothing to lose.”
Brief intermission- how can they offer a 60 day money back guarantee? Because that has a catch too. You MUST attend two classes a week for the entire 60 days (your two assigned classes that is) or you can’t get your money back. And guess what, nobody makes it to every fucking class, nobody.
David tried implementing this method at his gym, for a while. And while the business prospered initially, it was taking a toll on him and ruining his relationships with the gym members.
So what happened at our gym? Well, I felt guilty every fucking day for a year with the 30 day trial crap, pushing sales, etc. At the end of a year- I felt like we had to change. I realized I wouldn’t want to train at my own gym. Why? Because the gym had become management vs students. It sucked. That’s THE NUMBER 1 PROBLEM with that TKD/Lloyd model. The student becomes an enemy that you have to outsmart before they fuck you. Of course there are students that take advantage of gyms and they suck (a lot of gym owners mentioned that here and it’s true). But, that’s the minority. Our students were our family. So we changed.
Remember why you are running a gym in the first place
The sales tactic mentioned above have been proven to be effective. However, they also have an adverse effect by alienating members over the long term, by selling them false promises and getting them stuck in contracts they never wanted.
I’ve previously written about how strong referral programs are as a marketing tool for gyms. People will only refer your gym to others if they’re happy training there, and happy with you as a gym owner. By maximizing immediate revenue, you could be shutting down opportunities for later growth, at the same time as eroding the trust you have with your members. The trust and reputation of a business is something that takes a long time to build, but very little time to destroy.
At the end of the day, running a business in a way you can be proud of, also matters. Going back to David’s story with Robot Fight & Fitness, he puts it very well:
We kept all the great aspects about what we learned – how to be a better coach, how to create a good culture at the school, how to build people up slowly rather than scaring weak people off. But we became totally transparent with everything else.
And this brings me to my last point. I get what other owners are saying, it is a tough business. But I think ultimately, you have to offer a great service and reputation will conquer all (provided you you make an effort to get your reputation out there). And you have to be true to yourself. You did NOT get into this business to make a million dollars, you got into it because you wanted to create a great community (well- that’s why I did).
And there you have it. There are ways to make a solid business from running a gym, and build strong, long term relationships with your members, though it’s certainly not easy.
What are your thoughts about this? How far should gyms go in order to be profitable? Leave your comments below!