From where I stand as a membership marketing consultant, mostly to “Ma and Pa” gyms, many facility owners are making a big mistake: trying to beat the “big boys” at the their own game. They are offering the same deep discounts, but don’t have the big marketing budgets to compete effectively.
The idea is to get a ton of new members for as little as $10 a month, then hope most don’t show up.
But that’s not why you got into the fitness business in the first place. You genuinely wanted to help people lead happier and healthier lives. And you still do!
But times are tough. The downward price pressure on your business has grown to catastrophic proportions. I regularly meet with gym owners who charged $40 or more a month just a few years ago.
But these days, they feel compelled to cut their monthly fees to $25 or less, and maybe even throw in group classes at no extra charge.
It’s tough to make money that way. So the search for additional revenue streams is on — and has become desperate. In a recent blog post, I recommended against tanning due to the reputation and regulatory risks. For the same reasons, I also recommend against Multilevel Marketing (MLM) sales of supplements.
So what can you do to create additional revenue streams? The surprising answer turns out to be charging additional fees for what you know best: program design that helps people. And that includes fees from people who may show up in your facility only occasionally — or not all!
I propose a hybrid model, combining in-person and online training.
The hybrid model I propose is a much better idea than price-slashing and volume sales, or selling supplements and tanning.
Let’s begin at the beginning. The whole idea that you need more members may be mistaken.
What you really need is more revenue per member.
After all, CrossFit and speciality gyms “get away” with charging $150 – $200 per month, often for nothing more than group classes with as many as 20 members in a dingy warehouse with minimal equipment and no locker room.
But as I wrote in another recent blog post, what makes CrossFit special is its sense of community. You can create that same sense of community with my proposed hybrid model — and charge the very same sort of very premium prices.
Now, think about why you lose members:
- They move away
- They get busy at work or with family commitments
- They suffer from lack of motivation or lose interest
- Maybe they even get fed up with your newly-crowded facility (because of all those new members you felt forced to sign up at deep discounts)
Wouldn’t you like to retain more members, re-connect with old members, and generate more income per member? It all draws on your program design expertise — something you are probably undervaluing right now. A key point is online training is still relatively new. The big winners so far have been the tools providers and a few celebrity trainers or authors who already have a large “tribe” of followers on the Web.
But online training is the wave of the future. You ignore it at your peril. Here are a few of the key players.
With 1.6 million online members, Fitocracy is “gamifying” fitness. It’s billed as a health and fitness social network that empowers users to succeed by tracking workouts and competing with others to “level up.” The coaching component connects users with trainers who charge $50 to $150 per month, with a 13 week minimum. Coaches range from a fat loss expert for beginners to a powerlifting team coach. A few of the coaches are big names who have cut back or severed their associations with well known gyms.
Based in Denmark, this start-up has a fantastic mobile application that connects trainers and athletes. Fitbird says it helps personal trainers by providing a marketplace for their in-person and online services with “the best possible tools” for success. Fitbird uses the AIrbnb model: it matches clients and trainers and collects the fees, retaining a percentage for itself.
An early player in this still-new field, trainerize provides tracking tools for trainers, along with ways to upload customized videos and websites.
Call be cranky. Call me old-fashioned. Call me anything you like. I’m intrigued, but still a bit skeptical. My take?
There is too much focus on technical capabilities, and too little attention to the personal relationships and hand-on, in-person coaching that have always made “Ma and Pa” gyms special.
The idea that people would pay big bucks to a coach they may never have met in person still strikes me as batshit crazy. There is only so much you can do via Skype, no matter how many videos your client uploads for critiques.
But times change. And we all have to change with them. So I invite you to consider the following:
15 hybrid in-person/online clients at $125 a month is $1,875 a month or $22,500 a year.
To make your additional $22,500 per year, would you rather try to sign up almost 100 new members at $20 each a month (if that’s even feasible in your market) or upgrade 15 existing members to this premium hybrid program?
Who is a hybrid member? She might be a working Mom in her mid-30’s who has just returned to work, following a maternity leave for the birth of her third child. Realistically, what do you think the chances are she will continue to show up a $30 a month?
Chances are you are going to lose her. Wouldn’t it be better to upgrade her to $125 a month, showing up at the gym just once or twice a month?