I workout at the local gym here in Charleston. I mainly use the free weights but occasionally I may step onto a cardio machine for a few minutes. There’s a lot of gyms in my area, but I chose this one because of the price. For $20 a month I’m paying less than a dollar every time that I want to workout.
At said gym there are probably 12 – 15 full-time employees that fill the various roles like personal training, front desk, cleaning, etc. I’ve been going there for over six months now, but I doubt any of them know my name. I actually got a new debit card a few months ago, missed two months of payments and was just told that I had to give them a new one or face some felony late charges. I guess no one looks at the screen when I buzz in.
Okay I promise, this isn’t just a rant about how poorly my gym is run but an actual critique of their business.
This gym runs on the “Planet Fitness Model” which almost entirely focuses on signups or volume.
This model works when you have:
High sign-up rate: Forced by unending promotions and personal trainers who spend their time getting people to come in and sign up for a session.
Low acquisition costs: While I’m not sure what the LVOC for gym members, this model wouldn’t work if you were spending $100+ to signup someone new.
Low turnover rate: Once locked into a contract, it has to be cancelled in writing whereas I’m sure tons of people forget and just let their credit card get billed $20 a month until infinity. It’s only $20, I’ll send that letter next week.
This strategy can work when executed properly, but most of the time gyms fail at the most important step.
Let me bring in another example.
Have you ever been convinced to take one of those tours where they try and sell you a timeshare? If you haven’t it goes like this: they offer you something fantastic (usually some kind of show tickets) and in exchange you go through their sales process. The whole thing is designed to get you to say, “YES! LET ME BUY THIS SHIT NOW.”
Their sales funnel ends at the end of the tour. That’s when they have to close. It’s limited to that time period because as soon as you leave that place with those show tickets in your hand, it’s over. You’re not coming back for the free breakfast again no matter how good it was.
So with most gyms, they treat the end of the funnel when you signup. Lock someone down for the contract and they only need to get 1,000 more this month to be profitable. But this couldn’t be more wrong.
Are you starting to see the picture yet?
Whenever someone signs up for a membership, they’re still very much a prospect. A gym can offer many more things like personal training, nutrition coaching or group classes. So when the prospect buys-in to the cheap membership, they should be thinking UPSELL, UPSELL, UPSELL.
How do you move that prospect from being a casual gym goer to someone who signs up for personal training or extra classes? What can you do to move them down the funnel? Planet Fitness’ entire marketing campaign is about beating down the stigma of intimidation found at gyms. The intimidation to signup for personal training or group classes is much higher especially when you’re more out of shape than the you’d like to admit or have no idea what you’re doing!
So how do you move the prospect paying $20 a month for just a membership to $75 a session for personal training? It starts with understanding what they want, what they need and how you can deliver that value. All of our lives and schedules are so incredibly different, but we want to share, we want to discuss and we want to belong. If a gym could instill that team building element into their customer development, the results could be huge.
The truth is that it doesn’t matter what kind of business you’re in. Once your prospect buys in to what you have to say, it’s up to you to understand what their problems are and how you can help solve them. Focusing on the people who have already bought-in will make your business more profitable than solely putting all of your efforts into customer acquisition.
Instead of increasing the number of sales, focus on increasing the value of that sale. This starts by listening and being personal. And that’s where most gyms fail.
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